Lloyds finance chief urges Healey to keep bank tax rise temporary
William Chalmers says banks need a predictable tax regime after the chancellor linked a higher surcharge to household energy support.
Lloyds Banking Group finance chief William Chalmers urged the UK government on Thursday, 29 October, not to extend a planned bank tax increase beyond March 2028, arguing that lenders need a predictable tax regime to finance growth. His response came after Chancellor John Healey linked the increase to household energy bill support in his 28 October Budget, The Guardian reported.
Healey plans to raise the bank surcharge, which is charged on top of corporation tax, from 3% to 6% in January for 15 months. He described the increase as time limited and said it would pay for immediate help with energy bills. Chalmers’s warning concerns whether the higher rate will end on that timetable; the tax increase has not yet taken effect.
Why Chalmers opposed a longer bank surcharge
Chalmers told journalists on a Lloyds earnings call that he hoped the increase would remain temporary so the business environment would support long-term investment, according to The Guardian. He said banks must be able to serve businesses, households and communities cost-effectively while remaining internationally competitive. His argument was about the sector’s capacity to lend; it did not establish that the planned surcharge has already changed lending.
He also said Lloyds had paid about £1.8bn in corporate taxes so far this year and stressed the importance of a stable, predictable tax regime. Lloyds reported third-quarter pre-tax profit of £2.3bn, up from £1.2bn a year earlier, according to The Guardian. The comparison gives context to the bank’s response to a tax on profits, though the earlier period included an £800m motor finance compensation provision.
How the Budget links bank tax to energy payments
BBC News reported that the Budget provides a one-off £100 Household Energy Payment from January for homes in council tax bands A to D in England, funded by extra tax on banks. The payment is to go directly into eligible households’ bank accounts. The government’s stated purpose for the surcharge is therefore immediate bill support, while Chalmers’s concern is the effect of keeping the higher rate beyond its announced end date.
The executive’s comments follow the Budget measures announced in the Commons on 28 October. NewsJaws previously covered Healey’s energy bill help and bank tax announcement; Chalmers’s response adds a lender’s objection to the duration of the surcharge. The Guardian had reported before the Budget that a higher bank surcharge was under discussion, but the announced increase was to 6%, rather than the 8% rate industry figures then considered possible.
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Sources and context
- Lloyds executive criticises Healey for linking bank tax rises to energy bill supportThe Guardian
- Your pay, energy bills and cash Isa: How the Budget affects youBBC News
- Budget 2026: Key points announced by Chancellor John HealeyThe Standard
- John Healey poised to raise taxes on banks in budgetThe Guardian
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.