John Healey has summoned the bosses of Britain’s biggest banks to a pre-budget meeting amid intense industry fears of an imminent tax raid.
Sky News reported that chief executives from Barclays, HSBC, Lloyds Banking Group (LLOY), and NatWest Group have been asked to attend a meeting with the chancellor next Tuesday.
The bosses of Santander UK and Nationwide are also understood to have been invited to the gathering.
It will be the first in-person meeting Healey has held with UK bank chiefs since he replaced Rachel Reeves as chancellor in July.
The summit comes ahead of his inaugural major fiscal event, expected towards the end of October, which has sparked significant anxiety across the banking sector.
In his speech to the Labour Party conference in Liverpool this week, Healey pledged to work “in partnership with business and the unions.”
Despite that pledge, growing fears persist in the banking industry that Healey will hike taxes on the sector by billions of pounds a year to fund spending commitments or tax cuts elsewhere.
Sector chiefs have embarked on a frenetic lobbying campaign to head off a tax raid, arguing it will inhibit banks’ ability to finance growing companies and undermine Britain’s international competitiveness.
Growing economic and geopolitical headwinds have also sparked suggestions that the Treasury will accept a smaller fiscal buffer to facilitate lower tax rises in the budget.
Earlier this week, Sky News revealed that Revolut, Britain’s most valuable fintech, was among a pack of challenger banks urging the chancellor to remove the threat of an immediate tax raid on the sector.
A dozen of Britain’s mid-tier lenders signed a letter to Healey calling on him to lift the threshold at which the corporation tax surcharge applied to banks kicks in from £100m to £500m.
The signatories of that letter included Monzo, Paragon Bank, and Shawbrook, reflecting broad concern across the challenger bank sector.
In their letter, the challengers said “any increase in the rate of the surcharge would have a significantly negative and disproportionate impact on mid-tier and specialist banks and harm investor sentiment in our sector.”
UK Finance, the trade association, has also written to Healey to warn that imposing further tax rises on the banking sector would risk “damaging the UK’s international competitiveness.”
Although Healey has not yet met the bosses of the UK’s biggest banks, he has held face-to-face talks with Jamie Dimon, the chairman and chief executive of JPMorgan Chase.
Dimon has raised the prospect of cancelling a major new UK headquarters if international banks are hit with higher UK taxes, adding high-profile pressure to the lobbying effort.
Unions, meanwhile, have been calling on the chancellor to raise billions of pounds from the industry amid a period of bumper profits for the UK’s biggest banks.
Britain has retained a number of bank-specific taxes, including the bank levy and surcharge, since the aftermath of the 2008 financial crisis, which the sector has argued makes the country less competitive than rival financial centres.
Unlike other countries, the UK also retains a ring-fencing regime separating retail and investment banks, which imposes significant costs on the big five lenders.
Under Healey’s predecessor Reeves, the Treasury began to reform ring-fencing rules, though the new chancellor has yet to express a view on whether that overhaul will proceed.
