Bank shares lose £18bn after Healey summons bosses to pre-Budget summit
More than £18bn was wiped off Britain's four biggest listed banks on Thursday after John Healey summoned bank chiefs to a pre-Budget summit, fuelling fears of a tax raid on the sector.
Chancellor John Healey has summoned the chief executives of Britain’s biggest banks to a pre-Budget summit next Tuesday, the first such in-person meeting since he replaced Rachel Reeves as chancellor in July — and the prospect of a tax raid on the sector wiped more than £18bn off the value of the four biggest listed banks on Thursday.
Barclays, HSBC, Lloyds Banking Group and NatWest Group have all been asked to attend the meeting with Healey, with Santander UK and Nationwide also understood to have been invited, Sky News reported. The summit comes ahead of Healey’s first Budget on October 28, with the banking industry fearing he will hike taxes on the sector by billions of pounds a year to fund spending commitments.
The sell-off began in early trading as investors fretted over surging government bond yields — 30-year gilt yields hit their highest since 1998 — and accelerated in the afternoon once the summit emerged, according to The Times. Barclays closed down 4.1 per cent, HSBC fell 4.1 per cent, Lloyds lost 4.5 per cent and NatWest finished 5.4 per cent lower, with more than £10bn knocked off HSBC alone, leaving it worth about £246bn. The FTSE 350 banks index fell 4.1 per cent, its largest one-day drop since May, Reuters reported. The Treasury declined to comment.
Banks already lobby against higher taxes, arguing the bank-specific corporation tax surcharge and balance-sheet levy make London uncompetitive — UK Finance calculates a total tax rate of 46.5 per cent on a model London bank versus 39.1 per cent in Frankfurt and 27.9 per cent in New York. But the TUC and the campaign group Positive Money have both said a windfall tax should be imposed to help households with the cost of living. Separately, a dozen challenger banks including Revolut, Monzo, Paragon Bank and Shawbrook wrote to Healey urging him to lift the corporation-tax surcharge threshold from £100m to £500m, and Jamie Dimon of JPMorgan Chase has raised the prospect of cancelling a major new UK headquarters if international banks face higher taxes.
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