0:00
The banking industry spent the majority
0:02
of 2025 on the defensive, fighting off
0:04
relentless calls for a tax on the
0:06
sector. And now top lenders are set to
0:08
renew those efforts. Growing fears that
0:10
Keir Starmer could be set to depart
0:12
Downing Street as his premiership
0:14
continues to battle against controversy
0:16
after controversy are sending ripples
0:18
through the city. Because if Starmer
0:20
goes, it's all but certain his
0:22
Chancellor, Rachel Reeves, will follow
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suit. Reeves has shot down calls to tax
0:26
the banking sector, opting to spare them
0:28
in last year's autumn budget. Despite
0:30
calls from the opposition benches, think
0:32
tanks, and even Labour Party's former
0:34
Deputy Prime Minister, Angela Rayner.
0:36
And it's Rayner who is tipped to take
0:38
the helm should Starmer head out the
0:40
door. A leaked memo last year revealed
0:42
the left-wing darling had called for
0:43
Reeves to raise taxes on the banks as a
0:46
way to avoid cutting welfare spending.
0:48
Now, should Rayner or another left-wing
0:50
candidate storm onwards to number 10,
0:53
banks fear she will bring with her a
0:54
Chancellor who shares that exact
0:56
philosophy. And it's coming at a time of
0:58
intense scrutiny for the sector. Profits
1:00
are expected to swell this year as
1:02
interest rates stay higher for longer
1:04
because of the inflationary pressures
1:05
caused by the war in the Middle East.
1:07
Banks have quickly reassembled into that
1:09
defensive mode that we saw so much of
1:11
last year. The chief executive of
1:13
Barclays has recently been making the
1:15
case for the outsized tax rate on the
1:17
bank sector. He pointed to the sector's
1:19
average 46% rate in the UK. That's
1:23
compared to Europe's ranging between 29%
1:25
and 40% and the US at around 20% That
1:29
mammoth rate comes from the numerous
1:31
levies slapped on the banking sector in
1:32
the UK, including sector-specific
1:34
charges as well as the usual national
1:36
insurance. In what might be a reminder
1:39
to any challenges to Starmer's
1:40
leadership, the Barclays boss said the
1:42
UK needs growth, the UK needs income,
1:45
and banks like ours play a really,
1:47
really important role in that. And as
1:49
bank results continue, these lobbying
1:51
calls are only expected to pick up. And
1:53
should the volatility in Westminster go
1:55
to the next level, banks may also be
1:57
forced to up their defense. For all the
1:58
latest on the city's top banks and all
2:00
your top economic news, stick with
