Andy Burnham has been urged to launch a tax raid on UK banks, as Barclays revealed a 30% increase in its half-year bonus pool after a rise in profits. Fresh corporate filings released on Tuesday showed the bank put £1.3bn towards its bonus pool for the first half of the year, up from £1bn last year. The bonus pot will continue to accumulate through the second half and could lead to more generous payouts for high-performing bankers when final pay decisions are made by end of February next year.
Profits surge and shareholder payouts
Barclays' pre-tax profits for the second quarter rose to £3.3bn, up 31% year-on-year, bringing half-year profits to £6.1bn, a 17% increase. The bank also announced new payouts for shareholders, including a £1bn share buyback and £800m in dividends.
TUC calls for higher bank taxes
The strong results emboldened calls for a tax raid on UK lenders. TUC general secretary Paul Nowak said: “Big banks like Barclays are raking it in while working people and local businesses are struggling. High interest rates have been a boon for banks but have meant mortgage misery and higher bills for the rest of us. This is not a ‘hard choice’. Barclays’ bonanza profits show that banks can easily afford to pay more tax. This is a chance for the new prime minister and chancellor to show whose side they’re on. It’s time to increase the bank surcharge and tax banks to bring down energy bills.”
Barclays defends tax and bonus levels
Barclays executives stressed they are taxed much higher than foreign peers, citing UK Finance data showing UK banks taxed at 46.4% versus 38.9% in Frankfurt and 27.9% in New York. CFO Anna Cross said the bonus pool increase was “purely mechanistic” and that higher revenues and returns automatically increase the accrual. CEO CS Venkatakrishnan met new chancellor John Healey and welcomed his commitment to growth, but noted that bank loans are crucial: “For every pound of capital retained in the banking system, we lend £8 to £10 into the economy.”
