Home · Politics · Sep 12 archive
Unions Call for Bank Tax to Cut Energy Bills
Confirmed
In Short: Unions are pushing for a tax on banks to help reduce energy costs for households.
Unions are calling for a tax on banks to help alleviate the burden of rising energy bills, according to the TUC. The leader of Britain's trade unionists, Paul Nowak, has proposed a 'social tariff' funded by a bank surcharge, which he believes could benefit two-thirds of households. Nowak argues that the current tax system is not effective at capturing wealth, suggesting a windfall tax on social media companies and equalizing Capital Gains Tax with income tax.
The proposal has gained support from various parties, including Labour MPs and the Liberal Democrats. However, UK Finance, representing major banks, argues that heavier levies would undermine the government's growth ambitions and damage international competitiveness. Banks currently pay a surcharge of 3% on profits exceeding £100 million, in addition to corporation tax of 25%. The TUC estimates that reversing this surcharge would raise £9 billion over four years.
According to a poll by the TUC, the majority of the public and supporters of all parties want to see a reduction in energy bills by taxing banks. The campaign has also gained support from a range of organizations, including consumer groups, businesses, and sector associations. The letter, coordinated by E3G and Energy UK, highlights that UK energy costs are among the highest in developed nations, with bills rising by 79% since the energy crisis began in 2020.
Energy Live News reports that the TUC will make a 'very clear call' at the TUC congress next week for the government to introduce a social tariff on energy bills, which could save up to £560 a year for two-thirds of households. The increase in energy bills, driven primarily by the cost of gas, has led to household energy debt rising to £7 billion and causing over 40% of British businesses to cut investment. Non-fuel costs, including government levies, also contribute to the rise in energy bills.
Meanwhile, the UK government has offered 'breathing space' by temporarily scrapping VAT on electricity bills from October. However, the TUC argues that a bank surcharge is necessary to provide more substantial relief to low and middle-income earners. The proposal has sparked debate among economists, with Lord O'Neill suggesting that wealth taxes are not the best approach for growth.
What's confirmed
- Unions are calling for a tax on banks to help alleviate the burden of rising energy bills, according to the TUC. The leader of Britain's trade unionists, Paul Nowak, has proposed a 'social tariff' funded by a bank surcharge, which he believes could benefit two-thirds of households. Nowak argues that the current tax system is not effective at capturing wealth, suggesting a windfall tax on social media companies and equalizing Capital Gains Tax with income tax.
- The proposal has gained support from various parties, including Labour MPs and the Liberal Democrats. However, UK Finance, representing major banks, argues that heavier levies would undermine the government's growth ambitions and damage international competitiveness. Banks currently pay a surcharge of 3% on profits exceeding £100 million, in addition to corporation tax of 25%. The TUC estimates that reversing this surcharge would raise £9 billion over four years.
- According to a poll by the TUC, the majority of the public and supporters of all parties want to see a reduction in energy bills by taxing banks. The campaign has also gained support from a range of organizations, including consumer groups, businesses, and sector associations. The letter, coordinated by E3G and Energy UK, highlights that UK energy costs are among the highest in developed nations, with bills rising by 79% since the energy crisis began in 2020.
- Energy Live News reports that the TUC will make a 'very clear call' at the TUC congress next week for the government to introduce a social tariff on energy bills, which could save up to £560 a year for two-thirds of households. The increase in energy bills, driven primarily by the cost of gas, has led to household energy debt rising to £7 billion and causing over 40% of British businesses to cut investment. Non-fuel costs, including government levies, also contribute to the rise in energy bills.
- Meanwhile, the UK government has offered 'breathing space' by temporarily scrapping VAT on electricity bills from October. However, the TUC argues that a bank surcharge is necessary to provide more substantial relief to low and middle-income earners. The proposal has sparked debate among economists, with Lord O'Neill suggesting that wealth taxes are not the best approach for growth.
What's still developing
- Bank share prices have risen faster here than in New York," he said. The TUC's demands for tax-raising measures don't stop with the banks, with Nowak arguing the UK has "a tax system that's good at taxing income but not good at capturing wealth". Nowak suggests a windfall tax on social media companies and for the government to equalise rates of Capital Gains Tax with income tax. The economist and former minister Lord O'Neill - who has advised Burnham – said recently that wealth taxes were "the last thing that should be happening if we want to see more growth". Nowak responded: "With respect, I think he is wrong.
- "And millions of families up and down the country are worried about turning on their heating this winter." Burnham has already offered "breathing space" - as he calls it – on the cost of living by temporarily scrapping VAT on electricity bills from October.
- © Energy Live News Ltd Cuffley Place Sopers Road EN6 4SG Registered as a business in England & Wales No: 07209102 VAT No: 988 8336 42 All images used are copyrighted by Shutterstock unless stated otherwise.
- The campaign has rapidly gained support beyond the energy sector, demonstrating the range of organisations for which electricity costs are now a key concern. 123 organisations have signed the letter, ranging from consumer groups like Which? and AgeUK, businesses including Nationwide and the Co-op, and associations representing sectors across the entire economy, including the CBI, MakeUK, techUK, the British Beer & Pub Association, British Retail Consortium, National Housing Federation, Food & Drink Federation and UKHospitality.
- The increase is driven primarily by the cost of gas, with unit rates up 28% on the last quarter and 16% higher than a year ago, a direct consequence of the so-called “Trump Tax” and disruption to global energy markets following the US-Israeli conflict with Iran.
- For energy efficient homes, decent incomes and low cost fuel for low income households.