Bank executive warns that singling out lenders for additional levies undermines growth, as Labour leadership speculation fuels industry anxiety over further tax rises
Santander executive chair Ana Botín (pictured top) has publicly criticised the UK's bank tax regime, arguing that it penalises lenders unfairly and runs counter to the government's stated growth objectives.
Speaking to the Financial Times, Botín said that if growth was the priority, "taxing banks more heavily than other companies makes no economic sense."
Banks operating in the UK are subject to a balance sheet levy and a surcharge on profits introduced following the 2008 financial crisis, on top of standard corporation tax.
"The question is, why single out the banks in particular and impose additional taxes?" the bank executive pointed out. "We already pay a corporate tax rate of around 30%, our profit margins are nowhere near those of monopolistic players, and we're not reaping windfall profits. If policymakers are looking for sectors earning outsized returns, there are other places to start."
She also noted that bank lending to businesses "drives investment and job creation."
Botín's remarks come amid growing industry concern that lenders could face a more punitive tax environment if Prime Minister Sir Keir Starmer is replaced by a more left-leaning leader. Greater Manchester mayor Andy Burnham, currently contesting a parliamentary by-election in Makerfield, is widely regarded as the frontrunner to succeed Starmer. Former deputy prime minister Angela Rayner, seen as a Burnham ally, proposed increasing the bank surcharge last year.
Lenders narrowly avoided tax increases in last November's budget after chancellor Rachel Reeves sought assurances that banks would expand UK lending and publicly back her fiscal strategy.
Botín is not alone in her criticism. JPMorgan Chase chief executive Jamie Dimon said last month that he would abandon plans to invest £3 billion in a new London headquarters if bank taxes rose further, while Barclays chief CS Venkatakrishnan has similarly cautioned the government against additional levies.
The comments also come shortly after Santander completed its £2.65 billion acquisition of TSB, bringing its UK customer base to approximately 19 million. The deal was Santander's fourth sizeable UK acquisition since 2004, taking total investment in the UK above £20 billion.
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