Reform UK’s Nigel Farage is urging Chancellor John Healey to hold back from raising levies on lenders, citing fears that Britain could lose financial institutions to rival markets.
The warning marks a notable reversal for the Reform UK leader, who earlier this year pledged to eliminate the interest payments that banks receive on deposits held at the Bank of England.
That proposal had been widely interpreted as a de facto banking tax, making his latest position a striking shift in tone ahead of this week’s Budget.
Farage delivered his remarks at a press conference on Monday, acknowledging his deep personal antipathy toward the sector while simultaneously arguing for its protection from additional fiscal pressure.
He pointed to an existing tax burden of around 46.5 per cent on UK banks, which he described as the highest rate faced by lenders in any competitor nation.
“I hate the banks,” he said. “The fact is that they are already taxed at about 46.5 per cent, which is the highest out of any other competitor nation. You might as chancellor be able to squeeze a bit more out of them. But you have got to be jolly careful.”
The remarks came after City AM asked Farage whether he would back reported government plans to increase taxes on the banking sector as part of the Budget package.
His core concern was that pushing the levy higher could prompt major institutions to relocate away from London, dealing a damaging blow to the UK’s standing as a global financial centre.
“I do not want a tax rate that makes the banks leave London,” he said, framing the argument in terms of national economic interest rather than any sympathy for the industry.
Farage was careful to distinguish his pragmatic position from any softening of his broader critique of banking culture and conduct.
He accused lenders of failing to pass on the benefits of higher interest rates to ordinary customers, and said that de-banking remained “still very painful for individuals and businesses.”
Despite those grievances, he indicated he was willing to set his criticisms aside when it came to the specific question of Budget taxation, prioritising competitive risk over his longstanding hostility to the sector.
The episode illustrates the tension at the heart of Reform UK’s economic positioning, which blends populist anger at financial institutions with a broadly pro-business, low-tax outlook.
Healey has not yet confirmed the precise shape of any bank-related measures in the Budget, but speculation over a potential increase in the banking surcharge has drawn scrutiny from across the political spectrum.