Reform UK’s Treasury spokesman Robert Jenrick has declined to rule out a tax on profitable banks, despite the party hosting City industry representatives at its first-ever Business Day conference event.
Jenrick told attendees that Reform had not committed to any banking tax, but warned investors to “watch this space” when pressed on whether the party opposed such a levy.
“We haven’t set out any plans to increase taxes on banks,” Jenrick said, while stopping short of a firm rejection of any future policy in that direction.
The remarks follow comments made by Reform leader Nigel Farage in Davos earlier this year, when he vowed to tax banks because of his personal de-banking experience with Natwest private bank Coutts.
“We are going to do it. Some of the banks won’t like it. Well, I don’t like the banks very much,” Farage said in an interview with Bloomberg at the time.
Farage framed the policy not as a conventional tax but as an end to what he called free money, saying “they are just not going to get free money anymore” and that “business always does” adjust.
Jenrick clarified that Farage’s primary concern centres on the Bank of England’s reserve interest payments to commercial lenders, rather than a straightforward tax on bank profits.
He said there was “merit” to ending those reserve payments, a policy Reform included in its 2024 manifesto, which the party claimed would save taxpayers £40bn.
The Bank pays interest on reserves created during the quantitative easing process, though central bank chiefs are now unwinding their holdings through a bond sell-off programme.
Richard Tice, Reform’s deputy leader, has been a vocal critic of the Bank’s quantitative tightening programme, a position he shares with Labour’s Louise Haigh, the chancellor of the Duchy of Lancaster.
Jenrick also predicted that Chancellor John Healey would target banks at the upcoming Budget, describing the sector’s huge profits as “low hanging fruit” and saying he “100 per cent” believed a raid was coming.
Banking tax speculation is intensifying ahead of the Budget as Healey’s £22.7bn headroom looks set to be reduced significantly due to the Iran war, putting further pressure on the government to find new revenue sources.
Former Chancellor Rachel Reeves declined to hike taxes on banks across her two budgets, despite raising overall government revenue by around £65bn, even though banks already pay a levy on top of corporation tax.
Jenrick announced he had written to top banks outlining Reform’s plans for £80bn in spending cuts, primarily through welfare reform, and pledged to hold a budget within the first 100 days of entering government.
On the Bank of England, Jenrick said he would maintain its independence but suggested the Monetary Policy Committee could benefit from private sector appointments alongside its existing academic economists.
“I think the MPC could have a broader range of views within it, including different perspectives on economics, but also on the economy,” Jenrick said, adding that practical business experience would be “useful to inject into the mix.”