By Fatma Younis
Lloyds Banking Group’s chief financial officer William Chalmers has described the government’s planned increase in the bank corporation tax surcharge as “unhelpful” to achieving UK economic growth, urging ministers to keep the measure temporary.
Budget announces higher bank surcharge
Chancellor John Healey announced on Wednesday that banks will pay an extra 3% on their corporation tax surcharge from January, raising the rate to 6%. The measure is intended to be in place for 15 months and is expected to raise £1.5 billion for the Treasury, partly to fund support for household energy bills.
Lloyds reports near-doubling of quarterly profit
The criticism came as Lloyds reported a pre-tax profit of £2.3 billion for the third quarter of 2026, nearly double the £1.2 billion recorded a year earlier. The previous year’s figure was depressed by an £800 million provision for motor finance compensation costs. Excluding that impact, underlying earnings still strengthened, with net interest income rising 10% year on year.
Chalmers questions link to energy support
Chalmers said he did not see an “obvious linkage between energy prices and bank taxes” and argued that lending to the real economy is the best defence against energy price shocks. He acknowledged the government’s fiscal constraints but stressed that reducing the cost of lending is essential for growth and competitiveness.
