By Salma El-Sakka
Lloyds Banking Group chief financial officer William Chalmers has criticized Chancellor John Healey for linking an increase in the bank surcharge to energy bill support for households, warning the government against extending the higher levy beyond its planned 15-month limit.
Tax increase questioned
Healey announced this week that the bank surcharge, levied on top of corporation tax, would double to 6% from January for 15 months to fund immediate energy bill relief. Chalmers said there is no obvious linkage between energy prices and bank taxes, and argued that the sector’s ability to lend into the real economy is the best defense against energy price impacts.
The CFO added that Lloyds hopes the tax rise is temporary and that a stable, predictable tax regime is essential for long-term investment. Industry lobbyists have privately expressed concern that a future energy crisis could lead to an extension, citing Spain where a two-year windfall tax on banks was extended by three years and increased.
Profits rise despite motor finance costs
Lloyds reported third-quarter pre-tax profits of £2.3bn, nearly double the £1.2bn recorded a year earlier. The increase largely reflected an £800m charge taken in 2025 for motor finance compensation. Net interest income rose 10%, supported by higher interest rates driven by inflation expectations linked to Middle East fuel prices.
Chalmers noted the bank paid around £1.8bn in corporate taxes year to date and stressed the importance of a stable tax environment for the sector’s international competitiveness.
