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- Source says Bank of England Governor Andrew Bailey will also be there
Banking bosses will be summoned to a meeting with the Chancellor this week amid speculation that Labour may be considering a one-off tax on the sector.
Chief executives of some of Britain’s biggest lenders are expected to attend a summit with Rachel Reeves in Downing Street on Thursday, The Mail on Sunday has been told.
The exact details of the meeting and the names of attendees were still unclear last night, but one source said Bank of England Governor Andrew Bailey would also be there.
Meeting time: Bank of England Governor Andrew Bailey is expected to attend the meeting.
The heads of British lenders include Lloyds boss Charlie Nunn, Barclays boss CS Venkatakrishnan, HSBC chief executive Georges Elhedery (who took over last week), NatWest’s Paul Thwaite, Santander’s Mike Regnier and Nationwide’s Debbie Crosbie.
The source said the meeting would likely discuss so-called Basel reforms – rules designed to protect global lenders from collapse and developed after the financial crisis.
The Bank of England will announce its “final” interpretation of these rules on the same day of the meeting.
But business owners should also be anxious about any new tax offensive in the sector.
One industry source said lenders were “very nervous and assuming it was either the Budget or a tax windfall”.
Banks have seen their profits boosted by higher interest rates, and one former senior Whitehall official was recently quoted as saying they would be a possible target, telling the Financial Times: “They have broad shoulders and nobody likes banks.”
The Treasury did not comment on this week’s meeting or answer questions about fiscal plans ahead of the Budget.
Citation: Barclays CEO CS Venkatakrishnan is expected to attend the meeting
But a spokesman said: “We face tough decisions to fix the foundations of our economy and tackle the £22bn hole in the public finances left by the last government.”
Recent research by campaign group Positive Money found that a 35 per cent tax on the £44.3bn of pre-tax profits reported by HSBC, Barclays, Lloyds and NatWest in 2023 would raise £14bn.
Another option could be to increase the 3 percent surcharge on profits that lenders already pay.
During the election campaign there was talk of reducing the amount of interest paid to lenders on money they deposit at the Bank of England.
Figures from the House of Commons Treasury select committee, published earlier this year, showed that NatWest, Barclays, Lloyds and Santander together received more than £9bn in interest on reserves, an increase of 135 per cent on the previous year.
This creates a potentially lucrative target for the Chancellor, although she has previously strongly criticised the idea of attacking the deal, saying before the election that there were “no plans” to do so and that changing the system could pose “dangers”.
And bank experts say any such move would simply result in worse treatment for customers.
However, since the election Reeves has published a spending audit suggesting the public finances were in far worse shape than she had expected – a £22bn-a-year black hole.
And his boss, Keir Starmer, has said next month’s Budget will include “painful” decisions and the heaviest burden will fall on those with “broader shoulders”.
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