John Healey, the chancellor, has called the chief executives of Britain’s biggest banks to a pre-budget summit scheduled for next Tuesday in London.
Sky News reported that the heads of Barclays (LON: BARC), HSBC (LON: HSBA), Lloyds Banking Group (LON: LLOY), and NatWest Group (LON: NWG) have all been asked to attend the meeting.
The bosses of Santander UK and Nationwide are also understood to have received invitations to the summit, broadening the scope of the gathering significantly.
It will be the first in-person meeting Healey has held with UK bank chiefs since replacing Rachel Reeves as chancellor in July of this year.
The summit comes directly ahead of Healey’s inaugural major fiscal event, expected toward the end of October, raising the stakes for the banking sector considerably.
Speaking at the Labour Party conference in Liverpool this week, Healey pledged to work “in partnership with business and the unions,” signaling an outwardly collaborative approach.
Despite that rhetoric, growing fears persist inside the banking industry that the chancellor will hike taxes on the sector by billions of pounds annually to fund spending commitments or tax cuts elsewhere.
Sector chiefs have launched an aggressive lobbying campaign to prevent a tax raid, arguing that higher levies will limit banks’ ability to finance growing companies and damage Britain’s international competitiveness.
Earlier this week, Sky News revealed that Revolut, Britain’s most valuable fintech, was among a group of challenger banks urging Healey to remove the threat of an immediate tax raid on the sector.
A dozen mid-tier lenders, including Monzo, Paragon Bank, and Shawbrook, signed a letter calling on Healey to raise the corporation tax surcharge threshold applicable to banks from £100 million to £500 million.
The signatories warned in their letter that “any increase in the rate of the surcharge would have a significantly negative and disproportionate impact on mid-tier and specialist banks and harm investor sentiment in our sector.”
Healey has already held face-to-face talks with Jamie Dimon, the chairman and chief executive of JPMorgan Chase, who raised the prospect of cancelling a major new UK headquarters if international banks face higher taxes.
UK Finance, the banking trade association, has separately written to Healey warning that further tax increases on the sector would risk “damaging the UK’s international competitiveness.”
Growing economic and geopolitical headwinds have prompted suggestions that the Treasury may accept a smaller fiscal buffer to facilitate lower overall tax rises in the upcoming budget.
Britain has maintained bank-specific taxes, including the bank levy and surcharge, since the 2008 financial crisis, a regime the sector argues makes the country less competitive against rival global financial centers.
Unlike many other jurisdictions, the UK also retains a ring-fencing regime separating retail and investment banking, which imposes significant additional costs on the country’s five largest lenders.
Under Reeves, the Treasury began reforming ring-fencing rules, though Healey has yet to publicly state whether that overhaul will continue under his leadership.
