Farage: ‘Loathsome’ banks should not be hit with new tax

Nigel Farage has said that banks should not be hit with new taxes at this week’s Budget in a partial U-turn on his previous position. Earlier this year, the Reform UK leader vowed to scrap interest payments lenders receive on deposits at the Bank of England, a move that would be widely regarded as a banking tax. Asked by City AM on whether he would support reported plans by Chancellor John Healey to increase taxes on banks, Farage said that lenders already faced a larger burden in the UK than in other countries and that he did not want banks to leave Britain, even though believed the sector’s practices were “loathsome”.

“I hate the banks,” he said in a press conference on Monday. “The fact is that they are already taxed at about 46.5 per cent, which is the highest out of any other competitor nation. “You might as chancellor be able to squeeze a bit more out of them. But you have got to be jolly careful.” ‘I do not want a tax rate that makes banks leave London’ Farage accused lenders of failing to pass on gains from higher interest rates to customers and said that de-banking was “still very painful for individuals and businesses”.

However, he said he would “put that aside” as he called for Healey to spare lenders. “I do not want a tax rate that makes the banks leave London. That will make all of us poorer,” he said. Farage has been at odds with banks for years, with Natwest’s private bank Coutts de-banking the former Ukip and Brexit Party leader over a claim he failed to meet eligibility criteria of holding at least £1m in his account. It was later found in a report that he was prevented from accessing his account due to his political involvement, leading to the resignation of Natwest chief executive Dame Alison Rose.

Reform UK’s deputy leader Richard Tice has also long been a critic of the Bank of England’s interest payments to commercial lenders as costs are directly incurred by taxpayers. Governor Andrew Bailey said a removal of payments could undermine financial stability and cost taxpayers through extra borrowing costs. At Reform’s party conference in September, Jenrick said there were no party plans to increase taxes on banks although he admitted Farage was concerned about the profits that lenders made from the Banks’ interest payments.

Farage’s speech on Monday was designed to present an alternative Budget to Healey’s on Wednesday. A list of 64 policy proposals included approving oil drilling at Rosebank, abolishing the energy profits levy, repealing the renters’ rights act, reviewing capital requirements on banks and re-legalising the use of Imperial units. Some City figures welcomed the plans. Peel Hunt’s deputy research chief Kallum Pickering said some of the reforms would lead to a “much greater improvement in growth and fiscal balances”.