Burnham faces City backlash over £60bn bank tax plan

TUC General Secretary Paul Nowak

Andy Burnham has been warned he risks driving banks, investment and high-paid jobs out of London as pressure mounts over proposals for a multibillion-pound windfall tax on the financial sector.

Business leaders say the plans, championed by the Trades Union Congress (TUC), could undermine the UK's competitiveness just as the incoming Prime Minister prepares to unveil a sweeping overhaul of the economy.

City Sounds the Alarm

The TUC has urged Burnham to raise between £9 billion and £60 billion over four years by increasing the bank surcharge, arguing the money should help tackle inequality and ease pressure on struggling households.

But UK Finance, which represents more than 300 firms across the banking and financial services sector, warned that such tax rises would encourage capital, investment and jobs to move overseas. It said UK banks already face a heavier tax burden than many international competitors through existing levies and surcharges.

Unions Demand Bigger Contribution

TUC General Secretary Paul Nowak argued the sector can afford to pay more, pointing to strong bank profits and record bonus pay-outs in the City of London.

The union has outlined three options, ranging from restoring the bank surcharge to 8%, raising an estimated £9 billion, to increasing it to 35%—matching the windfall tax previously imposed on energy companies—which it says could generate up to £60 billion over four years.

Economic Reset Meets Market Jitters

The proposals come as Burnham sets out an ambitious programme to rebalance Britain's economy through greater regional investment and the biggest transfer of powers from Whitehall in decades.

His blueprint includes moving thousands of civil service jobs out of London, creating a "No10 North" in Manchester and expanding the powers of regional mayors. London Mayor Sir Sadiq Khan has already warned against reducing investment in the capital.

Pressure Builds Before Power Transfer

Burnham has insisted his plans will be delivered within existing fiscal rules, promising sound public finances despite the scale of his reform agenda.

Business groups remain cautious. While welcoming his focus on economic growth, they have warned that aggressive taxation and increased state intervention could deter investment at a critical moment. With Burnham expected to enter Downing Street this July, the battle over how to fund his programme is already intensifying.

Burnham warned of London bankers exodus if he hits City with £60bn tax