Barclays Profits Soar, TUC Calls for Higher Bank Tax

Barclays has reported a substantial increase in its financial performance for the first half of the year, with profits reaching £6.1bn. This represents a 17% rise compared to the same period last year, according to corporate filings released on Tuesday. The bank also announced a significant boost to its bonus pool for staff, which increased by nearly 30% to £1.3bn. This figure encompasses both annual and deferred bonuses and is up from £1bn in the previous year.

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Alongside the increased profits and bonus allocation, Barclays revealed plans for substantial shareholder returns. These include a £1bn share buy-back programme and £800m designated for dividends. The strong financial results have intensified calls from the Trades Union Congress (TUC) for increased taxation on the banking sector. The TUC argues that banks like Barclays are benefiting significantly from high interest rates, while households and businesses face economic pressures.

Paul Nowak, the TUC's general secretary, stated that the bank's performance demonstrates its capacity to contribute more financially. He urged the government to raise the bank surcharge, suggesting the additional revenue could be used to help reduce energy bills for consumers. Mr Nowak indicated that this action would signal the government's priorities regarding support for the public.

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In response to these calls, Barclays executives highlighted the current tax burden on UK banks. The bank's chief financial officer, Anna Cross, stated that when employment taxes and VAT are included, UK banks face a tax rate of 46.4%. This, she noted, is higher than rates in other financial centres like Frankfurt (38.9%) and New York (27.9%). Ms Cross described the increase in the bonus pool as a mechanistic reflection of higher revenues and returns, with final compensation decisions not made until year-end.

CS Venkatakrishnan, Barclays' chief executive, mentioned meeting with the new chancellor, John Healey, and expressed satisfaction with his commitment to economic growth and business success. Mr Venkatakrishnan emphasised the role of banks in lending to the economy, stating that for every pound of capital retained, banks lend between £8 and £10. He suggested that any constraints on bank finances could impact the availability of credit for investment and growth.