A little more than three months into taking office, the new Prime Minister, and his Chancellor John Healey, have set the broad contours for the type of economy they want to build, centred on place-based growth, reindustrialisation and greater investment in infrastructure and housing.

Financial services have a central role to play in delivering these ambitions – mobilising investment, financing businesses and infrastructure, supporting home ownership and helping drive growth across every region and nation of the UK. 

Our Autumn Budget submission sets out how the Government can enable the sector to make an even greater contribution, while maintaining the UK’s competitiveness as a global financial centre. 

Need for tax certainty 

A central message is the need for tax stability. Higher bank taxes would work against the Government’s ambition for a growing and internationally competitive financial services sector that can support businesses, jobs and investment across the country. 

UK banks already make a substantial fiscal contribution of more than £43 billion in tax in the last year. Analysis by PwC shows that the total tax rate for a model corporate and investment bank was 46.5% in London in 2026 – the highest of any major financial centre. 

Increasing the Bank Corporation Tax Surcharge or Bank Levy would widen that differential further and weaken the UK’s competitiveness at a time when other centres are seeking to become more attractive places to invest and do business. 

Our separate report with Norton Rose Fulbright, The UK’s future as a global centre for financial services – published alongside our Budget submission – reinforces the importance of a stable and competitive tax environment as international firms decide where to invest, locate activity and deploy capital. 

Building on the Government’s reform agenda 

Tax stability would complement the Government’s wider plans for financial services.

HMT’s Financial Services Growth and Competitiveness Strategy set out an important ten-year reform agenda for the sector and the priority now should be to maintain that momentum: delivering the reforms already underway while ensuring the tax environment supports the sector’s capacity to support the Government’s wider growth ambitions. 

The Financial Services and Markets Bill is an important part of this programme, with reforms to the Financial Ombudsman Service, Senior Managers Regime and Consumer Credit Act, alongside integration of the Payment Systems Regulator into the FCA. 

But there is more to do. In particular, as we set out in our Budget submission, ambitious reform of bank capital requirements – delivering the Bank of England’s Tier 1 benchmark reduction last December – would support greater financing of businesses, infrastructure and the industries of the future. 

Our other proposals include: 

• Connecting capital with investable opportunities across the UK through a new Financial Services Good Growth Council bringing together key stakeholders, while ensuring that financial services is embedded in future infrastructure policy decisions, such as the long-term housing strategy. 
• Backing SMEs by maximising the role of Growth Guarantee Scheme and the Business Growth Service and helping businesses to attract investment and scale through continued capital markets reform.
• Driving innovation and digital commerce through modernised retail payments infrastructure, commercially sustainable Open Banking, and solidifying the UK’s lead in tokenised deposits through the Great British Tokenised Deposits initiative. 

Financial services have two mutually reinforcing roles in the Government’s growth agenda: as a major UK industry supporting jobs around the UK, investment and exports; and as the system through which households, business and national priorities are financed. 

The Autumn Budget is an opportunity to strengthen both. By providing tax certainty and maintaining momentum on reform, the Government can give the sector the confidence and capacity to invest, lend and put more capital to work in support of growth across the UK.