Lloyds Banking Group Chief Financial Officer William Chalmers urged the UK government to keep a planned bank surcharge increase temporary, as the levy is intended to help pay for household energy support.
The Guardian and The Independent reported that Chalmers questioned linking energy prices with higher taxes on banks after Lloyds’ Oct. 29 results briefing. The Independent quoted him as saying, “I don’t see an obvious linkage between energy prices and bank taxes.” Both outlets reported that he argued banks need to lend to support UK growth and remain internationally competitive.
The Oct. 28 Budget sets the Bank Corporation Tax Surcharge to rise from 3% to 6% for 15 months, starting Jan. 1, 2027. The increase is scheduled to end March 31, 2028, with the rate returning to 3% on April 1. The Treasury estimates the temporary rise will raise £1.5 billion to help fund household and business support.
The energy package includes a £100 payment from January 2027 for eligible households in Council Tax bands A to D in England. The government says up to 20 million households will qualify, and devolved governments will receive funding for similar support. The Budget also extends a temporary 0% VAT rate on qualifying domestic electricity supplies in Great Britain until July 2027; the government estimates that will reduce the annual Ofgem price cap by about £50 in April 2027.
Households eligible for the payment are direct beneficiaries, while banks will pay the higher surcharge during its scheduled term. Lloyds reported £495.5 billion in underlying loans and advances to customers at Sept. 30, up 3% from Dec. 31, 2025.
Chancellor John Healey said the increase is intended to fund immediate energy-bill support. The government linked the relief to higher energy costs it attributed to the conflict in the Middle East. It plans to include the surcharge change in Finance Bill 2026-27.
