I couldn’t quite believe what I was hearing.
asserted
I → believe → what
A Labour Chancellor, with a proud trade union background, was lavishing praise on the banks.
asserted
Chancellor → lavish → banks
We were at the International Monetary Fund (IMF) gathering in Bangkok 12 days ago and John Healey seemed to have undergone a Damascene conversion to free-market capitalism and the importance of good finance to the UK’s well-being.
asserted
Healey → seem → being
He described our High Street lenders as ‘part of the jewel in the British economic crown’.
asserted
He → describe → crown
He added, for good measure, that they are ‘hardwired into the economic fabric of this country’.
asserted
they → add → country
It seemed impossible that a political operative as experienced as Healey, who served as City minister in Gordon Brown’s Treasury, would speak so glowingly about the banks if he were about to clobber them in tomorrow’s Budget.
asserted
he → seem → Budget
Perhaps the loud campaign against new bank taxes by the world’s most powerful commercial banker, Jamie Dimon of JP Morgan, and the sotto voce lobbying by our more measured British bank bosses had cut through.
asserted
campaign → cut → bosses
Soon after Healey’s remarks, the Treasury was briefing that, despite the splendid rhetoric, the Government had to raise money from somewhere – and the banks were a target.
asserted
banks → brief → money
A government that has brought businesses of all descriptions – particularly in hospitality and farming – to their knees by imposing £75billion of taxes since being elected in July 2024 still has no understanding of the damage that slapping on levies can do.
asserted
slapping → bring → levies
The clear advice from the IMF to axe social spending rather than raise more business taxes looks to have fallen on deaf ears.
asserted
advice → axe → ears
And to raise them from banks right now is folly in the extreme.
asserted
raise → raise → extreme
Prime Minister Andy Burnham meeting with Chancellor of the Exchequer John Healey at No11 Downing Street ahead of the Budget on Wednesday
The banks, for all their faults, drive the economy.
asserted
banks → meet → economy
Tax them more heavily and you punish every corporation, every small and medium-sized enterprise in the country, writes Alex Brummer
The banks, for all their faults, drive the economy.
asserted
banks → tax → economy
Tax them more heavily and you punish every corporation, every small and medium-sized enterprise in the country.
asserted
you → tax → country
You punish ordinary folk, too, because bank taxes will make it harder and more expensive, as Shadow Chancellor Andrew
Griffith argues, to get a mortgage or personal loan.
asserted
Griffith → punish → mortgage
More seriously, though, mauling the banks discourages lending for innovative industries such as artificial intelligence, technology and data centres, which the country needs if a growth agenda is to have any chance of working.
The employers’ group the Confederation of British Industry warns higher bank taxes would be an ‘own goal’ for the economy.
asserted
taxes → maul → economy
And the Bank of England is fearful that any such tax will blow up global investor confidence in British banks, whose stock market valuations are well below many of their foreign counterparts.
asserted
valuations → blow → counterparts
Indeed, that falling investor confidence is already evident.
asserted
confidence → fall → ?
Bank shares dropped sharply in the latest trading and short-sellers – the investors who make money from falling markets – have raised their bets on future declines in bank shares by a staggering 60 per cent.
asserted
who → drop → cent
The importance of banks to a fully functioning economy cannot be overstated, even if there is no love lost between the British public and our biggest lenders.
asserted
importance → function → public
It is easy to see why Labour has chosen to punish banks.
asserted
Labour → see → banks
Customers have never forgiven them for the meltdown of the financial crisis of 2008, when the Treasury and Bank of England issued guarantees for bank debt and liquidity schemes of £1trillion to save us from a national bankruptcy that would have placed all bank deposits at risk.
asserted
that → forgive → risk
The banks were saved, but ballooning government borrowing, which began with that crisis, ushered in a period of austerity, crushed living standards and caused stagnation.
asserted
which → save → stagnation
Since then, the big High Street lenders HSBC, Lloyds, NatWest, Barclays and Santander have done little to win our favour.
asserted
lenders → do → favour
There have been about 7,000 branch closures in the past decade in a trend that has infuriated local firms and the elderly, who need banking services nearby, while delivering a severe blow to already desolate high streets.
asserted
who → infuriate → streets
Just as exasperating is the banks’ obsession with driving us all online.
asserted
obsession → drive → us
In an age of the internet and AI this might seem obvious.
uncertain
this → seem → internet
Yet the moment a customer wants to do something more complex than pay a utility bill they are sucked into a maddening, labyrinthine cyber-journey.
asserted
they → want → journey
It is small wonder that many young people avoid traditional banks and have signed up to the array of online banks, including Revolut, Monzo and Starling.
asserted
people → avoid → Revolut
But none of these neophyte lenders have either the experience, knowledge, deposit or capital base yet to provide full banking services for commerce.
asserted
none → have → commerce
Labour is also happy to hammer banks with higher taxes because they see them as profiteering giants – the ugly face of capitalism.
asserted
they → hammer → capitalism
This month, the High Street banks jointly are expected to report that they earned £29billion of profits between them for the first half of this year, 20 per cent up on the same period in 2025.
asserted
they → expect → 2025
Earning fat profits may seem easy for the banks.
uncertain
Earning → earn → banks
A chunk of their income comes from the ‘endowment’ effect – the interest which the banks can earn on cash simply sitting in current accounts.
asserted
banks → come → accounts
The big High Street lenders HSBC, Lloyds, NatWest, Barclays and Santander have done little to win our favour since the 2008 financial crisis
Another source of profits is the gap or margin that banks earn by paying depositors low rates and charging borrowers higher rates.
asserted
banks → do → rates
But the fact is that accumulating profits in the good times is critical for British banks.
asserted
accumulating → accumulate → banks
They are required by their regulator, the Bank of England, to hold large amounts of capital to absorb the losses on loans that go wrong.
asserted
that → require → loans
Insolvencies happen every day.
asserted
Insolvencies → happen → ?
When a firm such as fancy department store Harvey Nichols or telecoms provider TalkTalk goes bust the banks take the loss.
asserted
banks → go → loss
We all see that local businesses, whether they be pubs, garages, builder’s yards or corner shops, can get into trouble overnight.
asserted
they → see → trouble
…and 10 more, not listed.
The Aporia
