Jeremy Hunt accused of 'slipping out' massive tax cut for banks

Britain's Chancellor of the Exchequer Jeremy Hunt gives Autumn Statement at the House of Commons in London, Britain, November 17, 2022. UK Parliament/Jessica Taylor/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. IMAGE MUST NOT BE ALTERED.
Jeremy Hunt has been accused of slipping out tax cuts for banks without mentioning them in his autumn statement. (Reuters) (Handout . / reuters)

Jeremy Hunt has been accused of 'slipping out' a tax cut for banks in his autumn statement that unveiled tax hikes for millions of people.

The chancellor announced a package of around £30bn of spending cuts and £24bn in tax rises over the next five years in what he said was a "balanced plan for stability".

But Labour accused him of "picking the pockets of working people" as Treasury analysis showed his measures would leave 55% of households worse off.

As people pore through the fine print to see the impact of the raft of measures announced, Hunt is now facing criticism for cutting the bank surcharge - a charge on the profits of banks - from 8% to 3% from April next year - but not mentioning it in his statement.

Labour MP Janet Daby questioned the lack of transparency in the Commons.

She said: "Does the chancellor not have a responsibility to set out all major tax cuts - but he seems to have slipped out a tax cut for the banks. Will the chancellor now confirm that he is cutting the bank surcharge from 8% to 3%?'

The move, alongside a cut to the Bank Levy - whose purpose is to ensure that banks and building societies make a fair contribution - means that banks operating in the UK will pay £18bn less in these taxes over the next five years, the Liberal Democrats said.

Read more: ‘Simply staggering’ hit to living standards coming next year, top economist warns

The party called for the government to reverse cuts, instead using the money to support mortgage-payers facing rising bills.

Liberal Democrat leader Ed Davey MP told the Mirror: "After all his U-turns, the one thing Rishi Sunak seems determined to press ahead with is cutting taxes for the big banks.

"He’s got his priorities completely wrong and he is totally out of touch with the British people."

Watch: Chancellor could have made 'fairer choices' around tax, says Rachel Reeves

Shares of Britain’s major banks received a boost after the autumn statement, with Lloyds Banking Group and NatWest shares rising by about 1.5%.

The chancellor defended the move, saying it came alongside increases in corporation tax, which banks pay on top of the surcharge.

The increase from 19% to 25% from April means banks will still be paying a higher rate of tax than they were previously, but by just 1% rather than the 6% they would have faced without cuts to the bank surcharge.

Responding to Daby, Hunt said: "We are reducing the bank's surcharge because we are increasing corporation tax from 19% to 25% so banks are contributing to more money for the NHS and schools in her constituency."