Robert Jenrick, Reform UK‘s Treasury spokesman, declined to rule out a Reform UK bank tax at the party’s first-ever Business Day, telling City executives and investors to ‘watch this space’ on policy towards profitable lenders. The event was organised by City industry representatives and marked Reform’s attempt to open a serious dialogue with the financial sector.
‘We haven’t set out any plans to increase taxes on banks,’ Jenrick said. But when pressed on whether the party actively opposed such a levy, he would not say it did, leaving the door open to a future announcement.
Farage’s position and the Reform UK bank tax question
The backdrop to Jenrick’s careful wording is Nigel Farage’s rather less diplomatic stance. Speaking in Davos earlier this year, Farage said he would target banks following his own de-banking from Coutts. ‘We are going to do it. Some of the banks won’t like it. Well, I don’t like the banks very much,’ he told Bloomberg. ‘This will be tough for banks to accept, but I am sorry, the drain on public finances is just too great. It’s not a tax. They are just not going to get free money anymore. They’ll adjust; business always does.’
A Reform source sought to soften that, saying the party does not back bank taxes and is still preparing policy. Jenrick’s own formulation at the Business Day was equally hedged: no commitment either way, but a clear signal that financial services policy is in active development.
Where Jenrick was more precise was on Farage’s real preoccupation: the Bank of England‘s practice of paying interest on the commercial reserves it created during quantitative easing. Jenrick said there was ‘merit’ in considering an end to those payments. Reform’s 2024 manifesto included a proposal to stop the Bank paying interest on reserves, which it said would save taxpayers £40bn.
The cost of unwinding that quantitative easing is now coming into sharper focus. The Institute for Public Policy Research calculated that quantitative tightening is costing the Treasury £22bn a year, according to The Guardian. That figure gives some weight to Reform’s argument that the current arrangement is a drain on public finances, even if the party’s proposed remedy remains undefined.
Richard Tice, Reform’s deputy leader, has been a consistent critic of the Bank’s quantitative tightening programme, alongside Labour’s Louise Haigh, the chancellor of the Duchy of Lancaster. The Bank is currently unwinding its bond holdings through a sell-off of gilts, and the cost to the Exchequer of paying interest on the reserves created during the original buying programme has become a live political issue across parties.
MPC reform and spending plans
Beyond the bank levy question, Jenrick set out a number of positions on economic governance. He confirmed he would maintain both the Office for Budget Responsibility and the Bank of England’s independence, but said he would consider reforms to the Bank’s relationship with the Treasury. He singled out the composition of the Monetary Policy Committee as one area for review, suggesting it could benefit from appointments with private-sector backgrounds rather than purely academic economists.
‘I think the MPC could have a broader range of views within it, including different perspectives on economics, but also on the economy,’ Jenrick said. ‘People perhaps with more experience of the real economy. I think having people with perhaps some more practical experience of the economy would be useful to inject into the mix.’
On spending, Jenrick said he had written to the UK’s top banks to share Reform’s plans for £80bn in spending cuts, primarily through welfare reform, and committed to holding a budget within the first 100 days of a Reform government. The party also signalled that further policy announcements on financial services could include cutting regulatory red tape for lenders.
The broader context for all of this is the political pressure now building around bank taxation. Banking tax speculation has intensified ahead of this year’s Budget, with Chancellor John Healey’s £22.7bn headroom expected to narrow sharply. Jenrick said he was ‘100 per cent’ certain Healey would target banks, describing the sector’s profits as ‘low hanging fruit’. Former Chancellor Rachel Reeves declined to impose additional levies on banks during her two budgets, despite banks already paying a surcharge on top of corporation tax and despite raising about £65bn in additional government revenue across those budgets.
The meeting between Reform and the financial establishment was not limited to the Business Day event. A Bank of England spokesperson confirmed that ‘the governor had a productive meeting with Reform UK on Thursday as part of the Bank’s engagement with political representatives.’
