The Green Party of England and Wales has proposed a 38 percent windfall tax on the profits of Britain’s biggest banks, with the proceeds used to cut taxes for small and medium-sized businesses.
The tax would apply to UK banking profits above £800 million. Based on calculations by the campaign group Positive Money, it could raise around £19 billion a year.
Green leader Zack Polanski said the money would be used to double the Employment Allowance, cutting as much as £10,500 from employers’ National Insurance bills for more than a million smaller companies.
“The large banks are cashing in on the backs of the small businesses who are the real innovators and creators, and profiteering from chaos and misery while ordinary people struggle,” he said.
Britain’s banks have certainly been making enormous profits. Higher interest rates have allowed them to charge borrowers more, while the Bank of England has also paid billions in interest on the reserves commercial banks hold with it. Mortgage holders, indebted workers and struggling businesses pay the price, while bank shareholders collect the proceeds.
This isn’t some unfortunate abuse of an otherwise sound system. Finance capital makes its money by placing the rest of society under tribute. Interest payments give the financial oligarchy a claim on the future income of workers, households and businesses. The banks don’t need to produce anything useful themselves. Their ownership of money and credit allows them to appropriate part of the value produced elsewhere.
UK Finance, the banking industry’s trade body, has previously objected to proposals for a windfall tax on the grounds that banks already pay a corporation tax surcharge and a bank levy. The bankers’ position is always the same: their profits are private property, even when those profits depend on state policy, public guarantees and an economic system constructed around their interests.
The Greens’ proposal recognises one real conflict within capitalism. Smaller firms are routinely squeezed by banks, commercial landlords, energy monopolies, wholesalers and giant corporations with far greater access to credit and political power. As capital becomes more concentrated, many small proprietors find themselves increasingly dependent on the monopolies above them and under constant pressure from debt.
But this conflict between big and small capital isn’t the same as the conflict between capital and labour. Polanski’s claim that small businesses are the “real innovators and creators” obscures the source of profit. Workers create value, whether they’re employed by a multinational bank, a factory or a local shop. A business doesn’t stop exploiting wage labour simply because its owner has fewer employees or a smaller balance sheet.
The proposed tax would redistribute some wealth from finance capital towards smaller employers. It could keep some firms afloat and slow the destruction of small businesses by monopolies. But reducing employers’ National Insurance contributions doesn’t guarantee higher wages, more secure jobs or lower prices. It places public money at the disposal of employers and hopes some benefit will eventually reach their workers.
Labour responded with the usual managerial boasts about business rates, local powers and transport costs. A party spokesperson said the government was already creating a “renaissance for Britain’s high streets” and accused the Greens of making “unrealistic” and unfunded promises.
There’s nothing unrealistic about taxing bank profits. The money plainly exists. What Labour considers unrealistic is any serious interference with the claims of finance capital. Its own measures are designed to manage the decline of Britain’s high streets without confronting the banks, landlords and monopolies draining them.
The argument between Labour and the Greens is therefore about how the capitalist state should distribute support among different sections of the employing class. The Greens want the largest banks to surrender some of their profits to smaller capital. Labour offers more limited relief while presenting itself as the steadier manager of the system.
Neither position challenges the rule of capital itself. The bankers retain control over credit, investment and the livelihoods of millions. Workers remain the people who produce society’s wealth, yet the entire debate treats them as employees to be hired if employers receive a sufficient tax incentive. Even when politicians discuss taking money from the banks, the working class appears only as an indirect beneficiary of somebody else’s business plan.
