These tax rises have just become much more likely in the Budget

Hitting banks with a windfall tax and extending the mansion tax to homes worth £1.5m have the backing of voters a poll suggests, in a potential boost for the Chancellor ahead of the Budget. John Healey is facing a major challenge to balance the books ahead of the 28 October Budget as global instability threatens to wipe out his financial headroom against Labour’s spending and borrowing rules. Many analysts expect Labour will have to increase taxes once again, and the Chancellor is believed to be considering hitting banks with a windfall tax as they profit from rising interest rates, as well as extending the mansion tax to lower-value homes. Shorts While his predecessor Rachel Reeves became deeply unpopular in the wake of tax-raising Budgets, Healey would have the backing of voters for these measures, the latest BMG Research survey for The i Paper shows. 50 per cent of voters back a windfall tax on banks, with just 13 per cent opposed, with Labour, Liberal Democrat and Green voters most supportive. Even among Reform voters more (40 per cent) support such a move than oppose it (21 per cent). The Chancellor is believed to be considering such a move as the UK’s four largest lenders – HSBC, NatWest, Barclays and Lloyds Banking Group – generated £200bn in pre-tax profits over the past five years, largely off the back of rising interest rates. The Trades Union Congress (TUC) said reversing the 2023 reduction of the bank surcharge – an extra tax on profits – from 8 per cent to 3 per cent would raise £9bn over four years and could help fund a “social tariff” to help low and middle earners with rising energy bills. Similarly, 49 per cent of voters back extending the mansion tax, with just 21 per cent opposed, with more support than opposition across all parties. Under current plans, owners of properties in England worth more than £2m will be hit with a surcharge of at least £2,500 from 2028. Voters were asked if they backed reducing the threshold to £1.5m Healey is reportedly considering lowering the threshold to properties worth £1.5m, which would increase the number of homes forecast to pay the charge from 134,000 to 271,000 based on current values. Such a move would raise around £800m, according to expert estimates. However, the Chancellor is facing a backlash from London Labour councils and MPs who argue that £1.5m is the price of a family home, not a mansion. Healey, who quit as defence secretary over a lack of funding, is also under pressure to find £4.7bn to plug a gap in the Defence Investment Plan in this year’s Budget, and then go further in next year’s spending review to fund military spending of 3 per cent of GDP by 2030. Andy Burnham this month rejected Conservative proposals to cut welfare to directly fund a rise in defence spending and the poll suggests this is backed by Labour voters. Around a third said benefits should be protected even if defence spending rises less (37 per cent), or that defence spending should be increased without cutting benefits (32 per cent). Only one in five (19 per cent) backing increased military spending, even if benefits are cut. Conservative and Reform voters are more likely to support moves to increase defence spending even if that means cutting benefits. BMG surveyed a representative sample of 1,515 GB adults between 23rd and 24th September. BMG are members of the British Polling Council and abide by its rules.