Will Healey tax the banks?

Plus: Heathrow must grow, and the double whammy behind the housing crisis

Oct 16, 2026

John Healey and Ed Miliband are living it up in Thailand taking night rides on a tuk-tuk. They are there for an event with the IMF, during which it has emerged that Healey is considering raising taxes on the banking sector in his upcoming Budget. As CPS fellow Gerard Lyons argues below, going after one of the remaining productive sectors in the UK shows Healey’s lack of understanding of how to promote growth. Not only that, it might make our banks ripe for takeover.

Elsewhere, various EU leaders have said they would welcome Britain rejoining the EU. We should be careful about their open embrace. As Harry Phibbs wrote for CapX recently, punitive measures would be part of the price of any return.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Oscar Gill-Lewis
Deputy Editor, CapX

Today’s Takes

Fresh thinking from CapX

*Wiktor Szymanowicz/Future Publishing via Getty Images*

Healey's tax raid on banks is bad for growth

Gerard Lyons

‘While I am not a supporter of banks paying more tax, I am in favour of a shift in how much interest is paid to banks on their reserves at the Bank of England.’

Banks expect the Chancellor John Healey to raise taxes on them. It sends the unfortunate message that he sees the sector as a cash cow. This demonstrates that he doesn’t know how to encourage growth, and he won’t take the tough decisions needed to control public spending. Changing to a tiered system for paying interest on reserves held at the Bank of England could save four times what a bank tax hike raises, and without damaging the economy. Read More

Blocking Heathrow's expansion is making Britain poorer

Alys Denby

‘No government can claim to be pro-growth and internationally oriented while deliberately constraining its most vital transport hub.’

Sadiq Khan and Andy Burnham are delaying Heathrow expansion even though it is operating at 99% capacity. This is a disappointing development, given Rachel Reeves’s previous commitment to an aviation extravaganza to boost growth. Not only would expansion make the passenger experience much more pleasant, it would bring billions to the UK economy and support tens of thousands of new jobs. Read More

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Best of the Web

The double whammy causing our housing crisis

Ben Hopkinson, City AM

‘The mismatch between high demand and low supply drives many of the symptoms of the housing crisis: the unaffordability of properties, smaller and lower quality homes, and the young being priced out of home ownership.’

England has a serious housing crisis. We are missing 6.9 million homes, and the number is growing. If we had built at the same rate as France did since the 1980s we could have halved our housing deficit. Migration has compounded the issue of our stagnant housebuilding, with the average home in England £15,000 more expensive as a result of record immigration. If we had built like France and capped net migration at 100,000 a year since 1997, we would have come close to ending the housing shortage altogether. Read More

Why Labour cannot save the economy

Henry Hill, The Critic

‘The Chancellor is planning a tax raid on one of the British economy’s few really productive sectors to fund yet more fiscal transfers to some of the least productive people in the economy.’

As the Budget approaches, John Healey finds himself in a tricky position. He has to find enough money to sustain Andy Burnham’s delusions that the good times are back while staying within Rachel Reeves’s tight fiscal rules. Even if he wanted to make steep cuts to spending, Labour MPs would not let that happen, nor deregulation, both of which would actually help the country grow. Read More