See more Daily Mail on Google - save us as a Preferred SourceBy DAVID WILCOCK, DEPUTY POLITICAL EDITOR Published: 09:57 BST, 30 August 2026 | Updated: 10:03 BST, 30 August 2026
Banks and oil firms who have benefited from Trump's war with Iran could be hit with a fresh windfall tax at the Budget as John Healey seeks to raise revenue without targeting workers.The Chancellor is said to be eyeing up a fresh levy on firms as the Treasury seeks to meet commitments including £4.7billion for the Armed Forces inherited from Sir Keir Starmer.Hammering company profits is seen as 'low hanging fruit' by the government, which wants to avoid unpopular new levies on working people. Earlier this month BP revealed its strongest quarterly profits for four years after being boosted by volatile energy prices during the Middle East conflict started by Donald Trump.The FTSE 100 company revealed its preferred profit measure – underlying replacement cost profit – surged by around 78 per cent to £4.2billion for the second quarter of 2026, compared with the previous three months.But any windfall tax will raise eyebrows after it was revealed last week that measures to tackle the eyewatering welfare bill are unlikely to feature in the October financial event. Yesterday a former Tory minister who turned down a role in No10 under Andy Burnham warned against 'stupid' wealth tax rises.Lord Jim O'Neill told The Times it would show the 'scared and lazy' government was afraid to take action against 'sacred cows' like welfare reform and the pensions triple lock. The Chancellor is said to be eying up a fresh levy on firms as the Treasury seeks to meet a £4.7billion commitment to pour cash into the Armed Forces inherited from Keir Starmer Yesterday a former Tory minister who turned down a role in No10 under Andy Burnham warned against 'stupid' wealth tax rises.And earlier this month the boss of JP Morgan warned against a windfall levy on bank profits or wider tax rises on wealth.Jamie Dimon told Mr Healey on a phone call that higher taxes could result in jobs being driven elsewhere, citing a decline in finance roles in New York that he partly blamed on the city's tax burden, according to reports by the Financial Times.According to the Telegraph, the Chancellor is looking at measures including a time-limited tax on bank profits similar to that levied on oil and gas firms after the invasion of Ukraine drove up consumer prices in 2022. He could also extend or increase the rate of that levy, which is due to run until 2030.Mr Healey will deliver his first Budget as Chancellor on October 28, following his appointment by Prime Minister Andy Burnham.The former defence secretary is faced with the challenge of finding more money to fund Mr Burnham's devolution priorities and increased defence spending, as well as new cost-of-living measures such as cutting VAT from energy bills and reducing business rates for pubs.Experts, including the National Institute of Economic and Social Research (NIESR), have warned Mr Healey that he will need to either raise taxes or cut spending elsewhere as pressure on the public finances has left no room for extra borrowing.The PM is said to have pushed back any changes to the creaking and bloated benefits system until next year, with aides saying he can only concentrate on 'one big issue at a time'.
