Chancellor John Healey is preparing to raise taxes on UK banks in the 28 October budget, with reversing Jeremy Hunt's cut to the bank profit surcharge — from 3% back to 8% — the leading option. The move would raise upwards of £2bn annually, offset rising government borrowing costs driven by Middle East conflict, and tap an industry whose four largest players generated £200bn in pre-tax profits over five years. The IMF, meeting Healey in Bangkok, praised the UK's deficit reduction trajectory and urged him to stay the course. The bank tax was considered and rejected by Healey's predecessor Rachel Reeves, who feared deterring investment. Healey has apparently overcome that hesitation. The TUC's Paul Nowak framed the case bluntly: Britain's big four banks make a billion pounds a week, bonuses hit post-crash records, and those profits were driven by high interest rates — the same rates punishing mortgage holders. The political logic is straightforward: extract from an industry whose windfalls are already politically toxic. Meanwhile, Prime Minister Andy Burnham travelled to Scotland to deliver a speech in Lanarkshire offering First Minister John Swinney a collaboration on devolving powers not just from Westminster but from Holyrood down to Scottish regions and towns. The pitch — channelled through the No10 North initiative — positions Burnham as a devolutionist who can outflank the SNP on local empowerment without conceding a second independence referendum, which he has repeatedly ruled out. The SNP responded with a charge of hypocrisy. Minister Stephen Flynn argued that Burnham wants power pushed out of Westminster while refusing Scotland the ultimate exercise of self-determination. The PM's willingness to reopen debate on the UK's relationship with the EU while blocking an independence referendum hands the SNP a clean rhetorical weapon, even if the constitutional logic is debatable. Burnham's visit coincides with the SNP's annual conference in Aberdeen, where the party announced the biggest pro-independence campaign since the 2014 referendum. The timing is not accidental — offering devolution on the same day the SNP launches its independence push is a deliberate framing contest: localism versus sovereignty. In other developments, a youth welfare review led by Alan Milburn will reportedly recommend a separate system for young people not in education, employment or training, offering less cash but more intensive health and employment support. Reform UK's Robert Jenrick dismissed colleague Sarah Pochin's undercover claims that the party is "chauvinistic," telling BBC Radio 4 "that's not my experience of Reform." The day's moves share a structural logic: consolidate fiscal headroom by taxing concentrated profits, and consolidate political headroom in Scotland by offering partnership short of sovereignty. Both are redistribution plays — the question is whether the redistribution is generative or merely tactical.
