The writer, a founding partner of Veritum Partners, argues against a potential UK bank windfall tax under the new prime minister's growth agenda. Chief executives of Santander, Citi and JPMorgan have warned of negative impacts, with JPMorgan stating its £3bn Canary Wharf head office plans depend on a "continuing positive business environment in the UK."

Windfall taxes on UK banks date to Geoffrey Howe's 1981 budget. Since 2009, measures including the bonus tax, bank levy (2011) and bank tax surcharge (2015) have raised nearly £50bn. However, the sector has generated a lousy return on equity of less than 6% since 2009, well below cost of capital. Current higher returns reflect cyclical patterns, not sustained windfalls.

The author contends such retribution taxes are flawed: higher taxes reduce retained profits that fund customer lending, potentially raising banks' cost of capital as global investors shift elsewhere. Banks may also pass costs to customers. These taxes lack economic justification beyond targeting a politically soft industry, undermining the government's stated growth mission across "every postcode."