Reeves told to slap new tax on banks to raise £8bn a year

The Treasury should hit commercial banks with a new windfall tax on their profits to raise up to £8bn a year, according to a think-tank.

The left-leaning Institute for Public Policy Research (IPPR) says the UK taxpayer is spending £22bn a year compensating the Bank of England for losses on its quantitative easing (QE) programme, which it argues is benefitting private banks.

It says the Government should therefore target private banks with a levy, which it says would raise £7bn to £8bn per year over the course of the next four years.

Below, The i Paper looks at the idea and whether it would work in practice.

What is QE and why does IPPR argue it benefits private banks?

QE involved the Bank of England buying large amounts of Government and corporate debt – known as bonds. It did thi