The Liberal Democrats have proposed a windfall tax on major banks to fund a new energy efficiency loans scheme for homeowners. Daisy Cooper, the party's Treasury spokeswoman and deputy leader, announced the policy at the Lib Dems' Bournemouth conference.
Cooper said the time-limited levy would target unexpected profits banks made from quantitative easing programmes following the 2008 financial crisis. The tax would raise an average of £7 billion annually by the end of the decade.
Targeting bank windfall profits
Cooper explained that banks are making unexpected profits due to unintended consequences of quantitative easing from over a decade ago. She told delegates: "We taxpayers are now shelling out billions of pounds to the shareholders of the big banks simply because interest rates have remained so high for so long."
"Banks never expected to receive this windfall," Cooper said. "They never relied on this windfall, and they never took on any risk to reap this windfall."
The party compared the proposal to their previous call for a windfall tax on oil and gas companies following Russia's invasion of Ukraine. Cooper announced: "So today conference, I can announce that we Liberal Democrats will raise the capital to underwrite our new energy security bank through a new time limited windfall tax on the big banks."
New energy security bank
The windfall tax revenue would underwrite the creation of a new energy security bank. Cooper said this institution "could unleash up to £10 billion of affordable loans to homeowners to invest in their energy security and to bring energy bills down permanently".
The scheme would help property owners make energy efficiency improvements to reduce their bills. Cooper told reporters the programme would eventually "pay for itself" as borrowers repay their loans, even after the windfall tax period ends.
Party attacks tech billionaire
The announcement came after party leader Sir Ed Davey branded Elon Musk a "criminal" over comments made at a central London rally. The Liberal Democrats are calling for Parliament to summon the tech billionaire to answer for his "fight back" or "die" remarks.
Davey has also requested an Ofcom investigation into X, Musk's social media platform, and Musk personally for allegedly failing to meet duties under the Online Safety Act. The party leader is expected to continue his criticism of the Tesla and X owner in his conference speech on Tuesday.
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
