Banks could be hit with 38% windfall tax under Green Party's plan to end 'rip-off Britain'

The proposal has drawn sharp opposition from Wall Street, with JP Morgan chief executive Jamie Dimon cautioning Chancellor John Healey that such measures risk pushing financial sector employment overseas.

Notably, the Greens maintain that major lenders are "profiteering from chaos" during a cost-of-living crisis while ordinary households and small firms bear the burden.

The levy would apply specifically to net interest income and fees generated from UK banking operations, including charges such as mortgage fees.

By restricting the tax to domestic activity, the Greens contend they would avoid penalising banks' broader international business, thereby eliminating any motivation for lenders to relocate operations overseas.

Revenue raised would be channelled into doubling the employment allowance available to small and medium-sized enterprises, a move the party claims could reduce individual companies' national insurance obligations by as much as £10,500.

Mr Polanski said: "While we are in a cost-of-living crisis, and with people unable to pay bills and small businesses being directly squeezed by interest rate rises which are expanding already obscene profits by the big banks, the Greens are calling for an end to rip-off Britain."

Despite such concerns, the proposal has found backing from several quarters.

Analysis by the campaign group Positive Money concluded that a 38 per cent windfall tax would mirror the existing Government levy on oil and gas firms, and could "raise £19billion from the big four banks alone if announced in this year's Autumn Budget".

The Trades Union Congress (TUC) has separately advocated a comparable measure, suggesting it could yield between £20billion and £50billion over four years.