Calls for a levy on bank profits have reached the Chancellor amid indications that the forthcoming budget will draw additional revenue from the financial sector. Efforts to identify additional revenue streams and bring the UK's borrowing costs under control are under way at the Treasury.

Broadcasting reports indicated that Treasury officials were weighing a plan to roll back the bank surcharge cut introduced under Jeremy Hunt, which brought the levy on lenders' profits down from 8% to 3%.

TUC general secretary Paul Nowak voiced support for the measure, with figures from his organisation putting the annual revenue gain at £2.25 billion. He stated that the four largest banks in Britain were collectively generating around one billion pounds every week, with staff bonuses having reached their highest level since the financial crisis.

The earnings figures, swelled by a prolonged period of elevated borrowing costs, translated into notable gains for lenders while many homeowners faced steeper repayment burdens. The TUC argued that a surcharge rate of 16% would generate around £24 billion in additional tax receipts over four years, a position it outlined alongside its view that banks have not contributed enough given the estimated £6 billion reduction in Treasury income attributed to the previous administration's decision to lower the bank tax rate.

Both trade unions and policy research organisations have put forward calls, on multiple occasions, for banks to face a higher tax burden. A £1 billion levy on the windfall earnings of commercial banks forms part of a broader package put forward this week by the Institute for Public Policy Research, which outlined a set of measures it says could collectively bring in an additional £16 billion to ease financial pressures on lower-income households.

The group — whose work has fed into Labour's policy thinking — put forward a package of measures it contended would rebuild the Chancellor's financial buffer, a reserve its own calculations placed at up to £15 billion smaller than it had been in the spring.

Both the Conservatives and City lobby groups have raised objections that any levy directed at banks could constrain investment flows and erode the country's standing as a global hub for financial services. The CBI's chief economist, Louise Hellem, described the financial services sector as a cornerstone of investment activity, innovation, and broader business expansion throughout the wider economy.

The Financial Services Growth and Competitiveness Strategy and the Leeds Reforms have laid out a broad policy direction, though observers note that translating those plans into measurable outcomes remains the work still ahead. Proponents argue that the autumn Budget could establish conditions — stable, foreseeable, and open to competition — that translate those policy changes into real-world outcomes, drawing in domestic capital, broadening the depth of UK financial markets, and supporting more businesses in their efforts to expand.

Opponents of additional sector-specific taxation have argued that policies in this space should equally steer clear of steps that erode market competitiveness or diminish the returns that make investment worthwhile. Conservative shadow chancellor Andrew Griffith argued that the country needed economic expansion, pointing out that corporate taxation already accounts for a record proportion of total government receipts and that the banking sector, which already operates under a higher tax burden than rival international financial centres, should not face additional sector-specific levies. He also argued that increased taxation on the financial services sector could weigh on its capacity for growth.

A Treasury spokesperson indicated that tax decisions remain the Chancellor's remit, to be set out at formal fiscal events rather than addressed in response to ongoing speculation, while the Chancellor has put the public on notice that the Budget on 28 October will involve difficult choices. Both the Chancellor and Prime Minister Andy Burnham have pledged support for families and businesses facing cost-of-living pressures, a commitment maintained despite a rise in government borrowing costs.

Addressing reporters at the International Monetary Fund gathering in Bangkok on Thursday, the Chancellor described the current period as a difficult one. The Chancellor also faced scrutiny over an upbeat video posted online, which showed him and Foreign Secretary Ed Miliband sampling Thai street food from a tuk-tuk in Bangkok, footage that circulated fewer than two weeks before the Budget date. Separately, he indicated that departmental budgets for pay rises covering doctors and nurses would not automatically receive additional funding, noting that any spending commitments would need to be met within existing financial limits, while also pointing to public awareness of global economic pressures and the strain those pressures place on household finances and on the government itself.