The leader of a trade union has put forward a proposal to increase taxation on bank profits, as reports circulate that Chancellor John Healey may be preparing measures aimed at the financial services industry ahead of the Budget. Efforts to identify additional revenue streams and hold the UK's borrowing position within acceptable bounds are under way at the Treasury, with debt-servicing costs having climbed across recent months.

Broadcasting reports indicate that Treasury officials are weighing a plan to roll back the reduction in the bank profit surcharge — a levy that dropped from 8% to 3% under Jeremy Hunt during his tenure as Chancellor — potentially restoring it to its previous level.

Support for the proposal came from TUC General Secretary Paul Nowak, with the organisation's own figures putting the annual revenue gain at £2.25 billion. He stated that the country's four largest banks were collectively generating around a billion pounds every week, at a time when staff bonuses had reached their highest level since the financial crisis. The earnings figures, swelled by an extended period of elevated borrowing costs, came at a time when many homeowners were under pressure from rising repayment bills.

The TUC argued that a bank surcharge set at 16% could generate around £24 billion in tax receipts over four years, a position it advanced alongside a separate claim that the previous reduction in bank taxation had already cost the Treasury roughly £6 billion in foregone revenue. Both trade unions and policy research organisations have put forward calls, on multiple occasions, for banks to face a greater tax burden.

A levy on the excess profits recorded by commercial banks formed part of a broader set of proposals put forward this week by the Institute for Public Policy Research, with the think tank estimating the temporary surcharge could yield around £1 billion and contribute toward a wider package intended to raise £16 billion in additional revenue for lower-income households. According to the organisation's own projections, the Chancellor's fiscal headroom has narrowed by as much as £15 billion since spring — a deterioration the think tank, which holds close ties to Labour policymaking, argued the proposals would help reverse.

Both the Conservatives and industry groups have raised concerns that placing additional burdens on banks could reduce investment flows and weaken the country's standing as a hub for financial services. The CBI's chief economist, Louise Hellem, described financial services as a sector whose contribution to investment, innovation, and wider business growth across the economy remains indispensable.

The Financial Services Growth and Competitiveness Strategy and the Leeds Reforms have laid out a policy direction. Proponents argue that the autumn Budget could establish conditions — stable, foreseeable, and open to competition — under which those reforms translate into concrete outcomes, drawing in domestic capital, broadening the depth of UK financial markets, and widening the pathway for businesses seeking to expand.

Shadow Chancellor Andrew Griffith, speaking for the Conservatives, put forward the view that the UK economy requires expansion, and that this depends partly on keeping the business tax burden — already at a historically elevated proportion of overall revenue — from climbing further through sector-targeted levies, noting in particular that the banking industry already operates under a higher rate than its counterparts in rival international financial hubs. Increased taxation or regulatory pressure on the financial services sector, he indicated, could constrain its growth.

A Treasury spokesperson noted that tax decisions remain the Chancellor's to announce at formal fiscal events, rather than through responses to unconfirmed reports or speculation, while the Chancellor has put the public on notice that the 28 October Budget will involve considerable financial strain. Both he and Prime Minister Andy Burnham have put forward pledges to ease the financial strain on households and businesses, at a time when the cost of government borrowing has risen.

Addressing reporters from the International Monetary Fund gathering in Bangkok on Thursday, the Chancellor described the current period as a difficult one. Noting that the public was aware of global economic tensions and the strain those tensions were placing on household finances as well as on the administration, he went on to say that pay increases for NHS doctors and nurses might not bring additional funding to the departments concerned, with any spending commitments needing to be met from within existing budget allocations. Separately, a video posted online drew attention to him and Foreign Secretary Ed Miliband sampling Thai street food in Bangkok in the days leading up to the forthcoming Budget.