An adviser to Andy Burnham has cautioned against imposing additional taxes on businesses, even as union leaders renewed calls for higher levies on banks to help fund social support measures.

Lord Jim O’Neill, a former chief economist at Goldman Sachs who has been assisting Burnham with policy development, emphasized the need for fiscal restraint rather than tax increases. Speaking recently, O’Neill stated that difficult financial decisions should not be avoided but argued that increasing business taxes would be counterproductive. He urged that further tax hikes on companies should be avoided.

Burnham, who is positioning himself as a prospective prime minister, has committed to delivering aid for households grappling with the rising cost of living while adhering to the Labour Party’s fiscal rules.

In contrast, Paul Nowak, the general secretary of the Trades Union Congress (TUC), advocated for reinstating the bank surcharge that was cut by the previous Conservative government. He suggested reversing that cut could generate roughly £9 billion over four years. Nowak urged Burnham to boldly challenge entrenched interests and make clear his support for ordinary voters, describing any reluctance to raise funds from banks as a “handbrake” on progress.

The banking sector remains apprehensive about potential tax increases if a Labour government led by Sir Keir Starmer and Chancellor Rachel Reeves takes office. One senior banker described the City as “holding its breath,” noting that fiscal pressures limit options for new revenues. Another finance executive acknowledged that banks may have to acquiesce to tax rises, given recent strong profitability.

The TUC underlined its argument by pointing out that banks distributed record-setting bonuses over the past year, reinforcing their capacity to contribute more in taxes. According to TUC estimates, additional revenue of £9 billion could provide emergency support for two-thirds of households facing energy bill increases and fund a permanent social tariff to lower utility costs for many consumers. The union also proposed a 35 percent surcharge on bank profits, paralleling the Conservative government’s windfall tax on energy companies, which it said could raise £6 billion over four years.

This renewed focus on bank taxation has reignited concerns among financial sector representatives that banks could become prime targets for tax increases in the coming autumn Budget. Banks previously mounted a vigorous campaign, led by JPMorgan CEO Jamie Dimon, to block higher taxes during the last Budget cycle. Chancellor Reeves ultimately refrained from imposing new bank levies, reasoning that taxing a key contributor to economic growth under the government’s industrial strategy could be detrimental. Shortly after the Budget announcement, JPMorgan confirmed plans for a new headquarters tower in London’s Canary Wharf.

CityUK, a prominent financial industry lobby group, reiterated its opposition to additional sector-specific tax increases. The group warned that the UK already trails other nations on tax competitiveness and stressed the importance of maintaining a stable and internationally attractive tax environment to foster investment, growth, and employment across the country.