British banks are ramping up their efforts to lobby against potential tax increases in the upcoming budget of the new Labour government, according to high-ranking industry insiders who spoke to Reuters. There has been no explicit indication from Prime Minister Keir Starmer or Finance Minister Rachel Reeves that banks will face higher taxes, but Starmer's recent allusion to the responsibility falling on those with "broader shoulders" has heightened industry anxiety, as revealed by three sources. Banks have reaped substantial profits in recent times due to elevated interest rates. Reeves is scheduled to meet with top banking executives soon, during which the topic of increased taxation on bank profits is expected to be broached, according to two of the sources. A Treasury spokesperson stated that they would not comment on speculations regarding tax adjustments outside of a fiscal event. The sources, who requested anonymity due to the delicate nature of the issue, predict that the Treasury might increase an existing surcharge already paid by banks. This approach would be simpler than altering the interest rates UK banks earn on their reserves at the Bank of England, which could potentially distort monetary policy outcomes, they added. HSBC, the UK's biggest bank, reported a 78% surge in pretax profits to $30.3 billion in February, with competitors such as NatWest Group and Barclays also posting strong earnings. British bank stocks experienced a momentary decline last week after an unnamed former government official advocated for a "sensibly crafted" levy on banks in the Financial Times. The bank levy, established in 2011 post-global financial crisis to discourage risky behavior and uncontrolled growth, has not seen a serious attempt by any UK government to phase it out, despite the sector accumulating billions in capital. A UK Finance spokesperson informed Reuters that they are cognizant of the growing concern. The trade association is set to urge the complete phasing out of both the bank levy and corporation tax surcharge in its pre-budget submission to the Treasury, which is accepting feedback until September 10. UK Finance highlighted that UK-based banks pay a significantly higher tax rate compared to those in New York and are projected to face higher tax rates than other European capitals in the future. Simon Youel, Head of Policy and Advocacy at Positive Money, argued that any increase in the banking surcharge or bank levy should not be seen as a tax hike but as a reversal of tax cuts granted to banks under the previous Conservative government. Starmer and Reeves are set to preside over Britain's annual investment summit next month, aiming to convince international investors to support their initiatives to revitalize the UK's sluggish economic growth. "All legislation passed last year was aimed at fostering a more competitive environment and was endorsed by Labour," one source commented. "The industry would be perplexed and disheartened if such measures were to proceed. The banks are definitely not passively accepting this scenario."