JPMorgan Chase chief Jamie Dimon has warned Chancellor John Healey that higher taxes on banks could drive financial services jobs away from Britain…reports Asian Lite News Desk
JPMorgan Chase chief Jamie Dimon has warned Chancellor John Healey against creating a more hostile tax environment for banks, arguing that higher levies could drive financial services jobs to other markets.
The warning came during a call between Dimon and Healey last week as the banking sector prepared for a pre-Budget lobbying campaign. Healey is expected to face competing demands as he considers how to raise revenue while supporting economic growth.
Dimon cited a material decline in finance jobs in New York, which he attributed partly to the city’s tax burden, according to people briefed on the conversation. His intervention reflects concern among bank executives that Britain could become less attractive to financial services companies if the tax burden rises.
Dimon, one of the most influential figures in global finance, was among the banking executives who lobbied against higher taxes before last year’s Budget. He held discussions with former Chancellor Rachel Reeves while JPMorgan considered plans for a new £3 billion London headquarters at Canary Wharf.
Banks could present a potential source of additional revenue for Healey in his October Budget after the sector recorded strong profits. Union leaders have called for higher bank taxes to help fund support for households facing high energy bills.
Healey has not publicly set out his position on bank taxation. Dimon nevertheless made clear during their conversation that a windfall levy on bank profits or broader increases in wealth taxes would be unwelcome, according to a person briefed on the call.
Another person familiar with the exchange said Dimon told Healey that the UK’s economic challenges could be addressed only by encouraging growth, with the route to that being “through good policy”.
The person said Dimon’s comments about taxation were not aimed solely at the UK and were not “the main part of their conversation”. The exchange was described as “very cordial”.
Dimon was among the first banking chiefs to speak to the new Chancellor at the request of Healey’s team. Calls with executives from other banks are expected to follow as the Treasury prepares for the Budget.
The JPMorgan chief had publicly warned Prime Minister Andy Burnham and Healey last month that higher bank taxes could have “adverse consequences”.
“It would be one more negative on that bucket of things you’ve got to think about,” Dimon said when discussing the possibility of the Government raising the bank levy or corporation tax surcharge.
Both measures were introduced after the state intervened to support major UK lenders during the 2008 financial crisis.
“It may sound great, ‘tax the banks’, but it’s $5bn that my shareholders paid on that extra tax,” Dimon said. “Things like that have adverse consequences.”
A person close to Dimon’s discussions with Reeves before last November’s Budget said: “Dimon always majors on the impact of bank taxes and will want assurances that a Burnham government will back the new Canary Wharf HQ.”
Asked whether Dimon had threatened to abandon the headquarters project if banks faced higher taxes, the person said: “‘Threatened’ is too strong a word. But of course any business takes into account the fiscal environment before making final decisions about investments.”
Several banking executives have already spoken against a heavier tax burden. The Treasury said: “The chancellor meets with senior representatives from sectors across the economy on a regular basis, including the financial services sector.”
