JP Morgan chief executive Jamie Dimon has warned Labour leadership candidate Andy Burnham against raising tax charges on banks, cautioning that such a move could threaten plans for a £3bn headquarters in London and push investment away from Britain.
Dimon's warning on bank tax surcharge
In an interview recorded last week and released on Tuesday on the Master Investor Podcast with Wilfred Frost, Dimon expressed concern about potential tax increases targeting the banking sector. "I mean, it may sound great, 'tax the banks', but it's $5bn that my shareholders paid on that extra tax," Dimon said. "I just think things like that have adverse consequences."
Banks in the UK currently pay a 28% corporation tax rate, higher than the standard 25%, along with a separate levy on their UK balance sheets. Dimon, who has a history of criticising the UK's bank tax surcharge, urged caution: "I would be very cautious if I was a government thinking that penalising any company out of the ordinary is a good thing for that country. I always thought [the UK bank levy] was wrong."
JP Morgan's UK investment at stake
Dimon gave the go-ahead last year to build a 279,000 sq metre (3m sq ft) tower in Canary Wharf, which would serve as JP Morgan's UK headquarters and house more than half of its 23,000 UK workforce. The decision came hours after former chancellor Rachel Reeves spared the banking industry from increased taxes in the autumn budget.
However, in May Dimon indicated he could scrap the project if Keir Starmer were replaced by a new Labour prime minister hostile to banks. On the podcast, he reiterated that warning, stating he did not know what he would do if Burnham's government raised taxes for banks. Asked whether he would reverse the decision to build the Canary Wharf tower, Dimon said: "That's a binary decision … I don't know what I would do. I thought Rachel [Reeves] did a great job by the way. I want London to be a happy home for a long time."
Competitive tax system urged
Dimon emphasised the importance of a competitive tax system for the UK: "[The UK] should have a competitive tax system … that is consistent and conducive to capital formation that will drive the growth of a country." He warned that an uncompetitive tax regime would drive capital away: "If you have an uncompetitive tax system, capital leaves your country. And if capital leaves your country, it goes to other countries. And you see that now. You see, what is it? How many companies have delisted from London in the last couple of years? I wouldn't want to see that if I was running a country."
Context and reactions
Trade unions have been urging Burnham to tax wealth, and the Trades Union Congress has claimed that reversing the previous Conservative government's cut to the bank surcharge could raise £9bn over four years. Dimon countered that JP Morgan has been a responsible corporate citizen: "JP Morgan did not damage the UK and I called the chancellor at the time. [We] did not damage the UK. We're a great citizen there. We hire people there. We want to be bigger there."
