Jamie Dimon, chief executive of JPMorgan Chase, has warned Chancellor John Healey that raising taxes on the wealthy and the financial sector could drive jobs out of London, citing a decline in finance roles in New York that he partly blamed on the city's tax burden.
Warning over tax hikes
In a phone call with Mr Healey, Mr Dimon said higher taxes can result in jobs being driven elsewhere, according to The Financial Times. He warned against a higher windfall levy on bank profits or wider tax rises on wealth.
The Standard understands that Mr Dimon's comments on threats to jobs were not in reference to JP Morgan's planned new £3 billion headquarters in London but were highlighting more broadly how cities can lose financial posts if taxes are ramped up. The main thrust of his points was that if governments can get public policy right, that can avoid the need for tax rises, according to a person close to the conversation.
Context of the warning
JP Morgan Chase employs 23,000 people in London, Bournemouth, Glasgow and Edinburgh. Mr Healey, who is due to deliver his first Budget in the autumn, is set to have other introductory conversations with bank bosses in the coming days.
The talks come as trade union chiefs are urging the Labour government to hike taxes on banks by between £9 billion and £60 billion over four years. Paul Nowak, General Secretary of the Trades Union Congress, said recently: “Our big four banks in this country are making something like a billion pounds in profits every single week. We had a record year for bankers' bonuses last year in the City of London. I don't think it's unfair to ask those with the broadest shoulders to help out families who are going to struggle with those heating bills.”
Dimon's previous criticisms
Mr Dimon has previously sounded warnings against raising taxes on the industry and criticised the UK's corporation tax surcharge for banks. Earlier this month, he said in an interview for the Master Investor Podcast that he “always thought it was wrong”.
He argued, referring to the 2008/09 financial crisis: “JP Morgan did not damage the UK… I just thought it lacked principle to punish a company that had nothing to do with the crisis, and is still there 16-17 years later.”
On the potential for the surcharge to be hiked, Mr Dimon said: “If the Government decides to do it then there's nothing I can do, but it will over time cause decisions to be made that they may not like. If you have an uncompetitive tax system, capital leaves your country and… goes to other countries”, he warned, referring to an exodus of companies from London's stock markets in the past two years.
Budget pressures
Mr Healey, who resigned as Defence Secretary from Sir Keir Starmer's government in a row over military spending, will deliver his first Budget as Chancellor on October 28. He faces having to find billions to fund Andy Burnham's devolution priorities, increased defence spending and to address Britain's social care crisis.
Mr Burnham has backed former Chancellor Rachel Reeves' decision to introduce the “mansion tax” on homes worth £2 million or more which will hit London and the South East hardest. But he has played down the prospect of imminently replacing council tax and stamp duty with a new property levy which could land London with a £7.5 billion extra bill.
Economists have warned Mr Healey that he will need to either raise taxes or cut spending as pressure on the public finances has left no room for extra borrowing.
