Jamie Dimon, the chief executive of JP Morgan, has warned that higher taxes on banks could threaten the firm’s plan to build its £3bn headquarters in London and push investment away from Britain. The warning comes as the boss of the world’s biggest bank says he does not want the UK’s new prime minister targeting the banking industry to raise extra revenue.
In an interview on the Master Investor Podcast with Wilfred Frost, recorded last week and released on Tuesday, Dimon said higher charges would have negative effects on shareholders and the wider economy.
“I mean, it may sound great, ‘tax the banks’, but it’s $5bn that my shareholders paid on that extra tax,” said Dimon. “I just think things like that have adverse consequences.”
Banks in the UK pay a 28% corporation tax rate, which is higher than the standard 25%, and they also face a separate levy on their UK balance sheets. Dimon said he would be cautious about any government that singled out companies for higher-than-normal taxation.
“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,” Dimon said. “I always thought [the UK bank levy] was wrong.
“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.”
JP Morgan agreed last year to build a 279,000 sq metre (3m sq ft) tower in Canary Wharf hours after the banking industry was spared increased taxes in former chancellor Rachel Reeves’s autumn budget. The move was seen as a major commitment to London after earlier uncertainty about the future of the bank’s UK operations.
In May, Dimon said he could abandon the tower project, which is set to serve as JP Morgan’s UK headquarters and house more than half its 23,000 UK workforce, if Keir Starmer were replaced by a new Labour prime minister who was hostile to banks.
He repeated that warning on the podcast and said he did not know what he would do about the planned office if Burnham’s government raised taxes for banks.
Asked whether he would U-turn on the decision to build the Canary Wharf tower, he 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.
He added: “[The UK] should have a competitive tax system … that is consistent and conducive to capital formation that will drive the growth of a country.”
Trade unions have been urging Burnham to tax wealth, and the Trades Union Congress has said £9bn could be raised over four years if the previous Conservative government’s cut to the bank surcharge were reversed.
“If you have an uncompetitive tax system, capital leaves your country,” Dimon said. “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.”
Why does Dimon oppose higher bank taxes?
Dimon says additional taxes would reduce investment, increase costs for shareholders and create incentives for capital to move elsewhere. He argues that the UK should keep a tax system that is competitive, predictable and supportive of business growth.
What is at stake for JP Morgan in London?
The planned Canary Wharf tower is intended to be JP Morgan’s UK headquarters and to house more than half of its 23,000 UK employees. Dimon has suggested that a hostile tax environment could affect the future of the project, although he said on the podcast that he wants London to remain a long-term home for the bank.
How much could the banking sector be asked to pay?
The UK banking sector already faces a 28% corporation tax rate and a separate balance-sheet levy. The Trades Union Congress has claimed that reversing the previous Conservative government’s cut to the bank surcharge could raise £9bn over four years.
Key Facts
- Jamie Dimon spoke on the Master Investor Podcast with Wilfred Frost in an interview recorded last week and released on Tuesday.
- JP Morgan agreed last year to build a 279,000 sq metre (3m sq ft) tower in Canary Wharf.
- The tower would serve as JP Morgan’s UK headquarters and house more than half of its 23,000 UK workforce.
- UK banks pay a 28% corporation tax rate, above the standard 25%, plus a separate levy on their UK balance sheets.
- The Trades Union Congress says £9bn could be raised over four years by reversing the cut to the bank surcharge.
