JP Morgan boss issues bank tax warning to John Healey
The boss of JP Morgan has issued a bank tax warning to John Healey as the Chancellor gears up to deliver his first Budget in October.
Jamie Dimon, who has led Wall Street’s biggest bank since 2006, held a call with Healey on Thursday where the bank chief emphasised “getting public policy right” as crucial to solving economic problems, Morning Wire understands.
The conversation was at the request of Chancellor’s team, a person close to the conversation said, and comes ahead of several other industry peers also speaking with Healey in the coming week.
It following the financial services sector switching into defensive mode ahead of the looming Budget – set for 28 October – as campaigners and left-wing politicians lobby for the industry to face higher taxes.
One activist group has suggested a £19bn windfall tax could be raised from the coffers of Natwest, Lloyds, Barclays and HSBC alone.
As part of their conversation, Dimon told Healey higher taxes can drive jobs elsewhere and pointed to a decline in finance roles in New York, which he blamed on the tax burden, according to the Financial Times.
The Wall Street chief, who commands a pay package of $43m, has become one of the most influential names in finance and was a key voice in lobbying against higher taxes ahead of last year’s Budget.
JP Morgan’s new tower would be pulled if government turns ‘hostile’
A person close to the exchange said taxes came up “in general” but “not specific” to the UK or with any link to the bank’s plans for a new Canary Wharf headquarters.
Morning Wire previously revealed there was a government hold up over the business rates exemption JP Morgan’s new tower was in line for. The legal bureaucracy and change in government had complicated the process for what the firm is hoping will end in a 100 per cent exemption.
Dimon warned in July that a tax on the sector would have “adverse consequences”. He also said in May the company would pull the £3bn investment if the government became “hostile” to banks.
Some economists have warned Andy Burnham’s government will have to raise up to £25bn in the next Budget if it was to meet hefty spending commitments made on defence and social care.
Ruth Gregory, deputy chief economist at Capital Economics, said the next “tax-raising Budget could be almost as big as the last,” where former Chancellor Rachel Reeves made a £26bn tax grab.
Burnham and Healey are yet to suggest a view towards a hike to the three per cent banking surcharge – which sits on top of corporation tax – or a separate windfall tax.
The Treasury said: “The Chancellor meets with senior representatives from sectors across the economy on a regular basis, including the financial services sector.”
JP Morgan declined to comment.
Earlier this month, Dimon’s Wall Street peer Dame Jane Fraser, who heads of up Citigroup, said she was “concerned” regarding a fresh charge on UK banks.
“Money votes with its feet,” Fraser said, as she pointed to the 48 per cent tax rate slapped on the UK, compared to 27 per cent in New York and 28 per cent in Dublin.