Jamie Dimon, chief executive of JPMorgan Chase, has warned Chancellor John Healey that higher taxes on banks risk driving investment and financial jobs away from Britain as the Government searches for revenue ahead of its October Budget.
Dimon reportedly raised the issue during a phone call with Healey, arguing that heavier taxation could make the UK less competitive and ultimately push companies and workers towards rival financial centres. He cited the decline in finance employment in New York, which he partly attributed to the city’s tax burden, according to the Financial Times.
The intervention puts one of the world’s most powerful bankers directly into the debate over how Healey can close a widening gap in the public finances while funding the Government’s spending ambitions.
Dimon is understood to have warned against both an increase in the existing levy on bank profits and broader tax rises on wealth. His comments echo longstanding criticism of Britain’s bank corporation tax surcharge, which was introduced following the financial crisis and has remained controversial within the industry.
The Trades Union Congress has called for the surcharge to rise from 3 per cent to at least 8 per cent, arguing that such a move could raise £9bn for the Treasury over four years.
Dimon has previously described the surcharge as unfair, arguing that JPMorgan did not cause the financial crisis and should not continue to face what he regards as a punitive tax regime more than a decade later.
“If you have an uncompetitive tax system, capital leaves your country,” he warned earlier this month, adding that governments could ultimately face consequences they did not anticipate.
The stakes for Healey are unusually high. His first Budget, scheduled for October 28, comes as the Government seeks money for greater defence spending, devolution and cost-of-living measures while attempting to maintain its fiscal rules.
The National Institute of Economic and Social Research has warned that the Chancellor has little room for additional borrowing, leaving higher taxes or spending restraint as the principal alternatives.
Healey has pledged that his Budget will be built on “fiscal discipline”.
Dimon’s warning suggests that the price of finding new revenue may be measured not only in pounds raised, but in the jobs and capital Britain risks losing.
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