The Jamie Dimon bank tax warning to Chancellor John Healey has emerged as one of the more direct interventions ahead of the Government’s autumn Budget, with the JP Morgan chief cautioning that higher taxes on banks could drive finance jobs out of the UK. The call between Dimon and Healey took place on Thursday, Bloomberg reports, and was framed as an introductory discussion about JP Morgan’s UK operations, during which Dimon emphasised the need for governments to better support economies, including through tax policy.
According to the Financial Times, Dimon told Healey in the call that higher taxes can result in jobs being driven elsewhere, pointing to a decline in finance roles in New York that he partly blamed on that city’s tax burden. He also warned against a windfall levy on bank profits or broader rises in wealth taxes, the FT reported, citing a person briefed on the conversation.
What is the bank surcharge, and why does it matter?
UK lenders already face a heavier tax burden than most British businesses. According to The Guardian, banks in the UK pay a 28% corporation tax rate, higher than the standard 25% paid by other companies, as well as a separate levy applied to their UK balance sheets. On top of that sits the bank profits surcharge, currently set at 3%, which is the specific mechanism now under debate.
The Trades Union Congress (TUC) is among those calling for the surcharge to be raised from its current 3% to at least 8%, which the TUC says would raise £9 billion for the Treasury over four years. Other campaigners have put forward more ambitious projections: The Guardian reports some estimates that a broader move on bank taxation could raise as much as £19 billion.
Jamie Dimon bank tax warning: what he said
Dimon has made his position on the surcharge clear more than once. Earlier this month, speaking on the Master Investor Podcast, he said he “always thought it was wrong”, adding: “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 prospect of a surcharge increase, 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.” He also warned more broadly that “if you have an uncompetitive tax system, capital leaves your country and… goes to other countries,” pointing to an exodus of companies from London’s stock markets. “I wouldn’t want to see that, if I was running a country,” he said, adding that he wants “to see the UK thrive.”
Healey is reportedly due to hold conversations with other bank executives in the coming days as he prepares for the Budget.
The wider pressure on the Chancellor
Healey will deliver his first Budget as Chancellor on October 28, following his appointment by Prime Minister Andy Burnham. He faces the challenge of finding additional funds to support Burnham’s devolution priorities and increased defence spending, alongside new cost-of-living measures including cutting VAT from energy bills and reducing business rates for pubs.
The National Institute of Economic and Social Research (Niesr) is among the voices warning Healey that the state of the public finances leaves no room for extra borrowing, meaning he will need to either raise taxes or cut spending elsewhere to meet his commitments. Healey has said his plans will be “built on fiscal discipline” and will meet the fiscal rules set by his predecessor Rachel Reeves.
Dimon has previously criticised the UK’s corporation tax surcharge for banks and sounded warnings against raising taxes on the industry. His intervention on Thursday, framed as an introductory call on UK operations, makes the Jamie Dimon bank tax warning one of the clearest signals yet of the pressure Healey faces from the financial sector before the October Budget.
