SerpApi.Org
The boss of JP Morgan warned Andy Burnham against launching a tax raid on banks as he urged the new Prime Minister to focus on growth.
Jamie Dimon said there would be “adverse consequences” if Mr Burnham targeted lenders with fresh windfall taxes to help fund his spending plans.
He said: “It would be one more negative on that bucket of things you got to think about.
“I always thought it was wrong. We’re a great citizen [in the UK]. We hire people there. We want to be bigger there. We train people there. We hire veterans there.
“So if a government decides to do it, there’s nothing I can do, but it will over time cause decisions made that they may not like.”
Banks operating in the UK currently face a 3pc annual charge on top of corporation tax. This was brought down from a previous level of 8pc by Rishi Sunak.
But City chiefs are bracing for a potential increase in their tax bill after union bosses called for Mr Burnham to reverse the cut to the so-called bank surcharge to help fund his energy-bills support package.
Mr Dimon has previously threatened to scrap JP Morgan’s plans to build new £3bn headquarters in Canary Wharf if Labour lurched to the Left.
Speaking on The Master Investor Podcast, the bank boss declined to say whether an increase in taxes would put the plans in jeopardy, saying: “I don’t know what I’d do.”
But he added: “I want London to be our happy home for a long time. 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.”
The Trades Union Congress (TUC), which represents the majority of the UK’s organised trade union movement, has urged Mr Burnham to restore the bank surcharge to its previous level of 8pc, arguing that doing so would raise £9bn in four years.
Paul Nowak, the general secretary of the TUC, said last week: “The big banks are making a killing off the back of higher interest rates and mortgage misery across the country. They can well afford to pay more tax.”
However, Lord Jim O’Neill, a former Goldman Sachs chief economist who has been helping Mr Burnham prepare his economic agenda, has poured cold water on the suggestions.
He has suggested that the new Prime Minister should balance the books through lower spending rather than tax rises.
‘I’m praying Labour get policy right’
Mr Dimon said he wanted to see Mr Burnham succeed and the UK thrive. He added that the new Chancellor – named on Monday night as John Healey – would need to implement “policies that actually cause growth”.
The JP Morgan boss said: “Good policies are free and growth is the best antidote. Growth also helps the lowest paid people the most.
“So I’m praying that they get policy right, and government after government get it wrong.”
Mr Dimon pointed to the recent exodus of companies from the London stock market as further evidence of the harm caused by high taxes.
He said: “If you have an uncompetitive tax system, capital leaves your country. And if capital leaves your country, it goes to other countries.
“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.”
Flutter, the gambling group that owns Paddy Power and Betfair, last month became the latest company to say it would abandon its listing on the London Stock Exchange.
CRH, the building materials group, delisted from London earlier this year in favour of a switch to New York. Wise, the £8bn fintech company which was founded in London in 2011, also moved its main listing to the US in May.
Mr Dimon’s comments came after JP Morgan last week reported the highest quarterly profit ever for a US bank thanks to a record performance by its stock traders and a one-off $4.6bn (£3.4bn) boost from its long-held stake in Visa.
But Mr Dimon warned that “several risks are shifting below the surface like tectonic plates”, which could cause “meaningful disruptions when they shift or collide”.
Adding to those remarks on the podcast, he said: “You have wars in Ukraine, terrorism in the Middle East, obviously Iran, great global deficits, remilitarisation in the world, America’s relation with China.
“So there are a lot of things out there which could cause a problem, but again, they might not.”
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