Key facts
- Former Chancellor Jeremy Hunt warned that raising bank taxes could reduce UK growth and jobs.
- JP Morgan CEO Jamie Dimon cautioned Chancellor John Healey against increasing bank taxes.
- Dimon stated higher taxes could risk UK investment and employment.
- Healey is reportedly considering a windfall tax on banks and oil companies in his October 28 budget.
- UK banks pay a 28% corporation tax rate plus a surcharge on their balance sheets.
- The UK's four largest lenders generated £200 billion in pre-tax profits over the past five years.
Former Chancellor Jeremy Hunt has issued a warning to the Labour government, stating that increasing taxes on banks could negatively impact economic growth and employment.
Chancellor John Healey is reportedly considering a windfall tax on banks and oil companies as part of his budget scheduled for October 28. Jamie Dimon, the chief executive of JP Morgan, met with Healey and Andy Burnham to express concerns that higher taxes on financial institutions could jeopardize investment and employment in the UK.
Dimon has a history of opposing Britain's additional bank taxes, which were introduced following the government's bailouts of major UK lenders in the 2008 financial crisis. UK banks currently face a 28% corporation tax rate, which is higher than the standard rate, along with a separate surcharge on their UK balance sheets.
In August, Dimon reportedly told Healey that increased levies could affect jobs, citing a decline in finance roles in New York that he attributed to the city's tax policies. Dimon had previously considered building a substantial new headquarters in London, but indicated that a "continuing positive business environment in the UK" was a prerequisite. He also suggested in May that these plans could be scrapped if a Labour prime minister hostile to banks took office.
Campaign groups like the TUC and Positive Money have advocated for higher bank levies to help address the cost of living crisis. The UK's four largest banks—HSBC, NatWest, Barclays, and Lloyds Banking Group—have collectively generated £200 billion in pre-tax profits over the last five years, largely due to rising interest rates. According to a report commissioned by UK Finance, these banks paid an estimated £43.3 billion in taxes for the financial year ending March 2025.