Key facts
- JP Morgan CEO Jamie Dimon warned UK Chancellor John Healey against increasing taxes on bank profits.
- Barclays executives also cautioned that higher taxes could damage investment opportunities.
- Campaigners estimate a windfall tax on banks could raise £19bn for government spending.
- The UK's four largest banks reported £29.2bn in profits in the first half of the year.
- The TUC is advocating for higher bank surcharges, potentially raising billions over four years.
Major British banking executives have issued a warning to the new UK Chancellor, John Healey, against imposing higher taxes on the sector's substantial profits. JP Morgan CEO Jamie Dimon, in a call with Healey, cautioned that increased levies could negatively impact jobs, drawing parallels to job losses in New York attributed to its tax regime. Dimon also noted that higher taxes could jeopardize JP Morgan's significant investment plans in London.
Barclays executives echoed these concerns, with CEO CS Venkatakrishnan stating the bank prefers to use its capital for investment rather than additional taxation. Finance Director Anna Cross emphasized the importance of banks supporting UK growth. Other banking leaders, like Ana Botin of Santander, have questioned why banks should be singled out for increased taxation.
These warnings come amid growing speculation that the government might introduce a windfall tax on banks to fund public services. Campaigners and unions, such as the TUC and Positive Money, are actively calling for such measures, estimating that a windfall tax could generate billions of pounds. The TUC specifically advocates for an increased bank surcharge, projecting significant revenue over the next four years. The UK's four largest lenders collectively reported nearly £30 billion in profits in the first half of the year, with a substantial portion allocated to dividends and share buy-backs.
Dimon has a history of criticizing Britain's existing bank taxes, which include a higher corporation tax rate and a surcharge on balance sheets. He previously suggested that further tax increases could have "adverse consequences." The TUC, however, argues that banks' record profits, dividends, and bonuses demonstrate their capacity to contribute more through fair taxation, which could help alleviate the cost of living crisis.