JP Morgan slams Healey for bank tax hike that ‘lacks principle’

JP Morgan has criticized the Labour government's decision to raise taxes on the UK banking sector, stating that the move lacks principle. The bank, which serves over 2.5 million UK users, expressed concern over the targeting of the industry, one of the UK's biggest generators of growth and jobs. John Healey, the Chancellor, doubled the UK banking surcharge to six percent to fund an energy support package, expecting it to raise an extra £1.5 billion.

The levy will last for 15 months and the Office for Budget Responsibility (OBR) warned that it could drive £190 million in profit out of the UK, though the overall impact is uncertain. JP Morgan, with around 23,000 employees in the UK, has major hubs in London and Bournemouth. The bank's chief Jamie Dimon had previously warned that the company might reconsider its £3 billion mega tower in Canary Wharf if the government became "hostile" towards banks, as sector-specific taxes have "adverse consequences".

The bank's boss, Citibank's CEO Dame Jane Fraser, had also sounded the alarm on bank taxes, warning that "money votes with its feet". UK Finance, a trade body, believed that increasing bank taxes was not the best way to deliver growth, emphasizing the importance of the time-limited nature of the increase given the existing tax regime that needs to be more internationally competitive.

Analysts at Quilter Cheviot noted that the time limit on the levy increase should be taken with a pinch of salt, given the ongoing geopolitical situation and the need for a material change in the Middle East conflict for the better.