JP MORGAN BOSS WARNS BURNHAM GOVERNMENT OVER BANK TAXES

Jamie Dimon, chief executive of JP Morgan, has warned the new UK government against raising taxes on the banking sector, stating that higher taxation drives firms out of Britain. Dimon reiterated threats to reconsider the bank's London headquarters and said he hoped London would remain JP Morgan's European base for a "long period of time", but declined to make a firm commitment to the future of a planned tower in Canary Wharf. His comments were directed at Prime Minister Andy Burnham, who took office on Monday, and came as the government considers its tax policy following the departure of former Chancellor Rachel Reeves from Cabinet.

Dimon told the Master Investor podcast that an "uncompetitive tax system" causes capital to leave countries and urged the government to maintain a "competitive tax system that's consistent and conducive to capital formation". One option reportedly available to Burnham is to raise the bank levy or corporation tax surcharge on financial institutions, measures Dimon characterised as negative for investment. Tower Hamlets council, the Greater London Authority and the government signed a non-legally binding Memorandum of Understanding with JP Morgan in March signalling the planned £10bn tower would be exempt from business rates, though reports indicate the document was only finalised last month, leaving Burnham's government to decide whether to proceed to a legally binding agreement.

The decision represents an early test for Burnham's administration and the incoming Chancellor on their willingness to encourage international investment whilst managing fiscal pressures. Dimon's intervention adds pressure as the government faces calls from institutions over the UK Bank Levy policy. The tower project's approval will signal to businesses the government's stance on tax incentives for major capital investment.