Jamie Dimon warns UK's Burnham government: new taxes could sink JP Morgan's £10bn London tower

Jamie Dimon, chief executive of JP Morgan, has issued a stark warning over the future of the bank's planned £10 billion tower in Canary Wharf, cautioning Andy Burnham's new government against penalising the banking sector with additional taxes.

Uncertainty Over the Project

Dimon refused to commit to a "binary decision" on the future of the development, stating he hoped London would remain the bank's European home for a "long period of time" and that he was "praying that [Burnham's government] get policy right."

Speaking on the Master Investor podcast with Wilfred Frost, Dimon said:

"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."

He added that governments should implement "a competitive tax system that's consistent and conducive to capital formation" to drive national growth, warning that "if you have an uncompetitive tax system, capital leaves your country."

Dimon also noted that "government after government get [policy] wrong."

Tax Break Under Scrutiny

The warning comes as Burnham faces a critical decision on whether to uphold a major tax break for the bank's flagship London tower or bow to opposition.

In March, Tower Hamlets council, the Greater London Authority, and the government signed a Memorandum of Understanding (MoU) with JP Morgan, signalling that the project would be exempt from business rates. However, reports from City AM revealed the non-legally binding document was only signed last month, leaving Burnham's government to decide whether to make it legally binding.

Early Test for New Chancellor

The decision will pose an early test for the new Chancellor, following Rachel Reeves' removal from Cabinet on Monday. It will also signal to businesses the government's willingness to encourage international investment.

The incoming chancellor will face increasing pressure from financial institutions over the UK Bank Levy. Reeves and the Treasury shielded the sector from rises in the previous Autumn Budget, but banks are now bracing for an increase under Burnham.

Bank Levy and Taxation

Banks currently pay a corporation tax rate of 28 per cent, which includes a three per cent surcharge on top of the standard 25 per cent rate. The levy was first introduced after the financial crisis.

Dimon criticised the levy, stating:

"I always thought it was wrong. JP Morgan did not damage the UK… I just thought it was a lack of principle to punish a company that had nothing to do with the crisis."

Dimon's Broader View

Dimon said he "thought Rachel [Reeves] did a great job" but stressed that the next Chancellor would need "good policies that actually cause growth." He added that he wanted Burnham "to succeed" in government and wants the "UK to thrive."