Britain's banking industry escalated its campaign against sector-specific tax increases ahead of the 28 October Budget, after trade body UK Finance wrote to Chancellor of the Exchequer John Healey last month to argue against further levies on lenders. JPMorgan Chase chief executive Jamie Dimon met Prime Minister Andy Burnham and Healey in London on Wednesday, Bloomberg and The Guardian reported. Dimon is understood to have cautioned them that higher taxes could put investment and employment in the UK at risk, The Guardian reported. The lobbying push comes roughly seven weeks before Healey delivers his first Budget as Chancellor.
The lobbying follows calls from the Trades Union Congress and the campaign group Positive Money for higher levies on banks to help cover rising household bills. The TUC has argued for a higher bank surcharge, which was cut from 8 per cent to 3 per cent in April 2023, saying that even restoring the 8 per cent rate would raise £9 billion over four years and that a 16 per cent surcharge would raise £24 billion. Positive Money has separately pressed the new Chancellor to raise taxes on bank profits through its #TaxTheBanks campaign. Healey has refused to rule out raising taxes, while promising to "balance the books", The Telegraph reported.
INDUSTRY MAKES ITS FISCAL CASE
UK Finance chief executive David Postings argued in his letter to the Chancellor that "the debate needs to recognise both the significant tax contribution already made and the wider economic importance of sustainable profitability." Postings also wrote that banking "reaches every part of the economy and every region of the country, providing credit to households and SMEs, supporting investment, and acting as the UK's gateway to global markets". UK lenders pay a 28 per cent rate of tax on profits, including the bank surcharge, against the standard 25 per cent corporation tax rate, as well as a separate levy on their UK balance sheets. UK lenders have warned that a windfall tax would hit Britain's competitiveness, Bloomberg reported in August.
Dimon has a long track record of lobbying against Britain's additional bank taxes. He warned in July that a sector levy would carry adverse consequences, and said in May that the bank could pull its planned investment if the government became "hostile" to banks. Those remarks were made in the context of the bank's planned Canary Wharf development, a planned tower announced in late 2025 and reported at around £3 billion. Dimon spoke with Healey by telephone in August, in a call made at the request of the Chancellor's team, according to City AM.
WHAT REMAINS UNDECIDED
No decision on bank taxation has been announced. Sky News City editor Mark Kleinman wrote earlier this month that Healey was unlikely to resist the clamour for a bank windfall tax. The specific mechanism, whether an increase to the surcharge, a windfall charge on profits, or an adjustment to the bank levy, has not been set out.
Healey will deliver the Budget on 28 October.