Major British banks have warned the incoming chancellor against introducing higher taxes on the sector, according to Sky News. The warning comes as the new chancellor prepares to set out fiscal policy, with lenders concerned that additional levies could damage the UK’s financial services industry.
Sky News reports that banking executives have delivered a direct message to the new chancellor, urging caution over any tax increases. The Financial Times adds that JPMorgan chief executive Jamie Dimon has also cautioned the UK chancellor against raising bank taxes, echoing similar concerns from industry leaders.
The Telegraph reports that Manchester Mayor Andy Burnham has proposed a bank tax, but critics argue such a move “would drive lenders out of Britain.” Separately, a bank boss linked to former trade minister Peter Mandelson has warned the UK against taxing bonuses, according to thecanary.co. Bloomberg notes that the chancellor faces a “Budget Dilemma” over whether to impose a windfall tax on UK banks.
The warnings highlight a growing tension between the government’s need to raise revenue and the banking sector’s insistence that higher taxes would undermine the UK’s position as a global financial hub. Banks argue that additional levies could push lenders to relocate operations to more favourable jurisdictions, reducing tax income in the long run.
The new chancellor has yet to respond publicly to the industry’s concerns. All eyes will be on the upcoming Budget to see whether the government heeds the banks’ warnings or presses ahead with new taxes on the sector.
