Jamie Dimon has handed Andy Burnham’s day-old government both a vote of confidence and a warning shot. The JP Morgan chief executive says he wants London to remain the US bank’s home “for a long period of time”, but whether Britain stays attractive as a place to do business rests on the new prime minister and his chancellor reviving growth.
“The new chancellor [is] going to need good policies that actually cause growth. So I’m praying that they get policy right [as] government after government get it wrong,” Dimon, who has run the bank since 2006, said in an interview with The Master Investor Podcast with Wilfred Frost, released on Tuesday.
For the owners of Britain’s small and medium-sized firms, that is the question of the moment put with unusual bluntness. When the boss of America’s largest bank says he is reduced to prayer, smaller businesses waiting on the same policy decisions might be forgiven a similar approach.
Burnham formally succeeded Sir Keir Starmer on Monday, promising a “new political and economic model” for Britain and arguing that MPs had fallen short for decades in creating the conditions for lasting and more equal growth. He enters Downing Street with eight in ten SME owners already braced for impact, so Dimon’s cautious optimism will be read closely on both sides of that divide.
The man charged with answering Dimon’s prayer is John Healey, the surprise pick for No 11 after early favourites Ed Miliband and Shabana Mahmood lost out. Burnham has also promised to set out measures to ease the cost of living as soon as Tuesday, and has hinted at lifting the earnings threshold at which workers first pay income tax, frozen at £12,570 since 2021.
The arithmetic is unforgiving. Burnham has repeatedly committed to the existing fiscal rules, funding day-to-day spending from tax revenues within three years, but economists warn the war in the Middle East may have whittled his fiscal headroom from £23.7 billion to just £10 billion. Every giveaway must be paid for, and the City knows where chancellors tend to look.
Which is why Dimon reserved his sharpest words for the bank levy, the balance sheet tax introduced in the wake of the global financial crisis. “I have always thought it was wrong,” he said. “JP Morgan did not damage the UK … we’re a great citizen there. We hire people there. We want to be bigger there. We train people there. We hire veterans there.”
“It’s still there 17 years later. Is that fair to a shareholder? I mean, it may sound great, ‘tax the banks’, but it’s $5 billion that my shareholders paid on that extra tax. And I just think things like that have adverse consequences.”
Asked whether an increase in the levy would sink the bank’s planned £3 billion UK headquarters, having already threatened to reconsider the Canary Wharf project if Britain turned hostile to banks, Dimon was more measured: “I don’t know what I’d do. I wouldn’t make a binary decision like that.”
That matters well beyond the Square Mile. A £3 billion construction project feeds contractors, fit-out firms, caterers and suppliers across the SME economy, and the tax treatment of Britain’s biggest inward investors sets the tone for everyone weighing whether to commit capital here.
There was warmth, too, for the departed. Rachel Reeves, sacked by Burnham this week after two years at the Treasury, “did a great job”, Dimon said. Investors credited her fiscal prudence with keeping a lid on government borrowing costs.
Her successor inherits the goodwill, the £10 billion of headroom, and one of Wall Street’s most powerful men praying he does not waste either.
