JPMorgan Chase bosses signed off on a new £3bn tower in London following a visit to New York by a top adviser to the UK Prime Minister to provide reassurances about the government’s pro-business policies, it has emerged.
The Wall Street bank, which together with Goldman Sachs announced substantial investment plans in the UK just hours after Rachel Reeves was exempted from tax rises in her autumn budget, only signed off plans for its new UK headquarters last Friday.
Keir Starmer’s business envoy Varun Chandra then traveled to New York to meet Jamie Dimon, chairman and chief executive of JPMorgan Chase, according to the Financial Times.
The visit came just days before the Chancellor announced a £26 billion tax rise in the Budget, which avoided imposing higher taxes on banks after fierce lobbying by the banking sector.
According to the FT report, when Chandra went to New York the Treasury had not decided whether to increase taxes on banks.
Reports emerged this week that the Treasury had asked the sector to issue a supporting statement about the Budget.
On Thursday morning, JPMorgan revealed plans to build a 3m square foot tower in Canary Wharf that will serve as its new UK headquarters and home to more than half of its 23,000 UK staff, stressing that the project will depend on a “continued positive business environment in the UK”.
A UK official quoted by the FT said: “If this Budget had been seen as anti-prosperity and anti-financial services then the investment… probably would not have been (announced). Dimon would not have been very positive.”
A source familiar with JPMorgan’s building plans said the investment decision was based on “many factors and no one could know whether banks would be taxed before the Budget”.
Dimon said that “the UK government’s priority of economic growth has been a key factor in helping us make this decision”.
In a release announcing the new tower, Reeves said he was thrilled that JPMorgan had chosen the capital for the development, calling it a “billion-pound vote of confidence in the UK economy”.
The bank has said the project could bring £9.9 billion to the UK economy over the next six years.
After newsletter promotion
Chandra’s visit is understood to be linked to an event at the British Embassy, a birthday celebration in honor of King Charles III, hosted by JP Morgan. It is understood that he did not meet Dimon directly. King Charles was not present.
A source close to JPMorgan said Wednesday that the bank had been working on the announcement for months and that the investment in the new headquarters was a long-term decision rather than related to any individual budget. He said since markets on Wall Street were closed for Thanksgiving, the bank had a quiet period to make announcements.
The Treasury had investigated raising the bank levy in the UK as it considered ways to raise revenue after deciding against increasing income tax rates, but ultimately decided not to do so.
Banks in the UK pay a 28% corporation tax rate, which is higher than the standard 25%, as well as a separate levy on their UK balance sheets.
Goldman Sachs announced it will expand its Birmingham office and hire 500 staff, a move that will more than double its headcount in Britain’s second-largest city.
JPMorgan declined to comment.
<a href