The head of Citi, Dame Jane Fraser, has issued a warning to the UK government, stating that "money votes with its feet" and that "very viable" alternatives to London exist if the banking sector faces increased taxes. Fraser, who is credited with turning around the third largest bank in the US, expressed concern regarding another potential charge on banks in Britain.
She highlighted that maintaining a base in the UK has become more challenging to justify due to the significant charges placed on the sector, which she noted are higher compared to countries such as Germany, France, and the US. Fraser pointed out that London's tax rate is around 48%, while New York's is 27% and Dublin's is approximately 28-29%. Even Frankfurt and Paris have lower rates, making London a tougher decision as it is already one of the most expensive financial centres globally.
These comments follow similar warnings from other banking executives. Both Barclays and JP Morgan have previously cautioned the government against introducing further levies on banks. Jamie Dimon of JP Morgan reportedly threatened to abandon the American bank’s planned Canary Wharf headquarters if UK tax rates became more punitive.
Fraser also voiced concerns about the government's failure to rule out a potential tax on wealth and remarks from current ministers advocating for capital gains tax to be aligned with income tax. She referenced the high tax rate under the Labour government in the 1970s as a "disaster for the country," arguing that it hinders growth and business development.