Wednesday 05 August 2026 1:14 pm

Fraser said there plenty of alternatives if Healey launched a raid on banks

The boss of Citi has warned the government that “money votes with its feet” and there are “very viable” alternatives to London should Andy Burnham decide to hit the banking sector with higher taxes.Dame Jane Fraser, a Scot credited with turning around the third largest bank in the US, said she was “concerned” at another charge on banks in Britain. Maintaining its base in the UK had become more difficult to justify due to the outsized charges levelled on the sector compared with countries like Germany, France and the US, she said.“Money votes with its feet,” Fraser told reporters. “And when you have a tax rate in London which is up around to the 48 per cent level and you’re competing with New York at 27 per cent, or Dublin at about 28, 29 per cent. Even Frankfurt and Paris are lower.“It makes it a tougher decision. It’s already one of the most expensive centers in the world.”The comments add to a growing chorus of concern from banking bosses after a booming earnings season in which equity trading and investment banking income was pushed to record highs by the turmoil shaking global markets.Banking tax fears grow after blowout earningsBoth Barclays and JP Morgan have already warned the government against another levy on banks. Jamie Dimon threatened to ditch the American bank’s planned Canary Wharf headquarters if tax rates in the UK became more punitive.“There are very viable alternatives,” Fraser said. “And the UK’s important. It’s got talent, it’s got infrastructure, it’s got pretty sensible regulatory capabilities and the like. But that difference – and I hate to be Scottish – but it gets overcome pretty quickly.She added that she was worried by the government’s failure to rule out a potential tax on wealth and comments from now government ministers who have called for capital gains tax to be equalised with income tax.“You can’t afford everything. You can’t have your cake, eat it, and not put on calories,” she said in response to questions from City AM. “I think some of the pieces we’ve just got to look at [are] how do you re-energize the country around incentivising people for working, making it attractive to do so.She referred to the high tax rate under the Labour government in the 1970s as a “disaster for the country”.“You don’t grow and you don’t build businesses. So I think there’s a balance,” she said.More to follow…