JP Morgan will press ahead with its £3bn new UK HQ in London after John Healey doubled the bank surcharge from 3% to 6%, keeping the Lloyds Barclays post-budget stock movement story focused on bank tax rather than retreat. The decision leaves the tower plan intact for Canary Wharf, where the building is due to house half of JP Morgan’s 23,000 UK staff.
On Wednesday, the bank was still on track to lodge a planning application for the 279,000 sq metres tower in the next few months, despite the higher charge announced in the budget. For investors in UK banks, the immediate read-through is that the tax rise has not yet forced JP Morgan to change its London footprint.
Jamie Dimon and the London HQ
Earlier this year, Jamie Dimon said he could consider scrapping the tower if Britain became hostile to banks. That warning gave the project a political edge, because the HQ was already being watched as a test of how far the bank would go in London after the budget.
The company had been unhappy with Healey’s move to lift the surcharge, but it still intends to push on with the project. The tax change affects the bank’s costs, yet the planned London HQ remains in place rather than being pushed back or cancelled.
Canary Wharf planning next
Half of JP Morgan’s 23,000 UK staff are due to move into the new HQ, so the planning filing is the next practical hurdle. Once the application is lodged, the focus shifts from budget politics to the formal approval process for the Canary Wharf tower.
The surcharge rise from 3% to 6% is the part of the budget that changed the economics, but it did not produce a reversal from JP Morgan. The bank said targeting one of the UK’s most lucrative sectors lacked principle, and that complaint now sits alongside its decision to stay committed to the London HQ.
How much extra tax JP Morgan will face from the surcharge increase has not been stated, but the direction of travel is clear: the project is moving ahead, and the next milestone is the planning application in the next few months.
