A Scots-born banker, said to be the most powerful woman on Wall Street, has raised concerns about the prospect of new taxes on British banks.
During a visit to London, Dame Jane Fraser, the chief executive of Citigroup, warned that the UK tax rate on banks is higher than in New York, Dublin, Frankfurt and Paris, which could jeopardise investment.
“Money votes with its feet,” she said, adding that in the US the UK is perceived as a “bit diminished from what it used to be”.
“This is an important country – huge talent, great infrastructure, a strong history of capabilities and reliability. I think the intent from most of the business community vis-à-vis the UK is we want the UK to succeed.”
Dame Jane, who hails from St Andrews, told reporters: “We want to see some of the things that have held the country back getting taken down by the government and the country fulfilling its potential. That is the overwhelming sentiment from the business community.”
Citi employs 14,000 people in the UK and is opening new offices at Canary Wharf in London. Dame Jane took on the top job in March 2021 and since then shares in the bank have almost doubled.
Asked if she was concerned about a new bank tax in the UK under Andy Burnham’s government, she said: “London is such an important centre, a financial centre around the world. The world needs London to work well and to continue to prosper and innovate.
“There aren’t great alternatives. We need stronger alternatives to New York around the world because you need the diversification. But money votes with its feet.”
She said the tax rate for banks was already about 48% in London compared to New York at 27% and Dublin at around 28% to 29%.
“We have to make choices to where things get booked. If the taxes go up even higher, then that makes it an easier decision not to book it in London.”
She said alternative places for Citi to invest included France, Germany, Hong Kong, Singapore and Japan.
“This is a very important centre for Citi. I don’t want to see London diminished.”
Dame Jane joined Citi in 2004 after spending a decade with McKinsey, the consultancy firm, and has now lived in the US for almost 20 years.
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