By Michael Baxter 22 Dec 2009 [0 Comments | 933 views]
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It seems that bankers may not be fleeing these shores after all. No, it’s not the allure of hearing Slade every Christmas, rather it’s the price of property in Switzerland that will keep them here.
While this publication is not in love with banks and their reckless ways that brought this economy into such a mess, we have frequently expressed concerns about the way they are vilified. The City could be an extraordinary asset to UK PLC. Assuming globalisation gets back on course, the world’s major financial centres could become very much richer. The City already accounts for around 12 per cent of our tax revenue, it could bring in an awful lot more. Then there’s the State-owned banks: RBS and Lloyds. These banks could be worth an awful lot of money in a few years, and when they are sold bring to the exchequer enough readies to take the heat off the public deficit.
But this column has expressed concern. Alistair’s bonus tax has been the biggest hammer blow to those who enjoy big earnings since the 1970s. For the last two decades we laughed at the folly of income tax approaching 90 per cent, but now those days have returned we celebrate.
If bankers leave these shores, the result could be a fatal coronary to the City. Nearly Headless Nick Sarkozy may want to punish bankers, so might his lady friend from across the border, but neither France nor Germany have financial districts that can hold a candle to the might of the City.
But here is some good news. Apparently, bankers who are planning to flee London for the picture post cardland of Switzerland are not living in the real world.
“It’s a joke, it’s lobbying,” or so Bloomberg quoted Tim Dawson from brokerage firm Helvea AG. He should know, for Mr Dawson works in Geneva “People are dreaming,” he said “if they think the London investment banking world is going to move. There is more office space in Canary Wharf than in the whole of Switzerland”
He also went on to moan about 40 per cent income tax.
As we said here before, the City advantages are actually quite subtle. There is no God-given reason why the City should be a major financial centre – although its positioning in the time zones helps. The City’s strength lies in the people who live and work in it, and the infrastructure of services that has grown up to support them. It was recently claimed that the variety of restaurants in London is now so great that it is the culinary capital of the world. Things like that matter.
If the City was to lose its key advantages they would not be easily re-won. That’s the danger in a bonus tax. The hope is that the City’s allure is so great that workers will stay in the capital, regardless.
For more on bankers bonuses see Right wing media epiphany, as they agree cleaners are worth more than City bankers and The world follows Darling’s bonus tax lead: but what does this mean for the City? and “Wake up, gentlemen” screams banking hero at the City
