Thursday 28 October 2010

So, will Barclays carry out its threat to leave UK? (Or the "exodus" that never quite happens)

City AM reports that Barclays weighs up costs of quitting UK

Time is running out to halt exodus
"The ball is in George Osborne’s court; he needs to drop his anti-City rhetoric and taxes before it is too late", opines editor Allister Heath, though he does balance the reporting and commentary by pointing to the many "barriers to exiting" which make it unlikely to happen.

The story may be widely reported - as threats to go often are.

But you might have missed the reports of these threats being carried out?

It it time that analysts quoted in these "exodus" stories and media outlets reporting them offer a full disclosure of what (with hindsight) they now think of any earlier predictions they have made in the last two years?

Previously on 'Should I stay or should I go'?

'Accountants warn of 50p tax exodus' FT 19.9.09

'Tax rise may spark entrepreneurial exodus' FT 5.12.09

...but will they really all leave? Telegraph 20.11.09

Threatening to leave Britain and actually going - leaving behind friends and family, selling homes, uprooting children - are two very different things ... Surrendering one's residence in Britain really does mean leaving these shores. The Revenue has cracked down on those claiming technical non-residency, examining the overall nature of their links with Britain. You may stay away for all but 90 days a year but that may not be enough if your wife and children are still living in the UK.

(Depending on what you think of them, of course).

'Banking exodus fears over 50p tax exodus overdone', FT 17.5.10

"Senior bankers in London are still typically earning twice as much after tax as those in Geneva and Zurich"

UK levy not taxing for banks, 23 June 2010

Banking sector “can count itself lucky” at modest bank levy of £2.5 billion, reports Wall Street Journal.
Bank shares rose on news of a smaller levy than anticipated. The UK levy is 0.04% compared to 0.15% in the US. One analyst says any tax under £5 billion will be considered a "rounding error".

Banker exodus fails to hit City, FT 15.10.10

"From practical concerns over infrastructure and regulation to quality of life issues, executives are proving “stickier” than many feared"

Last year, Tullett became one of the first organisations publicly to offer to help relocate teams of staff looking to move out of the UK, largely to fend off poaching raids by non-UK firms. While that offer remains open, this week it emerged that it has yet to be taken up by a single team.


Another bonus tax or some other levy on pay could prompt a much bigger number of defections. But for now, the fears of an exodus of bankers have yet to materialise.

Comprehensive spending review

Chancellor George Osborne says his aim is "to extract the maximum sustainable tax revenues from financial services".But he has heeded the exit threats. The Guardian reports that analysts believe he is now likely to reduce the levy from 0.04% so it does not raise more than £2.5 billion.

Because of Treasury miscalculations and back-of-the-envelope policymaking at the party conference, Osborne (who thought he was raising £1 billion rather than £2.5 billion) has somewhat accidentally now proposed to raise more in cuts to child benefit than from the bank levy.

Osborne will no doubt be talking tough again during the bonus round. How can he not, given what he has said in the past?

When it comes to the Government and the banks, surely the public are entitled to ask why the Government talk tough and make promises, but then fail to deliver. As we wait to see bonus payments over the coming months, we will remember the Prime Minister's promise that the era of the big bonus is over.
- George Osborne to the House of Commons, 26th November 2009

But his bark is so much worse than his bite.

And so it looks like the banking lobby's assertive advocacy may (just) have been effective enough to keep them here after all.

For now ...

1 comment:

Richard T said...

As someone who has mistrusted Barclays since the 1960's, this is hardly surprising. Then it was their links with propping up apartheid in South Africa; since that time, whenever there has been a move by the banks to screw the public by worsening service or charging extra, almost inevitably Barclays have been behind it.

So let the bastards go. The only trouble is that this government won't find a away to cause ruin on thier shareholders through spite and patriotism. Hell roast them!