FT.com / UK / Politics & policy - ‘What banker wants to be in the UK?’.
The FT notes:
Bankers were fuming. One investment banking chief said the “contract between government and business is broken”, and warned that up to 40 per cent of the City’s activities were “mobile” and would move overseas to more welcoming jurisdictions, such as Switzerland and the US.
“I can’t tell you how many people have called me from London asking to move,” a senior Wall Street banker said. “The question all the banks have now is: who the hell wants to be in the UK? Some businesses will definitely leave.”
That's the good news. The result will be less pressure on house prices, less pressure for greater wage differentials, less pressure on London infrastructure, less dependence on finance: all good news.
Here's the bad news: not many of them will leave. The reality is that to make money banks need to be near banks. That way they create a critical mass of staff who know and trust each other, not only in the bank but between banks. Leave the cluster and profits will fall. You'll save tax but you'll make less.
That's why this threat is hollow. The bottom line counts and London is the bottom line. Everything else these people say is straightforward bribery.
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As someone who left the UK many years ago (not for tax reasons) and who knows many other expatriates, I know that it is a big upheaval to move countries. The idea that thousands of bankers and their families are going to suddenly all move because of this tax seems a nonsense to me, and moving the business itself even more so (for the reasons you mention among others). Whenever people make comments like this (ie the banks will leave), I wish the government would say “that’s rubbish and you know it”.
The US health care system is one very good reason not to live there.
Even if you have medical cover through your employer, you can still end up with some large medical bills.
Even more to the point Richard, if they stay in London they’ll be in the cluster with their pals in the tax avoidance industry. So as you and J say, all this talk of a mass exodus is rubbish. And what’s this about a ‘contract between business and government?’ How about a recognition from these people of a contract between society and business? Oh sorry, no, I forgot, there’s no such thing as society for the bankers until they nedd bailing out as aresult of their mistakes.