Jump to Main ContentJump to Primary Navigation

Expert View: Britain must stay City-friendly

    As the main political parties begin gearing up for this year’s General Election, we can assume that the credit crunch, bankers’ bonuses and the like will play a central role in the campaign, as indeed these issues have done over the past 12 months.

    Understandably, the lack of judgment and irresponsibility shown by certain parts of the banking community has generated deep anger amongst the public. It will therefore be very tempting for politicians from across the spectrum to put forward policies which seek to capitalise on these concerns to maximum effect. They just need to be careful not to take this too far and so do irreparable damage to our economy.

    According to recent figures, the financial services sector contributes about 8 per cent to our GDP, as well as more than 1 million jobs to our economy. These are significant figures, especially given current economic circumstances. However, there seems to be an underlying view in some quarters that the City needs to be taught a lesson for the financial crisis we have endured. That is a very disturbing line of thinking — whilst increased financial regulation may well be a necessity, to take for granted the City’s status as a leading financial centre would be sheer folly.

    What we should be doing is taking steps to make sure that the UK remains an attractive place for global institutions to do business, such as making a long overdue improvement to our transport infrastructure. Instead of this, with recent changes to the “Non-Dom” rules, the increase in the higher rate of income tax to 50 per cent and the one-off 50 per cent tax on bonus payments above £25,000, we seem to be doing the exact opposite and encouraging them to leave for more “business friendly” locations. And we seem to be having some “success” with this approach — according to recent media reports, foreign staff based here are asking their employers for transfers out of the UK. No doubt, the inward investment agencies of Singapore, Hong Kong, Switzerland and other countries can barely contain their delight at this news.

    The election campaign will inevitably involve a forthright discussion on future economic policy. It is important that it does so but, in the course of that debate, the positive role which the City plays should not be ignored or forgotten.

Expert View

‘Time to change’ our approach to pensions

Ros Altmann

‘Time to change’ our approach to pensions
Expert View

Israeli water tech: A valuable resource

Noah Shani

Israeli water tech: A valuable resource
Expert View

Employers must act now over pensions

Ros Altmann

Employers must act now over pensions
Expert View

New look for retailers’ survival

Stephen Spitz

New look for retailers’ survival
Expert View

We must help our youth source jobs

Zaki Cooper

We must help our youth source jobs
Expert View

New jobs laws ahead

Jonathan Cantor

New jobs laws ahead
Expert View

Industrial manufacturing roots resurface in Bri...

Zaki Cooper

Industrial manufacturing roots resurface in Bri...
Expert View

Social media could affect your firm

Anonymous

Social media could affect your firm
Expert View

Why Cash is not King

Anonymous

Why Cash is not King