Scanning the papers this week, I was left feeling rather apprehensive by remarks made by Anthony Browne, chief executive of The British Bankers’ Association. He suggested that senior industry figures were extremely concerned that the government was ‘raiding banks’ balance sheets through the levy’ and that Britain was reaching a tipping point.
Mr Brown suggested that banks had quietly been moving business and jobs away from London in response to the increasing burden of tax and regulation. He said: ‘Every day I speak to banks from across the globe who have invested in the UK. They tell me that they are moving business and jobs back home or to other rival financial centres. They give me frighteningly detailed analyses of why the UK is no longer an attractive place to do banking. What was a trickle is, I fear, turning into a flood.’
This is extremely worrying to say the least.
On top of this, there are fears that HSBC and JP Morgan could make their new home in Luxembourg as both are reported to be in discussions to relocate parts of their business to the tax haven. While this is more about weighing up the tougher rules for conducting business outside of the eurozone, plus the possibility of a British exit from the European Union, it is yet another reason for large financial institutions to look at the business case of upping sticks and moving their offices out of the UK.
We really do not need the likelihood of a mass exodus of the banking industry from these shores. While we can do little about the outcome of a European referendum, we can do something to make it more attractive for these institutions to operate out of the UK. Banks remain extremely important to the economic well-being of this country. The government should therefore accept that perhaps banking policy may have gone too far and could hurt banks’ international competitiveness.
They should look to carry out a review before it is too late.
