Monday, December 14, 2009

UK tax moves "so far failed to spark banker exodus"

Last week we highlighted a report from September, highlighting how nearly all the financial sector's scaremongering over tax increases had been exposed as bluff. Now we have something more nuanced, but with a similar message, from the FT:

"Dozens of UK hedge funds have already decamped to (EU oversight-free) Geneva, Zurich and other Swiss cantons in recent months following a marketing push that has included presentations in top London hotels. But it has so far failed to spark the mass exodus some “hedgies” predicted.
. . .
Sweeping changes to Britain’s income tax regime have also had a surprisingly muted impact thus far."

So this update suggests, then, that the scaremongering has been exposed again as bluff, following the recent bankers' bonus tax -- and the fact that other nations are expected to follow suit backs up the government's stance. However, the story itself then, strangely, sets about giving plenty of space to the scaremongerers, with the same dire warnings we've always heard.

Britain's financial sector, which is choking the rest of the economy, and (as the financial crisis has finally made clear) stealing British tax revenues needs to shrink severely. A significant exodus is what's needed. What Britain needs to move towards is a normal financial sector.

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