Mar 2010:
Fears of a mass exodus by London's bankers to the more favourable tax climate of Switzerland appear to have been exaggerated: fewer Britons applied for permits to work in the Swiss financial services sector last year than in 2008.
Research by Channel 4 News shows that, despite warnings by Boris Johnson, the mayor of London, that 9,000 high-flying City workers would decamp to escape the windfall levy on bonuses and the 50p income tax rate, just 1,079 British citizens were recruited for offshore finance jobs in the Alpine state last year – and about two-thirds of those were applying for IT or other back-office jobs. That represented a 7% decline on the number of Brits applying for a carte de séjour – work permit – in the financial services sector in 2008.
Alistair Darling's announcement of the bonus tax in December's pre-budget report provoked growls of irritation in the City, with many senior bankers threatening to depart for offshore jurisdictions.
Broker Tullett Prebon and hedge fund Bluecrest have announced plans to allow some of their City staff to relocate offshore, but the Swiss data suggests that so far, departures from London have been a trickle rather than a flood.
And since President Obama announced a $90bn (£58bn) levy on Wall Street and new rules to limit the size of banks, it has become increasingly clear that Britain is far from alone in seeking to crack down on financiers.
Gordon Brown will meet fellow European centre-left leaders in London tomorrow to discuss how to ensure that banks and other financial institutions "make a proper contribution to society".
"If you are in a global economy, a national supervisory regime cannot be enough, so you've got to look at the rules under which financial institutions operate globally. One of those rules is that the banks… make a proper contribution to society," said Brown.
The prime minister had initially favoured a tax on financial transactions – dubbed a "Robin Hood tax" by campaigners; but he has cooled on the idea in recent weeks. Treasury officials have instead been working with their American counterparts on a worldwide version of Obama's $90bn "insurance levy", and the PM has suggested the principles could be agreed by G20 countries this summer.
He told Tribune: "Lots of banks have been able to choose to avoid tax, to move to tax and regulatory havens, and now that we are starting to close that down, it is possible then to have a global financial levy which global financial institutions would pay as their contribution towards the risks that they potentially impose on society but also on the earnings that they have."
Such a charge would probably be calculated according to banks' size, instead of being imposed on every City trade.
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