| Keith Boyfield provides an analysis of London’s strengths and weaknesses, and points the way forward for it to retain its positioning as one of the top financial centres. |
Keith Boyfield, had no shortage of examples of the positive advantages London has to offer, however, he countered these by highlighting more ominous signs. ‘Tax issues are where most of the issues lie, especially with the non-doms situation where there appears to be a tremendous amount of confusion. Many people are highly critical of the lack of consultation of the Treasury, Inland Revenue and Customs and Excise,’ he said. Corporation tax rates is another issue, with some arguing that the UK corporation tax rate is not competitive, ‘and increasingly because directors have got fiduciary duties to observe so they are looking to Ireland, Switzerland and elsewhere to see if it makes sense for their companies to move’.  | | Boyfield: UK Govt influenced by middle class resentment of non doms |
He identified lack of business awareness in Whitehall, where Treasury policymaking was most likely to be dominated by “bright young econometricians in their 30s from Oxford or Cambridge”, rather than individuals with a practical appreciation of the real economy.
Regulation was another potentially problematic issue: ‘A recent report by the Better Regulation Taxforce highlighted that compliance costs in the UK are something between 10-12 per cent of GDP.’
The fact that the UK Government is currently ‘in crisis’, said Boyfield, does not help matters. ‘The Government has a number of problems about how it can fund its public expenditure programme, difficulties about raising tax, banks moving out of London and shedding staff and the key issue of immigration and hiring the right calibre of staff,’ he said.
He offered a number of solutions to ensure London retains its position including: elect a new government, tackle infrastructure problems, combat crime, improve educational services, reduce wasteful public expenditure, slash red tape and rethink
tax policies.
‘London may begin to haemorrhage substantial business to lower cost rivals such as Dublin, Zurich, Bahamas and even Manchester. UK companies are moving to Ireland and other companies are considering moves, including WPP, Old Mutual and W H Smith.’
‘There is a danger that nothing will happen until Whitehall sees striking evidence of decline and by then it might be too late.’ |
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| Article appeared in the August 2008 issue.
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