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Business FX Blog

Adam Solomon is a specialist in business foreign exchange issues at foreign exchange brokers TORfx.

The idea of this column is to assist businesses in saving money on making or receiving payments in foreign currency. It is developed with all companies in mind from public companies with large and complex operations, to smaller companies and individuals.

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Home Economic Fundamentals UK Economic Capital Spreads: Exodus from London could happen

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Capital Spreads: Exodus from London could happen PDF Print E-mail
UK Economic
Written by Will Peters   
Monday, 18 January 2010 09:54
Simon Denham, Head of Capital Spreads, says that an exodus of financial services providers could indeed happen:
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Simon Denham, the head at one of the UKs leading spread betting providers, Capital Spreads, warns that superior human capital and a willing attitude in Singapore and Australia could yet see an exodus of financial services out of the City of London:

"Back from a trip to Singapore where the glee in the voices of those we went to meet was hard to miss. The first topic of conversation was invariably the flow of business that they were seeing from the UK and US as more and more activity flees the arbitrary taxation policies of the incumbent administrations.

Hard for us to stomach but there are places outside of Europe where the rule of law and political stability is even more solid than it is here. Singapore’s laws, as are Australia’s, are based on Anglo Saxon principals (and are far more inviolate to the whims of populist politicians).  

Not only this, but the education system is, far, far in excess of anything (outside the private sector) that we can offer. More and more brokers and investment funds are electing to operate outside of the UK and, at some point, if the level of abuse and punitive taxation is not reduced this will reach a tipping point of self fulfilment. Ignorant people will cry ‘good riddance to bad rubbish’ unmindful of the vast and crucial invisible earnings income that the City brings to the UK.

The fact that a few people earn huge sums should be immaterial as they would at least be earning it here, for companies based here … therefore paying both corporate and personal taxes into the UK Treasury.

But politicians rarely look beyond the next sound-byte or election (witness the appalling state of the UK’s power structure where the inability of the last two governments in taking the unpopular energy decisions has led to an almost crisis situation…. And yes this includes the Tory administration prior to Teflon Tony)

Ah well… once it is lost beyond recall the errors of the last few years will be rued."

Denham's insight comes as the Government faces a new offensive against its bonus tax after several frustrated figures at leading brokerages said that they were still unclear whether they would be hit, more than a month after the Chancellor unveiled the tax.

At least one is considering toughing it out with HM Revenue & Customs by not paying the tax, the Times reports.


Last Updated ( Monday, 18 January 2010 09:59 )