With increased tax rates and banking on the floor, the press has been full of articles about high profile business leaders leaving London. Cities such as Geneva are competing for high net worth immigrants with a less punative tax regime and fewer regulations.
Politicians need to think carefully about potentially shooting themselves in the foot by taxing businesses out of the country. They came here to make money in a sympathetic environment and are certainly not tied to our shores.
Having said this, in the longer term we suspect London will continue to be Europe’s pre-eminent commercial center because of its unique offering of culture, history, cuisine, (ever improving) legal system, time zone, education, and language.
While super league business leaders may seek personal shelter in foreign climes, most of their employees on more modest salaries will be disinclined to relocate abroad.
London is also likely to be helped by a steep decline in office space costs. Prime office rents in the West End, for example, have almost halved in the last year and eye watering incentives (such as “rent free periods”) are being negotiated by savvy tenants in the City and Canary Wharf, who are prepared to sign up on leases.
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