Bankers dismayed at political party levy plans
The Labour Party and the Conservative Party are this morning feeling the wrath of bankers in the UK amid concerns about the potential introduction of a banking tax levy. While the government is looking to introduce a levy which is supported by international markets, the Conservative Party has announced plans to introduce a levy in the UK even if international backing is not forthcoming. So what impact will this have on the UK banking industry?
There is no doubt that a further tax on the UK banking industry has the potential to push more and more businesses overseas where the tax liability is significantly lower than that in the UK. The last two years have been very difficult for UK financial markets but London has held a competitive edge over every other market in the world, bar the US, for some time. However, there is no doubt that the introduction of further taxes will reduce the competitive edge in the UK and we will almost certainly see companies moving to the likes of Frankfurt and Paris.
When you also consider the massive development in communication technology, such as the Internet, etc, a banking operation can literally be based anywhere in the world and still remain competitive in many markets.
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