Written by Paul Beasley, director of biz4Biz and managing director of RHG Financial Services.
After 7 years of banker bashing it appears the worm is starting to turn.
Last week, HSBC announced a strategic review of operations and floated the idea that it might return to its original home, Hong Kong. In what was a very reserved statement, it has made clear its distaste for state interference and ever increasing levies. HSBC took not a penny of taxpayer’s money yet will pay $1.5 billion in levies this year alone.
In 2014 the UK financial services industry created £126.9bn in gross value added, or 8% of the total. London is the financial capital of the world, contributing hugely to job creation, tax and national insurance receipts. Banking shares will be owned by the pension funds we all rely on in retirement so we all have an interest in their wellbeing.
This may well be sabre rattling, but it may equally be the start of a backlash by the banks that have had enough of politicians using the banking levy to finance their ever extravagant promises. And we are hardly in a position to try and second guess.
We have debt of £1.5 trillion and it is still growing. Yet we are in danger of killing one of our golden egg laying geese. Anyone who criticises bankers’ bonuses is financially illiterate. Employees will pay 45% tax on such bonuses, banks that withhold it pay just 20% corporation tax. Politicians know this of course but continue to play the politics of envy.
Don’t get me wrong, the banks have a lot to answer for and were in need of radical overhaul, but once again the politicians are taking it to extremes riding on a wave of public prejudice.
Envy and vengeance should have no place in modern politics. We live in a global economy and need to be very careful as to the signals we send out to business. It is time to move on and work positively with the banks to maximise their contribution to UK PLC. Whichever party is in power when you read this will need to take HSBC’s cogitating seriously.