Taxes put JP Morgan off investing in the UK

July 19, 2010 3:42 PM

This morning, the Telegraph reports that not only are JP Morgan reconsidering a new European headquarters they were planning on setting up in Canary Wharf, but they are also considering moving back office functions that employ hundreds of people in Bournemouth and Glasgow:

"The American bank is understood to be considering the future of units in Bournemouth and Glasgow in a move that could place hundreds of UK jobs at risk.

The news comes after The Sunday Telegraph revealed the company has serious doubts about building a new £1.5bn European headquarters in Canary Wharf because of what it perceives as a lack of support for the financial services in the UK."

More and more stories like this are a price that we pay for the bonus tax, the banking levy and the 50p tax rate.  Not just bankers in the City losing their jobs but workers around the country supporting the financial services sector in one way or another.  There is strong evidence from Eurostat that our taxes are increasingly uncompetitive.  Successful businesses looking at where to invest are increasingly going to have to factor in a risk that the returns on their investment will be confiscated as our politicians try, in vain, to pay for excessive spending.

Organisations like the Regional Development Agencies like to quote dubious statistics about how each pound spent on them yields some small fortune in return.  There are lots of problems with those statistics, but one of them is that they count the jobs created by the spending but not the jobs lost thanks to the taxes paying for them.  It is just like "green jobs" figures that are quoted without taking account of the manufacturing employment driven overseas by the resulting high energy costs (Ed Miliband gave an example of that sophistry today).  Lower taxes and spending deliver faster growth and it is that kind of free market success that will deliver sustainably high employment.

This morning, the Telegraph reports that not only are JP Morgan reconsidering a new European headquarters they were planning on setting up in Canary Wharf, but they are also considering moving back office functions that employ hundreds of people in Bournemouth and Glasgow:

"The American bank is understood to be considering the future of units in Bournemouth and Glasgow in a move that could place hundreds of UK jobs at risk.

The news comes after The Sunday Telegraph revealed the company has serious doubts about building a new £1.5bn European headquarters in Canary Wharf because of what it perceives as a lack of support for the financial services in the UK."

More and more stories like this are a price that we pay for the bonus tax, the banking levy and the 50p tax rate.  Not just bankers in the City losing their jobs but workers around the country supporting the financial services sector in one way or another.  There is strong evidence from Eurostat that our taxes are increasingly uncompetitive.  Successful businesses looking at where to invest are increasingly going to have to factor in a risk that the returns on their investment will be confiscated as our politicians try, in vain, to pay for excessive spending.

Organisations like the Regional Development Agencies like to quote dubious statistics about how each pound spent on them yields some small fortune in return.  There are lots of problems with those statistics, but one of them is that they count the jobs created by the spending but not the jobs lost thanks to the taxes paying for them.  It is just like "green jobs" figures that are quoted without taking account of the manufacturing employment driven overseas by the resulting high energy costs (Ed Miliband gave an example of that sophistry today).  Lower taxes and spending deliver faster growth and it is that kind of free market success that will deliver sustainably high employment.

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