City lawyers tell me of the new stream of work for London
law firms, working with their Swiss counterparts and the major Swiss banks, to
provide relocation advice to high net worth clients currently
resident in the UK but planning their move to Switzerland. Packages have been designed not just for individual clients but for hedge funds moving their top teams. Nice work – in the
short term – for the lawyers and good news for the Swiss economy – not
such good news for Darling’s plans to use increased tax revenue to cut the
deficit.
Now
that Lord Mandelson has admitted that the 50p tax rate could have adverse
consequences and should be abolished as soon as the economy permits, how about
a pledge to reverse the increase after, say, 12 months? By presenting the tax
hike as a one-off windfall measure, the Government could save face, skim off
some revenue and reassure the City that it does – after all - understand that
high tax deters enterprise and lowers revenue over the long term. Just as the Centre for Policy Studies pointed out last summer in What's wrong with 50p?.