The UK’s strong position in the global fund management industry could be hit by government plans to curb immigration as well as higher tax and competition from rival financial centres, top industry executives warned yesterday.
Talented traders could exit Britain – which is home to some £4 trillion in assets, making
it the dominant centre in Europe – while firms could move operations to lower-cost countries with lighter regulation, speakers at a London conference said.
Despite similar warnings previously from the financial industry, there has been no mass migration of top staff to other countries, but the speakers said they feared a drip-drip effect of fund managers and business units slowly heading overseas.
“The traffic lights... are flashing red on tax (and) rhetoric around immigration,” Dick
Saunders, chief executive of funds industry body the Investment Management
Association (IMA), told the Financial Services Authority conference.
“The risk is not that big firms get up and move, leaving empty offices in Canary Wharf. That’s not going to happen. The risk is rather one of attrition, of seepage, that individuals will move and functions will get offshored.”