Spencer: ICAP will leave if Labour regains power

INTERDEALER broker ICAP has warned it may move its domicile from the UK to a more competitive tax jurisdiction if the Labour party wins the 2010 general election.<br /><br />Chief executive Michael Spencer, who is also treasurer of the Conservative party, said the prospect of higher taxation could push the trading giant to find an offshore home. He added that &ldquo;a hell of a lot of high producers&rdquo; would leave if Labour won a fourth term, although he would not specify if he&nbsp; would relocate as a high-earning individual.<br /><br />Spencer said: &ldquo;If the Conservatives are not elected and if Labour continue to increase taxes as they probably will then regrettably we would presumably have to reconsider moving domicile.&rdquo;<br /><br />He said he was encouraged by Conservative plans to cut corporation tax from 28 per cent to 25 per cent, although he doubted shadow Chancellor George Osborne would be able to immediately roll back the proposed 50 per cent income tax band.<br /><br />A move by ICAP, which employs 4,600 people and carries out transactions worth $2.3 trillion (&pound;1.4 trillion) daily, would be a major blow to the economy.<br /><br />WWP Group, United Business Media and Shire have all recently moved their domiciles to Ireland.<br /><strong><br />MICHAEL SPENCER<br />CEO, ICAP<br /></strong>FREQUENTLY described as a City grandee, Michael Spencer is a man who knows the Square Mile better than most. After making a rumoured &pound;300 trading shares while still a student at Corpus Christi college, Oxford, he went on to land a job at the now-defunct investment bank Drexel Burnham before setting up ICAP in 1986.<br /><br />Spencer is known as a risk-taker: he was twice fired in his early career for trading errors and is said to have blown &pound;10,000 in a night playing backgammon. He won a reputation for throwing some of the best parties in the City in the 1980s, booking acts such as Bananarama to play for his guests.<br /><br />Now blessed with an estimated &pound;1.15bn fortune, Spencer is a close friend of David Cameron and has raised millions of pounds for the Conservatives. He has been treasurer for the party since 2006. He is also chairman of Numis, the stockbroker, and City Index.