http://www.thisislondon.co.uk/standard/article-23793653-boris-johnson-9000-bankers-will-quit-city-over-supertax.do
Lehman Brothers leaving the City
Boris Johnson: Ditch supertax to stop 9,000 bankers leaving City
Pippa Crerar11.01.10
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Boris Johnson threw down the gauntlet to shadow chancellorGeorge Osborne today, urging him to rule out extending the supertax on bonuses.
The Mayor is seeking reassurances thatGordon Brown's tax would not be imposed by a Tory government. The showdown comes after Mr Johnson claimed that up to 9,000 bankers could leave London to escape paying.
Mr Osborne has said he does not oppose the tax, and the Conservatives have not ruled out imposing it again if they win the general election.
Higher-earners in the City will also be hit by the 50p income tax rate and higher national insurance rates, and those with a non-domiciled status face an additional levy.
A senior source in the Mayor's office said: “Boris is determined to highlight to everyone, including George Osborne, that this [bonus] tax is already having an adverse impact and should it become a more permanent feature of our tax system it would have an extremely devastating impact on London's long-term prosperity.
“He wants to make sure that this really is a one-off. He wants to reinforce that message to Osborne — the man who is most likely to be in a position next year to turn it into an ongoing system of taxation. He has received no assurances yet that he won't.”
The City Hall source suggested the shadow chancellor's support for the supertax was electorally motivated. He added: “Boris has to work with the reality that in his city these people could move elsewhere.”
JP Morgan and Goldman Sachs are understood to be among banks considering moving staff and operations abroad after Chancellor Alistair Darling announced the 50 per cent windfall tax on all bonuses over £25,000 this year in the pre-Budget report.
Mr Johnson said: “One bank told my office that 1,600 of its staff had asked for help in relocating from London and another bank told me that it is considering moving 700 to 800 staff from London.” He claimed losing so many highly-skilled staff could cost up to £1.2 billion in lost revenues.
Senior City figures threw their weight behind the Mayor's campaign.
Stuart Fraser, chairman of the City of London Corporation, warned of an exodus and said the supertax had “completely failed” in its intention of trying to force banks to reduce bonuses.
He added: “Sending out a unilateral message that the UK does not welcome high earners will have been music to the ears of rival global financial centres.”
David Buik of BGC Partners said: “London is a massive financial centre in a timezone that can serve both the Far East and New York. But it's not difficult or expensive to transfer people to another location. It's all very well saying these bonuses are disgusting but we've got to get over it if we want the economy to recover.”
Aides to the Mayor denied the banks were over-stating their position. “It is certainly not all bluster,” one said.
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