In London over the New Year, I witnessed first-hand the buzz of the City even in the middle of winter. As with Australia, it’s a country grappling with a flood of people, in this case Eastern Europeans who want to make London home. The open borders of the EU create its own complex challenges of population shifts, but then that’s a high class problem compared to the declining populations of Italy, Spain and some of the Eastern European states.
More people means more food, more housing, more services, more jobs, more… Success begets success in a natural/organic economic model.
So how’s this working for France?
Of the 52 European partners who each pocketed around $10M in bonuses this year as a share of one particularly lucrative private banking business, 48 state they are domiciled in the UK. How can that be when most of them are by birth French nationals and do a fair share of their work in France?
Regardless of what you think of those chunky bonuses, if we look closer it seems to be a case of the French government cutting off its nose to spite its face.
These high net worth individuals previously domiciled in France are instead taking their bonuses as residents of the UK, thereby saving $3M. There they pay 45% tax compared to the French slug of 70%. So with the tax gap, they can buy more UK property and spend, employ and feed the UK economy.
I’m not sure what the business analogy in all this is, but disincentivising performance is surely defying Human Nature 101. Gerard Depardieu pulled up stumps and moved to Russia. In every way, culture, the economy and daily life is reduced when a society’s high flyers bid adieu.
What’s your Point of View?
Geoff Slade has worked at the forefront of the Recruitment industry for 50 years. He is the Executive Chairman of Slade Group and was awarded a Centenary Medal for services to the industry.
