The economic consequences of Brexit (Vol 2)

[kurt535]

jsf said:

CaptainSlow said:

kurt535 said:

What iceberg? Oh dear oh dear.....Capt, no idea of your day job but good luck defending our biggest form of annual tax receipt hitting the ejector button....

2,000 jobs? You'd piss your pants before the ship left the harbour.

In 2013, the CBI employer’s group stated that around 132,000 jobs had been lost in finance and insurance since the downturn began in 2008.

The EU bonus cap for bankers isn't going to be popular for the smaller banks employees, the UK currently allows these banks to be exempt from the cap much to the disgust of the EU.

Good luck getting those guys to move to the continent. You could quite easily see the larger banks in the UK ditching the EU caps and going back to the previous model to attract the star performers back from Hong Kong and New York, which is where they went when the EU introduced the cap on bonuses.

'The introduction of the so-called ‘bonus cap' – the limitation of the ratio between the variable and the fixed components of remuneration to 100% (200% with shareholders' approval) which is applicable since 2014 – had an impact on remuneration practices; EU banking institutions shifted the remuneration for their identified staff towards the fixed component' - source eba europa

so, no job in the uk or fixed highly paid job in europe...hmmmmmmmmm

[Murph7355]

Pan Pan Pan said:

With the UK paying more into EU coffers than 26 other member states combined, the Germans are more worried about how much their taxpayers are going to have to find from their own funds to keep the EU wet dream alive once the UK walks out of the door.

Are you sure about that factoid?

[CaptainSlow]

Murph7355 said:

Pan Pan Pan said:

With the UK paying more into EU coffers than 26 other member states combined, the Germans are more worried about how much their taxpayers are going to have to find from their own funds to keep the EU wet dream alive once the UK walks out of the door.

Are you sure about that factoid?

If he's talking about net contributions, which would be the only logical thing to do, The UK pays in more than the other 27 combined.

[Burwood]

I think he might want to check that factoid . I can see the steam rising of that heap.

[stongle]

kurt535 said:

CoL is, right now, the equivalent of previous coal, steel, ship building tax generators. We need it.

My buddy has just left an emergency meeting at his broking firm with the clear mandate they can't wait to find out what deal May might do and look Frankfurt bound before August. No, a team of 15 relocating won't make the news but each guy eats easily makes 6 figures a year - whole lot of tax we are losing just in their one team. Multiply it up across similar teams in similar meetings and we simply do not have a replacement for the lost tax revenues.

That's a very unusual approach, not saying it doesn't happen but the normal approach is to bin the jobs in London and hire locally- cheaper. Rarely do people move with the roles, it's the allocation of headcount. The trend I've seen in the European firms is to keep the high value products and rainmakers in London and the basic stuff in Europe. Keeps the big boys happy and you pick up lower paid (but pain in the bum for workers rights) locally.

The bigger tax hit, announced yesterday is that Deutsche is stopping 90% of front office bonuses and the 10% whom get them are deferred. Not Brexit though, so not reported.

At least they won't have problems getting building space with Commerzbank pulling out of most IB products.

20,000 moves would be a realistic assessment, but for each revenue producer there could be 10-20 support staff (so the tax drop is minimal. These are all legacy roles? With changes in anglicised banking, stronger banks and ability to secondary market make new jobs will be created here.

[kurt535]

stongle said:

kurt535 said:

CoL is, right now, the equivalent of previous coal, steel, ship building tax generators. We need it.

My buddy has just left an emergency meeting at his broking firm with the clear mandate they can't wait to find out what deal May might do and look Frankfurt bound before August. No, a team of 15 relocating won't make the news but each guy eats easily makes 6 figures a year - whole lot of tax we are losing just in their one team. Multiply it up across similar teams in similar meetings and we simply do not have a replacement for the lost tax revenues.

That's a very unusual approach, not saying it doesn't happen but the normal approach is to bin the jobs in London and hire locally- cheaper. Rarely do people move with the roles, it's the allocation of headcount. The trend I've seen in the European firms is to keep the high value products and rainmakers in London and the basic stuff in Europe. Keeps the big boys happy and you pick up lower paid (but pain in the bum for workers rights) locally.

The bigger tax hit, announced yesterday is that Deutsche is stopping 90% of front office bonuses and the 10% whom get them are deferred. Not Brexit though, so not reported.

At least they won't have problems getting building space with Commerzbank pulling out of most IB products.

20,000 moves would be a realistic assessment, but for each revenue producer there could be 10-20 support staff (so the tax drop is minimal. These are all legacy roles? With changes in anglicised banking, stronger banks and ability to secondary market make new jobs will be created here.

brokers have the relationship with the client so hiring locals to take over accounts doesn't work, especially when the desk has been built up by the team over several years.

deustche worries and bonus cuts are well known this week.

[Burwood]

Brokers? Are we back in 1987? What's a broker when at the 'bank'

[///ajd]

ITV just said Goldman Sachs moving 50% = 3000?

Can we really sweep this under the carpet and pretend it doesn't matter?

[don'tbesilly]

///ajd said:

ITV just said Goldman Sachs moving 50% = 3000?

Can we really sweep this under the carpet and pretend it doesn't matter?

Hit the rewind button,GS are reportedly cutting their workforce by 50%, with the possibility of 1000 moving to Frankfurt.

[Trabi601]

///ajd said:

ITV just said Goldman Sachs moving 50% = 3000?

Can we really sweep this under the carpet and pretend it doesn't matter?

Of course we can - because we've created loadsajobs since the vote. They're a majority 'living wage' part time jobs, but it seems quantity rather than quality is the name of the game.

[B'stard Child]

///ajd said:

ITV just said Goldman Sachs moving 50% = 3000?

Can we really sweep this under the carpet and pretend it doesn't matter?

#reasontoleave58 - Remain campaign funded by Goldman Sachs International providing £500,000

#reasontoleave59 - Michael Sherwood personally endorsed remain

Same Michael Sherwood

https://www.theguardian.com/business/2016/nov/21/m...

I guess they feel they've pissed enough money down the drain

[davepoth]

///ajd said:

ITV just said Goldman Sachs moving 50% = 3000?

Can we really sweep this under the carpet and pretend it doesn't matter?

ITV are wrong then.

https://www.bloomberg.com/news/articles/2017-01-18...

There is a lot of uncertainty. Less than there was last week, but still a lot of uncertainty. What these banks are doing is hedging, as any sensible company is doing right now.

They know that if it is a bad settlement and they've not moved anything that they'll really struggle to find decent staff who will move to Warsaw at short notice (I'm sure it's lovely, but still...), so it makes sense to start moving some things now to make any potential move later less of a struggle, even if they aren't really sure what's going on. If everything comes up roses they'll just move back.

[Carl_Manchester]

sweep it under the carpet? no

is it material? no.

banks have good PR and lobby groups so expect more media coverage over 2000 people moving than the collapse of middle class for the remaining 64 million.

[pim]

Whichever way you look at it we certainly are moving in unchartered waters.

Maybe exciting for some but if jobs go down the pan it hurts.Boris is in India we live in hope.

[anonymous-user]

The reality seems to be that there isn't such a thing as a pro-Leaver who wants to hear anything that might be regarded as "bad news". Anything like that is brushed aside as untrue, improbable, immaterial, insignificant, unrelated or (if all else fails) traitorous.

I'm all for making the best of things, but avoiding the bits of everyday reality around you because you just don't like the look or sound of them does no one any favours.

Maybe from here we move seamlessly to a position of greater strength. Maybe we fall into a fallow patch for a generation. Maybe something else entirely will happen. Everyone knows what we all want but there is precious little certainty at the moment, but like it or not some employers are starting to make decisions.

[anonymous-user]

don4l said:

cookie118 said:

Just the start of it? Or a small blip.
HSBC and UBS have suggested they will move 1000 jobs each away from London.

http://uk.mobile.reuters.com/article/UKNews1/idUKK...

Why do you post this negative nonsense?

Unemployment has fallen by more than 50,000 since we voted to Leave. This is despite the fact that the Remainers told us that a vote to Leave would create 500,000 job losses before we had left.

HSBC are saying that they might move 1000 jobs to Paris. They won't. Income tax for high earners in Paris is 75%. They won't get anyone to move.

Tell me, why are you so desperate to talk your country down?

In part because otherwise it'd be an echo chamber in here.

Also:
1) The jobless figure was falling before the vote, who's to say it wouldn't have kept on falling with a remain vote?
2) The timing of the announcements are very significant. We have had very good news with Nissan etc but that was all done while there was the possibility that we would remain in the single market. May commits to taking us out and the next day two major banks signal their intent to move some operations overseas. That is not insignificant.
3) Unless I'm not looking hard enough I've seen now major investments or company moves to the UK because of Brexit yet, but some companies saying Brexit is the reason to move away.

I'm not desperate to talk my country down-just want to be realistic about the future and what will happen. The worst thing for the UK to do is to sleepwalk through the two years thinking everything is fine and then getting a nasty shock at the end!

[Trabi601]

My biggest concern is that, in an effort to take advantage of the exchange rate taking a nose dive and a scramble to make the best of it - any job creation and growth will be at the expense of the working person.

It's all very well saying the exchange rate helps exports - but we still have to compete with sweat shops and low labour rates - there's absolutely no point in creating loads of minimum wage, part time and unsecure jobs which require government payouts to top up to a proper living standard, especially if it comes at the expense of quality, secure and well paid roles.

We seem to be very good at making full time and decently paid roles redundant (coal, steel, driver only trains, to name a few) - to replace them with low paid and low hour service jobs.

[davepoth]

Greg66 said:

like it or not some employers are starting to make decisions.

Net economic impact of this so far?

5,000 workers, let's say they're on £100,000 a year average. They each pay £35,000 in tax and NI, and the company will pay in £12,000 in NI contributions. Let's say a nice even £50,000. That's £250m.

It sounds like a lot of money, and it is. It's also about 0.01% of GDP, which sounds a lot less.

It also doesn't take any account of workers that banks move in to London to take account of what will almost certainly be a more business friendly environment.

[fido]

davepoth said:

5,000 workers, let's say they're on £100,000 a year average. They each pay £35,000 in tax and NI, and the company will pay in £12,000 in NI contributions. Let's say a nice even £50,000. That's £250m.

£100k is ball park for highly skilled bank staff (as would frequent PH) but perhaps these are low-end operational roles (which some of the banks are moving to the EU anyway to reduce operational costs). More of the same old scare stories. After the 20% or so devaluation of the £ they might be moving them back very soon!!

[CaptainSlow]

Greg66 said:

The reality seems to be that there isn't such a thing as a pro-Leaver who wants to hear anything that might be regarded as "bad news". Anything like that is brushed aside as untrue, improbable, immaterial, insignificant, unrelated or (if all else fails) traitorous.

I'm all for making the best of things, but avoiding the bits of everyday reality around you because you just don't like the look or sound of them does no one any favours.

Maybe from here we move seamlessly to a position of greater strength. Maybe we fall into a fallow patch for a generation. Maybe something else entirely will happen. Everyone knows what we all want but there is precious little certainty at the moment, but like it or not some employers are starting to make decisions.

I don't think any pro-Leaver is denying that some jobs may move abroad, it's just that the scale of the damage seems to be far lower than some of the "experts" prophesied and we're still waiting for the "immediate" recession.

To add, many pro-Leavers believed project fear and still voted to Leave, maybe, to some, GDP per capita isn't particularly important.