Storm over HSBC threat to move HQ out of Britain

BRITAIN’S biggest bank triggered a political storm yesterday after it threatened to leave the country.

HSBC is reviewing whether to quit its London headquarters of 20 years over concerns about the bank levy, the impact of regulatory changes and uncertainty over Britain’s future in the EU.

HSBC employs 48,000 people in Britain and 266,000 around the world.

The review follows pressure from shareholders, increasingly concerned that rising taxes and stricter regulation makes it too expensive to run a bank from Britain.

Chancellor George Osborne last night insisted tougher regulation was needed to prevent a repeat of the sort of bank bailouts the last Labour government had to make. But he seized on HSBC’s threat to quit as evidence that there would be an exodus of major firms if Labour won power and implemented an anti-business agenda.

He said the threat was a ‘timely reminder of what is at stake in this General Election’, adding: ‘ If we proceed with an antibusiness set of policies, we are going to drive companies abroad, we are going to

‘Timely reminder of what is at stake’

see jobs lost – and the people who will pay the price aren’t going to be bankers in the City of London, they are going to be working people across our country.’

Labour leader Ed Miliband denied his plans to raise the levy on the banks was to blame. He said: ‘I don’t believe HSBC is going to leave the country because of a small increase in the bank levy.’

Labour highlighted the bank’s concerns on the prospect of an in-out referendum on Europe promised by the Tories.

Addressing shareholders at its annual meeting in London, chairman Douglas Flint said the bank was looking for ‘the best place for HSBC to be headquartered in this new environment’.

He said the ‘economic uncertainties’ created by the risk of Britain leaving the EU also ‘stand out’.

Some City observers believe HSBC’s warning is a hollow threat – pointing out that it has reviewed its headquarters several times and always opted to stay.

However, Shadow Chancellor Ed Balls said it was proof that firms viewed the chance that the UK might leave the EU as the biggest risk to the economy.

City – Page 100