Paris in bid to woo London banks

FRENCH AUTHORITIES on Friday stepped up efforts to attract London banks to Paris after Brexit by pledging to cut labour costs and ensure they do not face tougher regulations than European rivals.

There is fierce competition between Paris, Frankfurt and other European cities to woo the banks based in the City of London financial centre as they consider where to shift some operations to maintain access to the European Union’s single market after Britain leaves the bloc.

Until now, Paris’s rivals, including Frankfurt, Dublin and Luxembourg, have been making the headlines as the locations banks, insurers and asset managers have chosen to open new hubs.

“We are determined to make Paris more competitive and attractive,” Prime Minister Edouard Philippe said, announcing that the government would scrap the highest bracket of payroll tax for firms like banks that do not pay VAT, and cancel a planned extension of tax on share trading.

It would also make sure that bankers’ bonuses are no longer taken into account when labour courts decide on unfair dismissal compensation.

The payroll tax France charges banks and some other sectors such as real estate and healthcare is a charge that companies pay on each salaried employee. It is not levied in most other European countries.