Goldman Sachs boss: London finance lead ‘fragile’
London’s position as a global financial centre is at risk from years of anti-business policies that are pushing talent and capital abroad, the boss of Goldman Sachs has warned.
David Solomon highlighted a damaging combination of Brexit, the UK’s tax burden, constrictive regulation, and the recent decision to abolish the non-dom regime have all harmed Britain’s appeal to international investors, leaving its ascendancy “fragile”.
“Policy matters, incentives matter… if you want to protect and retain the leadership position that the UK and London has in participating in the broad global financial system,” he told the Master Investor Podcast.
“And so I think it’s fragile. I’m encouraged by some of what the current government is talking about in terms of supporting business and trying to support a more growth oriented agenda. But if you don’t set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that.”
Solomon, who has been at the helm of the US banking juggernaut for seven years, used the rare UK interview to single out Brexit and the scrapping of the international investor-friendly non-dom status as especially damaging to the UK’s standing on the global stage.
The Chancellor’s decision to proceed with an extreme iteration that abolishes the generous tax status has sparked what many wealth advisers and tax lawyers have branded an exodus of wealthy foreigners.
Goldman Sachs boss joins non-dom exodus
City PM revealed in May that one of Solomon’s London-based colleagues, Richard Gnodde, had left the UK to avoid the change.
And Solomon told podcast host David Frost the policy risked jeopardising the government’s bid to reboot the UK economy, saying that pushing “talented people that are much more mobile away” would invariably dent the UK’s growth mission.
“I think when you look at any jurisdiction, tax policy has to make sense,” he said. “Incentives matter if you create tax policy or incentives that push people away, you harm your economy. And you don’t you don’t drive revenue increases.”
The banking chief also confirmed the UK’s decision to leave the European Union had prompted Goldman Sachs to shift more resource onto the continent that would otherwise have stayed in London.
He said: “You know, because of Brexit… there are requirements around certain job functions and certain things that we do in our business that used to be done in London, that now regulatory are required to be done on the continent. And that’s created a shift.”