Friday, 14 March 2008

Chancellor drives tech away from UK

The "unintended consequences" arising from the policies of our new inept Chancellor seem to be mounting by the day. Today the FT reports that Yahoo is set to move its European HQ from London to Geneva "for corporate tax reasons".

In addition the FT notes that "Google which has large commercial operations in London, recently chose to base its European engineering headquarters in Zurich and in 2006 Electronic Arts, the games publisher, moved its European headquarters from outside London to Geneva."

I find all this desperately depressing. As Silicon Valley and Seattle have shown, the 'Cluster effect' in tech is crucial. To a lesser extent this has worked in Cambridge in the UK too. UK HQed companies drive local research, inspire local universities, use local suppliers, float on UK stock exchanges using UK legal, financial, M&A and PR advisers. We have a dwindling band of such UK HQed tech companies. So what we had tried to create was the UK being the "Best place in Europe" for US, Japanese, Indian, Chinese etal companies to HQ their European operations outside of their home country. We had been doing pretty well at that game and we have ALL gained substantially as a result. Now our current Chancellor seems hell-bent on showing these very welcome visitors the door. The Welcome Mat has been abruptly removed.

Every aspect of the tech sector in the UK will pay dearly for these hugely shortsighted policies.

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