IMA Chief Executive Richard Saunders' latest blog.
Yesterday Prime Minister David Cameron launched a new campaign to promote Britain as a great place to do business. And last week the ONS reported the largest increase in unemployment in nearly two years, as the number of people unemployed in the UK rose to 2.51 million.
It is clear that one of the things the UK needs most right now is new jobs. Real, private sector jobs. And above all in the regions away from the South East of England.
As it happens there is a promising route open in the fund management industry. I've been banging on about it for some time, but nobody seems prepared to really take it up. It's called fund administration.
The UK is by far the biggest asset management centre in Europe and the second largest in the world. Yet a lot of the funds - the entities which hold clients' money - are based legally in other centres like Ireland and Luxembourg, whose business in this area has grown enormously in the last 15 years. It is now a key part of the Luxembourg economy and has been a massive part of the remarkable development of Dublin's Custom House Docks area since the late 1980s.
Our friends in Luxembourg and Ireland have done well. But why is it that UK investment managers have chosen to join their continental European colleagues by putting their funds there rather than in the UK?
The answer is, as ever, complex and multi-faceted. But at its heart were a number of bone-headed rules in the UK tax system which raised no revenue but brought uncertainty and expensive administration costs which made it deeply unattractive to locate funds in the UK. So Dublin and Luxembourg were able to offer a more attractive alternative, which under the EU single market could be sold to investors across Europe just as easily.
Over the last several years the IMA has worked closely with Treasury and HMRC to iron out the problems in the tax system - something that officials proved very willing to approach constructively and creatively when the problem was explained. As a result we now have a fund tax regime in the UK that is fully competitive with those in Dublin and Luxembourg.
But as yet there has been little sign of a real move back onshore. Partly this is down to habit and conservatism. Remember the saying "nobody got fired for hiring IBM"? In the funds world Luxembourg now has that status, though interestingly I haven't heard anybody say that about IBM for many years, showing that things don't stay the same forever. Partly it is the formidable marketing machines that Dublin and Luxembourg, in co-operation with their governments, bring to bear.
For these reasons it won't happen on its own. But there is an enormous opportunity here for parts of the UK to have a centre like that in Dublin's docklands. Edinburgh is already well placed to go for it. There is no reason why Cardiff, Manchester and Leeds shouldn't too. What it requires is a little bit of political vision in those centres, a willingness to offer proper incentives, and a little bit of the entrepreneurial flair that Dublin and Luxembourg have shown.
The IMA and the Treasury have provided the tools. Somebody now needs to grasp the opportunity
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