Paris is targeting the “tens of thousands” of bankers its hopes will be driven out of London by Brexit, dangling the promise of tax breaks and flexible redundancy rules to complement the French capital’s cultural charms.
In one of the most aggressive marketing initiatives yet, a delegation of political and business leaders from France met representatives of about 80 banks and fund managers for a summit on Monday on the 37th floor of the Shard in central London.
Since the referendum Parisian officials have written to 4,000 UK-based companies, and they report a “growing stream of enquiries” to an English-speaking hotline that offers advice on schooling, housing and a new expat tax regime.
The French officials predict 10,000 London employees may directly relocate to Paris when their firms lose passporting rights to sell financial products in Europe, with associated employment rising by two to three times that.
“Brexit is a long-term process,” said Valérie Pécresse, president of Ile-de-France region, which includes Paris. “The move will come slowly, so we just don’t know yet [how many will come].”
She claimed a survey had suggested “tens of thousands of jobs” would leave London overall, but added: “It will depend on the strategy of the firms and how hard the Brexit is.”
Pécresse rejected suggestions that Paris, therefore, had an incentive to make sure there was only minimal agreement with Britain for financial market access after Brexit.
“It’s not a question of punishing Britain for its vote,” she said. “It’s a question of trying to keep a strong European Union. If we want to keep a strong EU, it means that people who vote out cannot have it both ways: they cannot have all of the advantages and none of the duties.”
Gérard Mestrallet, chair of the organising group Paris Europlace, said: “We are not here to force financial institutions to leave London. That would be their decision. But if they decide to move some of their activities after Brexit, our message is: come to Paris.”
Despite the imposing location of the event, overlooking the City of London, much of the more overt competition was directed at other European cities also looking to secure a share of the anticipated departures.
“Of course we all regretted the Brexit vote, but this vote opened a period of fierce competition between the main cities of continental Europe,” said Pécresse. “When was the last time you took your partner off for a weekend in Frankfurt?” she challenged her German counterparts.
Employers were told that French labour laws were less strict than was commonly perceived and were presented with a series of charts boasting of lower severance payments than in Britain and redundancy totals in line with Germany.
The organisers refused to release the names of any firms, other than HSBC, who were discussing moving jobs to Paris, saying many were waiting until after the French presidential election to firm up their decisions and go public.
They also rejected the suggestion that the focus on low taxes for bankers was out of step with the political mood or would lead to a race to the bottom with the UK.
“It will be very difficult for the British government to make London like Panama,” said Jean-Louis Missika, a deputy mayor of Paris, in response to recent threats by the British chancellor, Phillip Hammond.
“We are not running that race,” added Pécresse. “ In France we have public services. We want normal taxes, not dumping.”
Nonetheless, the pack of slides given to attendees of the meeting was heavily focused on addressing “misconceptions” about French taxes and labour laws.
“Brexit is an earthquake,” Missika said. “It will reshape the economic and financial landscape of Europe.
“We are not here to steal business from London. We are here to reorganise the financial industry together. We are here to build bridges.”
Mark Boleat, the policy chairman at the City of London Corporation, said he would expect cities such as Paris to compete for jobs, but added: “I am confident that the depth of talent here, our attractiveness as a place to work and live, and assets like English rule of law, language and our regulatory landscape will mean we remain the number one global financial centre.”
