HSBC and Standard Chartered are looking at the viability of quitting London for a new home in Asia because a big jump in a tax on UK banks makes staying in Britain increasingly painful. As Hayley Platt reports both banks will be closely watching next month's UK election.
Nicola Sturgeon has pledged to make ending austerity her number one priority. Scotland's nationalist SNP leader has made it a key part of her party's manifesto, along with increasing public spending by 0.5 percent every year. She would also like to introduce a tax on mansions and bankers' bonuses and scrap plans to renew Britain's Trident nuclear deterrent. SOUNDBITE: Nicola Sturgeon, leader of the SNP Party, saying (English): "When money is so tight, we believe it to be all the more important that we use our voice and our votes to make sure that we do not squander scare resources on new nuclear weapons." Britain's just weeks away from the most unpredictable election since the 1970s. The SNP could be one of the biggest winners in what many expect to be an inconclusive vote. The uncertainty and the prospect of new bank levies is causing two of Britain's biggest lenders to consider relocating their headquarters. HSBC and Standard Chartered are both looking into the feasibility of moving their headquarters from London to Asia where they do much of their business. BGC's Mike Ingram. SOUNDBITE: Mike Ingram, market analyst, BGC Partners, saying (English): "The wide perception is of course that if the Labour party is in a controlling position that they will be relatively more restrictive of banks activity in the UK it might just tip the scales." Britain's banks are being made to pay for the financial crisis. And last month the government raised taxes by a third. It was the eighth rise in less than five years. SOUNDBITE: Mike Ingram, market analyst, BGC Partners, saying (English): "If you look at corporate tax rates for example in Hong Kong itself it's only 16.5 percent, presumably they wouldn't be suffering the bank levy which is on their entire global balance sheet at the moment, which they suffer in the UK. Some investors support the increases. Aberdeen Asset Management, Standard Chartered's second biggest shareholder, is one. But the bank is now set to pay $500 million, or about 9 percent of its earnings, in tax this year. At HSBC the figure is $1.5 billion. Some analysts believe an even less sympathetic government could be the final straw.