WHEN does a flurry become a spate? Companies seem to be almost queuing up now to relocate out of Britain's high tax regime to balmier climes.
And the trend is only likely to get more pronounced as businesses seek any way to conserve cash in what m
any are saying are the worst economic times since the three-day-week, lights-going-out, high-unemployment, orange-flared 1970s.
Frightening (particularly the flares). Yesterday Regus, the world's biggest office rental company, was the latest to ruin the Treasury's weekend as the department watches the threat of increasing waves of corporate tax revenues leaving these shores.
Regus said it was to re-incorporate in the Channel Island of Jersey and set up its headquarters in, and become a tax resident of, Luxembourg.
The Treasury is making all the usual noises – the UK having the lowest headline rate of corporation tax in the G7, great UK business infrastructure, etc.
But, unfortunately, favoured relocation destinations such as Ireland and the Channel Islands were not part of the G7 when I last looked.
Being the lowest-taxing member of a high-taxing Big Boys club is not a unique selling proposition.
The truth is the number and size of the businesses defecting from the UK shows this phenomenon can no longer be dismissed as the decision of a few corporate mavericks with a headline fetish.
Regus's announcement came just 24 hours after major UK engineering group Charter and well-known investment manager Henderson Group divulged they were also switching their tax base to Ireland to cut their tax rate and compliance costs.
Those two followed another two business heavy hitters announcing they were crossing the Irish Sea in the past five months: Shire, the pharmaceuticals group, and United Business Media.
Who's next? Many tax experts believe we may now be at the "tipping point" for such a trend to gather unarguable momentum.
But it is still a massively ticklish government problem. It would probably take a domicile defection from a FTSE 100 household name, an HSBC, HBOS or Next, perhaps, for Gordon Brown and Alistair Darling to feel real pressure to act.
But given the poor state of the public finances and the gathering economic gloom, there does not look a lot of wiggle room for them to appease the business world even in that eventuality.
A government cave-in on the issue, chastened corporate tax olive branches to British business? Unlikely.
BLOODIED Bradford & Bingley again (that's bloodied, not bloody). The bank that has had an avalanche of negative publicity over the summer months has sunk, as previously flagged, into the red.
Bad debts through the roof. Mortgage arrears and repossessions mushrooming. Things to get worse before they get better. It is enough to make a City investor put a fist through his – or B&B's – bowler hat.
A private equity "rescue" that got cold feet following dodgy credit rating agency noises on the bank.
A botched rights issue: we don't need one; yes we do, we were only waiting for the right stock market moment.
A change of chief executives following illness. And a mortgage-lending business model of buy-to-let that is an untested property – in every sense.
New chief executive Richard Pym, formerly of the Alliance & Leicester parish – a stretched and battered A&L itself about to be swallowed by Spanish barracuda Banco Santander – will outline his strategy for B&B in the autumn.
I don't think they will be selling tickets.
He is likely to announce a tightening of lending criteria allied to a measured gamble that B&B's landlord-lending model will prove as resilient in a straitened, monochrome Britain as it was in more iridescently profitable times for the economy.
Alert to all dangers, but not throwing the baby out with the bathwater. That sort of thing.
But B&B's weakness is that it is a one-trick pony in a definitely sick economy.
A takeover doesn't seem likely. Suitors haven't been queuing because B&B doesn't have anywhere near the scale even of the relatively small A&L that attracted Santander.
No, B&B looks in for a long climb on the slippery face of the mortgage mountain.
RUMOUR OF THE DAY
Allianz to sell Dresdner BankALLIANZ is set to sell Dresdner Bank to Commerzbank in a deal that will bring together Germany's second- and third-biggest lenders, according to sources.
The deal – which could be unveiled tomorrow – involves Commerzbank taking a 51 per cent stake in Dresdner and buying the rest later, the sources said. Allianz said it was in "advanced talks" but a deal is not certain.
Taking over Dresdner – which analysts estimate to be worth about 9 billion (£7bn) – will create a group to rival Deutsche Bank.
Allianz's supervisory board is due to meet tomorrow afternoon and most observers expect it to rubber-stamp the disposal of a bank bought amid fanfare seven years ago but which proved a costly embarrassment for Europe's biggest insurer.
The full article contains 846 words and appears in The Scotsman newspaper.
