Friday, 27 April 2012

It’s not just the high tax that the French are escaping

When Mike Robb, Speaker’s Chair’s editor, wrote a piece last Sunday willing us Brits to hope for a Francois Hollande victory in the French presidential election, one felt a certain tongue in cheek was at play.

A Socialist win would damage France’s competitiveness: tax increases on earnings above €150,000; the proposed 75% tax on millionaires; corporation tax raised; all signalling that France was ‘closed for business,’ so the argument went.

But, whilst this would hurt France, this would in turn benefit the UK. Businesses would relocate to London, hordes of wealthy French men and women would fight their way onto the next Eurostar.

Noises coming out of France suggest this argument may not be far off the mark. The Times reports that an exodus is on the cards. Online inquiries from France about homes in expensive parts of London have increased 19%, according to property agents, Knight Frank.

If any of this does materialise, (I remember the grumblings from certain British millionaires who threatened to flee if Labour came to power in 1997. Most stayed didn’t they?), they’ll join a sizable expat community.

400,000 French people live in Britain already, with around 300,000 residing in London alone. Some believe this number is even higher. Their reasons for leaving are numerous, not merely a load of wealthy exiles escaping the clutches of a high tax society.

Now part of France’s recently created Northern Europe constituency, many left France long before Hollande’s tax threats. The spectre of long term unemployment and an uncertain future lingered in the minds of many, especially the young.

Axelle Lemaire, the Socialist candidate for the UK and northern Europe, revealed a number of factors at work:

“Education and raising children with two languages is a big issue. French people living in the UK are young, the majority under 40. There are more women than men.

“One third work in the public sector, especially in education. The idea of lots of French bankers in the City is only part of the picture. Most are family orientated, with more than three children per family.

“[Some want to escape] the hierarchy and discrimination of the French system."

For over two decades, youth unemployment in France has remained stubbornly high. At 19% in 1990, barely falling since, and currently standing at around 22%.

Five years ago, before the 2007 general election, a trip to London and a chance to capture the votes of its French community, made up part of Nicolas Sarkozy’s campaign trail, where he delivered this memorable line:

“France is still your country even if you're disappointed by it."

Reasons given for leaving then were similar to those articulated now: trouble finding full-time work, limited opportunities, up against a rigid hierarchical corporate culture, and a lack of dynamism, spurred on by a disdain for globalisation.

So, while the headlines in the coming weeks will be dominated by stories of well-to-do French folk heading for the exits, it’ll be worth remembering that most of those who have already left did so for a less anxious and more secure future, and not to further bolster their coffers by paying less tax.

This comment piece was first published by Speaker's Chair on Friday 27 April 2012

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