Can The Last Company To Leave, Turn Off The Lights.

Having written an article about the new taxation rules from Alastair Darling and how these would see businesses quitting the UK, we now see more and more companies upping sticks and moving to pastures new.

George Osborne Britains Shadow Chancellor wrote in a letter to Alastair Darling that a decision yesterday by serviced office provider Regus to leave the UK is more evidence of the damage done by the confusion caused over the business tax regime.

Mr Osborne added that the changes, combined with 10 years of a Labour Government, had "left us with some of the highest corporate tax rates in the European Union" and called on the Chancellor to fund a cut in the UK rate by simplifying capital allowances.

But Mr Darling dismissed Mr Osborne's accusations out of hand, telling him he was "wrong".

"Surveys by respected international bodies including the World Bank and the World Economic Forum consistently show that the UK is successful at providing a business friendly environment and a competitive tax system," Mr Darling said in his response.

Regus is the third company this week to announce that it is to move abroad because of business taxes. Asset manager Henderson and engineer Charter are moving to Ireland where the tax regime is more business friendly and Regus - whose chief executive Mark Dixon already lives in the tax haven of Monaco - is moving to Luxembourg.

They will follow pharmaceutical group Shire and United Business Media who have already relocated to Ireland this year.

Charter, Regus and Henderson all said concerns about possible changes to Britain's tax regime were a key driver of their decisions to leave. "It is fair to say tax is an important consideration for us and we feel like we are doing the right thing," said Mr Dixon yesterday. "I think certainty of tax is crucial in business and what we want is for there to be no surprises. Luxembourg can offer that." Mr Dixon, who hails from Essex and started life as hot dog salesman, also said Luxembourg offers value for money that London, with sky-high property prices, does not. The Regus boss warned the capital must try harder to keep international businesses.

"London has to face up to the fact that the world has become a lot flatter and is much more competitive than it has ever been. As our business model proves, you can be based almost anywhere these days," he said. Regus shares slipped 1¼ to 74½p, valuing the group at £706m.

Philip Yates, chief executive of Henderson, said earlier this week: "There is too much uncertainty about the long-term structure of the tax regime and the fact that so many other companies are looking at a move is a more eloquent testament to that than anything I could ever say."

Mr Osborne urged Mr Darling to reduce the main corporation tax rate from 28pc to 25pc, and bring about a "permanent simplification of the tax system".

The shadow chancellor concluded: "With companies leaving Britain, weakening an already ailing British economy, I urge you to adopt our proposals in order to restore our competitiveness and help prevent any more companies from deciding to leave the UK."

Mr Darling, however, told Mr Osborne the corporation tax rate remains under review, but added changes must be "consistent with transparent and fair tax policy that protects the sustainability of the public finances".

Good news is that Labour are hanging on to power by the skin of their teeth and, barring David Cameron being found with an orange in his mouth, wearing suspenders and visting 5 hookers dressed like Nazis, he should be in power shortly and we can say au revoir to this disasterous experiment with conservative-socialism.

Lehman and 'Club Fed'

Well it's the last week of summer, traditionally a time when you could hear a pin drop in the markets but with the way things are at the moment leaving the desk, for some, is not an option. Especially at Lehman Brothers, where the phones must be on fire with the activity of looking for a buyer.

The question on everybody's lips at the moment is 'When will Lehman Brothers finally give up the ghost?

You would think from all the chatter in the markets that the troubled bank would be heaving its last breath around about now, but is there a reason to suggest that we haven't seen the last of Lehmans?

The take on all this in some quarters is that Lehman may not be too big to fail, but it may be too important to fail. Why? Because Richard S. Fuld Jr., Lehman’s chairman and chief executive, is too important. He is a member of an exclusive club: the board of directors of the Federal Reserve Bank of New York.

Asking people to believe that being a member of 'Club Fed' is an affective guarantee for your bank may be a little stretch, but look at the history. Another member of club Fed, James Dimon, JPMorgan Chase’s chief executive, was handed the deal of a lifetime. Alan D. Schwartz of Bear Stearns? Not a member.

Given the access that Mr Fulds has to the Fed one would assume that he will be chatting to his buddies about keeping the Fed's loan window open until around about the time that Lehmans are out of hot water.

If they are forced to sell there are problems with Lehman assets, however. Buying the Neuberger Berman money managemnet unit for example has thrown up problems. The New York Times suggests that anyone looking at the unit would end up paying twice, once for the firm and a second time to keep all the brokers from leaving.

We have seen issues like this occur with UBS, although they were not selling off the UK wealth management unit, a number of employees (enough to 'devestate' the business according to UBS) were to leave to join Vestra Wealth a start up backed by Goldman Sachs. Vestra were intending to bring on UBS wealth managers and with it, one would expect, their clients, this was at least until UBS took them to court. Anyone buying an investment firm at the moment will have this part of the deal to consider and prospective purchasers looking at Lehman will be thinking no differently.

We all know that things are a little jumpy on certain stocks, Freddie and Fanny, for example, but Lehman investors are also suffering the news roller coaster. The New York Times reports

"Last Friday, a spokesman for Korea Development Bank was quoted by Reuters as saying: “We are studying a number of options and are open to all possibilities, which could include [buying] Lehman.” The brackets and the word “buying” were included in the Reuters report.

Lehman’s stock jumped almost 15 percent that day as investors rushed into the stock on the basis of the word in brackets before it settled down to about a 5 percent gain.

The same spokesman told The New York Times and a half dozen other media outlets that he had been misquoted in the Reuters article. “Such reports are erroneous,” he said. Lehman’s stock has since fallen back to where it was before the article was published.

Nuance can often get lost in translation, and who knows what was really supposed to be in those brackets."

With all the problems we see in the banking world at the moment it is great to see that there are some firms out there willing to give solid advice on cost cutting.

McKinsey & Company, the managemnet consultants, published a helpful report last week on how investment banks can cut up to $2 billion in noncompensation costs.

“Initiatives to curb expenditures need not be extremely demoralizing to frontline employees,” McKinsey says, trying to find ways to save money without affecting the worker bees. So what does it recommend? Getting rid of the consultants.

Yep, you read that right.