According to the latest survey of financial professionals by eFinancialCareers.com, a leading global financial careers website, a large majority (61%) favour making an immediate start on reducing the UK’s massive budget deficit. Less than 40% (39%) share Prime Minister Gordon Brown’s view that action should wait until the recovery has firmly taken hold.
And in terms of which political party is offering the most coherent plans for reducing the national debt, nearly half (46%) of the 434 financial professionals surveyed believe the Conservatives are, compared to just 16% favouring Labour’s plans and 12% the Liberal Democrats’.
With respect to whether or not the banking industry needs reforming, the overwhelming majority (74%) of those participating in the eFinancialCareers.com survey believe it does; and of those, more than twice as many feel the Conservatives are offering the most credible reform proposals – 38% backing the Conservatives’ plans, compared to 17% each favouring the proposals of Labour and the Liberal Democrats.
However, the Conservative Party’s plan to potentially introduce a unilateral tax on banks in the UK in the absence of any international agreement, was treated with scepticism by the majority. 55% believe it will damage the reputation of London as a leading financial centre.
Nevertheless, a greater number - over 60% - believe Chancellor Alistair Darling’s March Budget announcement which outlined a series of proposals for levying taxes on the banking sector without specifying a single route, was either fundamentally misguided (38%), or concerned that its lack of clarity is now destabilizing the market (25%).
Indeed, Labour’s insistence that RBS and Lloyds TSB provide an additional £94 billion of lending to UK businesses is viewed with scepticism: 56% believing it is mere political window dressing and does nothing to address the central issues of how best to reform the banking system to avoid a future financial crisis. 20% said mandatory lending will simply destabilize the system further in the future.
With regards to those initiatives bankers think would best ensure the future stability of the UK banking sector, the most popular views expressed in the eFinancialCareers.com survey were: separation of the investment and commercial banking operations of UK financial institutions, and imposing increased capital and liquidity requirements on financial institutions. Creating living bank wills was viewed as the least relevant.
Turning to employment prospects, 43% view a potential Labour victory as being the worst result for jobs in the UK financial services industry, with 37% pointing to a hung parliament as the next worst outcome. In contrast, when asked what would be the best outcome for jobs in the sector, 67% said a Conservative win would be best.
The eFinancialCareers.com survey additionally found little confidence that the new 50% marginal tax rate for high earners would be reduced over the next four years, and more than 40% (41%) believe Labour will increase it still further, despite manifesto promises to the contrary. Indeed, were there to be any further tax increases for high earners, 60% said it would influence their decision on whether to continue working in the UK.
John Benson, founder and CEO of eFinancialCareers.com, commented:
“Going by the results of our survey, confidence in the Labour administration is shot; it is difficult to imagine how they could regain the confidence of those financial professionals surveyed - and by extension the wider City - by May 6. And based on our survey results, the City clearly views the Conservatives’ proposals as being the most credible. However, the reaction to the Conservatives’ unilateral banking tax shows there is still some work to be done by the Tories to reassure the financial community that the interests of one of the UK’s strongest industries – and in turn a key driver for the wider UK economy - will not be compromised in order to appease public sentiment.”
The eFinancialCareers.com survey of 434 financial professionals was conducted between 16-23 April 2010. 57% stated they worked in front office positions, 20% back office and 23% middle office.
