Why our bankers can't afford to live in Geneva

Rich bankers whine about how raising taxes will "force" them to relocate to places such as Switzerland. But that makes no financial sense at all.

Pop down to Waitrose in Bayswater (the nearest one to the natural Notting Hill homes of Britain's bankers) and buy a basket of essentials (milk, bread, a chicken, some pasta, couple of bottles of Medoc and so on) and it will cost you around £40.

Do the same at a co-op in a small town within commuting distance of Geneva, as I did last week, and it will, as it turns out, cost you going on double.

And that's not the only thing that will give the average Brit serious sticker shock. Think houses. Your average four-bed Notting Hill pad comes in at about £2m. In Geneva, if that's all you have to spend you'd better get used to the idea that you aren't going to be living in the centre of town: in the city even the most modest of three-bedroom apartments now comes in at a million plus francs.

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The point here is a simple one. The rich, and bankers in particular, spend a lot of time talking about how rising tax rates at home will "force" them to relocate to places such as Switzerland there probably isn't a hedge fund manager left who hasn't told one paper or another that he's looking into moving to Zurich or Geneva.

But why would you move somewhere where your living costs will more or less double simply to avoid a shift in the top tax rate from 40% to 50%? Unless very little of your income is to be spent (and I accept that is the case with the very rich) it makes no real financial sense.

After all, the point of living is not just to spite tax collectors. It is, as a poster for the Conservatives in the 1955 elections (reprinted in the Guardian this weekend) points out, "the standard of living that counts." Yet another reason why all those hedge funds will still be here this time next year.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.