George Osborne will be burnt in ‘bonfire of the bankers’

The Times Harry Wilson, Simon English

Published at 12:01AM, November 9 2015

Standard Chartered recently announced it was planning to cut 15,000 jobs globally   Yui Mok/PA
Huge City job cuts to hit Treasury tax take hardThe Treasury faces losing hundreds of millions of pounds in revenue as several of the City’s largest employers prepare to lay off thousands of workers.

Credit Suisse, Deutsche Bank and Standard Chartered, which together employ more than 15,000 in London, have announced worldwide redundancies totalling more than 30,000 in the past month, raising fears of further widespread job losses in the Square Mile in what has been dubbed a “bonfire of the bankers”.

The City of London Corporation estimates that the average UK financial services worker contributes about £27,000 in employment taxes and employer contributions to the exchequer, meaning that if only a quarter of the cuts announced so far fall on British workers, the cost in lost revenue would be about £200 million. This could prove to be a conservative estimate because the tax contributions made by London-based workers are more than likely to be higher than the UK average, meaning that the hit to a chancellor already reeling over the tax credits reversal could be greater still.

Financial services recruiters also believe the redundancies announced so far could be only the start of a larger-scale retrenchment across the City as investment banks seek to reduce costs amid a drop in trading revenues.

James Hick, the managing director of ManpowerGroup Solutions, said that the company’s latest employment survey pointed to a “significant slowdown in hiring”. He said: “We would expect continued job losses in 2016 as the banks address profitability issues.” Morgan McKinley, a global professional services recruitment company, said last month that, although generally it had been a good year for jobs growth, there had been a marked slowdown after the summer, when worldwide markets were stunned by the crash in Chinese share prices.

There was a 14 per cent fall month-on-month in available jobs in September, according Morgan McKinley’s employment monitor. “After the holiday season, things were unusually slow to get going,” Hakan Enver, of Morgan McKinley, said.

Among the hardest-hit workers have been middle and back-office staff as banks increasingly try to cut costs through automation. Many of these jobs are done by contractors; HSBC recently imposed a 10 per cent wage cut on these staff, as well as forcing them to take a mandatory two-week unpaid break before the end of the year, highlighting the lengths to which banks are going to hit their financial targets.

HSBC is conducting a review of its domicile that could lead the UK’s biggest lender to relocate from London to another jurisdiction, most likely its old home of Hong Kong. Any decision to move would lead to at least several hundred staff quitting Britain.

Barclays is considered likely to make further job cuts, although a decision on how many will go will wait until Jes Staley, the new chief executive, starts work next at the start of next month.

Though a former investment banker, Mr Staley has offered no guarantees to support Barclays’ under-fire trading division as the lender attempts to put in place the UK’s new ringfencing rules that will cost it more than £1 billion.

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