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ClimateNE & Climate Change Schools Project support the move to a low-carbon, resilient economy and help businesses avoid risk and realise commercial opportunities. Posts by Jen Atkinson, Krista McKinzey and Harriet Thew » London's status as one of the world's most influential financial hubs has been thrown into jeopardy by the Chancellor's latest attempts to curb bankers' excesses.
Alistair Darling's windfall tax on bank bonuses, announced in last week's Pre-Budget Report, was showcased as a clampdown on the reckless risk-taking that came so close to blowing up the UK financial system last year.
But the move to impose a one-off 50% tax on bonuses over ã25,000 has sparked outrage in the City, which for years has attracted international companies on the back of its competitive tax and regulatory regime.
After the Chancellor's latest bombshell, Hong Kong, Switzerland and New York must be unable to believe their luck.
City analysts are already forecasting a brain-drain of talent from the UK as companies and staff seek to protect their finances - a move that may already have started with Renaissance Capital, the Russian-based investment bank, reportedly poised to cherry-pick some of London's top bankers.
Politically the Chancellor had to be seen to be doing something to curb the recklessness that almost brought Britain to financial ruin. Economically, though, his decision could turn out to be a disaster.
The windfall tax is expected to net at least ã550m for the Treasury's coffers.
But in the long run Mr Darling - and the British taxpayer - will lose out as companies divert to rival centres, worried that if the UK Government can introduce such a tax once, it could do so again.
A more sensible solution would have been for Mr Darling to insist on far greater transparency on balance sheet disclosures to prevent a repetition of previous wild excesses.
He could also have instructed the banks to bring bonus pots in line with capital ratios - ensuring that these big, sprawling companies don't part with money they don't have.
Instead he took the tough stance, which is likely to reap little benefit for Britain but lots for rival financial centres.
Ultimately the Chancellor's banker-bashing could end up de-valuing the UK's biggest asset - and mark the beginning of the end of his tenure on Threadneedle Street.
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