Shares digital

UK plc comes in for a kicking, Tesco’s juggernaut rolls on and banks get a helping hand

Rachel Robson

The announcement that drug company Shire is moving offshore ‘will send shock waves through the Treasury and spark fears that where Shire leads other FTSE 100 constituents will follow,’ says The Telegraph’s Richard Fletcher. He adds that the move will ‘inevitably spark a debate about loyalty and corporate responsibility.’

The Guardian’s Nils Pratley concurs that the Treasury would be entitled to regard Shire as disloyal. ‘The company grew up in Britain, and its entrepreneurial founders presumably enjoyed the benefit of the pool of pharmaceutical talent here,’ he says.

Meanwhile, Fletcher points out that the bigger issue is what the move suggests about the competitiveness of UK plc. ‘In recent years, the UK’s historic position as a great place to invest has been eroded as rivals have cut corporate taxes,’ he says. David Wighton from The Times also refers to this: ‘Is the government going to make the UK tax environment even less attractive?’ he asks. ‘For many business leaders, the recent changes to capital gains tax – which reversed the reforms that Mr Brown introduced ten years ago – and the assault on non-dom workers was the last straw. Business leaders have lost confidence in the government’s commitment to stability and competitiveness.’

Although Shire is the first FTSE 100 company to leave for Ireland, Pratley believes the move is ‘hardly a catastrophe’ and would only become a serious problem ‘if a large multinational was to copy them’. However, Fletcher points out that Yahoo Europe, eBay and Google ‘have all opted to base themselves in Dublin – rather than London – as they expand into Europe.’

Meanwhile, Wighton suggests that the impact of Shire’s move will be ‘largely symbolic’, but adds that unless the government wakes up to the threat, more companies will be ‘lured away by that warm Irish welcome.’