It was the most gripping opening to a most exciting second decade of the 21st century. Just days into January 2010, Barclays bank stunned the world's stock markets by moving its HQ, and 5,000 of its investment banking staff, to Hong Kong. Another 2,000 Barclays bankers and traders were transferred to Mumbai, where India's National Stock Exchange is still the fastest growing exchange in the world; 2,000 staff decamped to Singapore, now the world's epicentre for energy technologies and the first producer of hydrogen cell cars; and another 500 traders were moved to Rio de Janeiro, South American's busiest stock market.
To national uproar and street protests, Barclays bosses Bob Diamond and John Varley defended their controversial move to take the 200-year-old bank off-shore, with the most stinging attack on the then Labour government's latest "super" bonus tax on bankers, levied in revenge for the biggest banking bailout in history. That tax – the City's poll-tax, together with other tax increases which pushed personal tax rates up to levels not seen since the 1970s – became the tipping point for a mass exodus of talent out of Britain, from which we are still recovering.
The Masters of the Universe at Barclays were the first to go. But within months, the trickle became a flood. Next to go were the broking firms Icap and Tullett Prebon; and then the City's top bankers at Goldman Sachs, Deutsche Bank, Morgan Stanley and JP Morgan followed the fleeing caravan to the East. It wasn't only the UK's horrendous tax regime (or London's transport grid-lock, or the failing NHS which saw cancer patients flying to Romania for the most basic of treatments) driving them overseas, but fears that divisions within the Old World Europe would inevitably lead to a bust-up over the Euro, as countries such as Greece and Spain struggled with their staggering debts, and worries that the continent would be stuck in low-growth for decades to come. By contrast, the energy and consumption of the Bric countries – Brazil, Russia, China, and particularly India – was just too fantastic an opportunity for them to miss.
How right they were. As the Barclays bosses predicted, the UK, along with its continental neighbours, had become so hamstrung by its punitive fiscal policies and regulation that leaving was the only way to wake the politicians out of their slumber with, as Diamond put it, a bit of "shock and awe".
Well, they got both. By late summer, Greece and Spain had dropped out of the euro and several other countries – including the UK – were considering whether to leave the European Union altogether. Here in the UK, the move to pull-out gathered such steam that David Cameron's Conservative government worked frantically behind the scenes with some of the EU's smaller countries, to get the Belgian president ousted and Lord Mandelson installed as president. It was only then that the Europeans started to realise that, if they were to even start competing seriously with the East, they would need to take the axe to the state – rolling it back was no longer an option.
But, as we discovered, it wasn't just the UK that saw its bankers flee. A similar story was being played out in Paris and Frankfurt and Milan, as the top financial brains went east to where the capital was being raised in the cities of Mumbai and Shanghai – the latter now the world's biggest capital market since Chinese companies gained the confidence to raise capital in their own local markets. If Canary Wharf, Fleet Street and Mayfair became ghost streets, just look for a moment at La Defense or Frankfurt's financial district. Even Wall Street, which had rejoiced as Europe went ahead with its penal taxes and suffocating regulation, was persuaded to take its arrogance east.
But it hasn't all been bleak. With the decline of the City, some of the UK's finest brains finally moved back into the bio-technology centres which had sprung up around Cambridge, Manchester and Imperial College. And, although they were more or less funded by the Singaporean government, these businesses began working alongside industrial partners such as Rolls-Royce and National Grid on the next generation of solar energy farms based in the Sahara – now powering about half of all Europe's energy needs. The biggest surprise of the decade was the way big, nasty business not only woke up to its responsibilities, but took over from government as the green pioneers, leading the way in energy savings and creating new sustainable technologies for its shareholders and customers. And who knows, Barclays and its followers may even return home in a couple of decades time. 'Reuse content