France will this week step up efforts to attract business from London in the wake of the Brexit vote by appointing a team of corporate leaders and politicians to drive the campaign.
Ross McInnes, an Oxford-educated Franco-Australian and chairman of Safran, the French engine maker, is to be named the “ambassador”, heading efforts to lure UK-based companies to Paris, according to sources.
Valérie Pécresse, the centre-right president of the wider Paris region, and Anne Hidalgo, Paris’s socialist mayor, will also be heavily involved in a sign that the initiative has cross-party support.
An important focus will be attracting financial companies likely to be among the worst affected by the decision to leave the EU if they lose their "passporting" rights to operate across the bloc. Some banks, such as HSBC, have signalled that they could move jobs to Paris.
The team will also target companies in the industrial, mining, energy and broader service sectors as they look at any businesses that chose to be based in the UK because of its EU membership, people close to the discussions said.
Multipronged approach
Setting up the team is the latest step in a multipronged approach adopted by France as several European states compete to attract businesses that decide to move part or all of their operations from the UK.
Immediately after the June 23rd referendum, President François Hollande’s Socialist government changed the tax rules for expatriates in Paris to make it more generous.
“We want to build the financial capital of the future . . . now is the time to come to France,” Manuel Valls, the French prime minister, said in July.
In September, French financial regulators said they were simplifying the process of registering new financial companies in Paris, in part by allowing documents to be filed in English. They said this came “in the context of the Brexit vote”.
Paris’s La Défense business district this month unveiled an advertising campaign aimed at capitalising on the uncertainty created by the Brexit vote, with the slogan: “Tired of the fog? Try the frogs!”.
There have also been discussions between French business groups and the government about introducing a special labour code for financial workers, in effect making it easier to hire and fire them than other workers in France.
The inflexibility of the French labour code, along with high taxes, is one of the main reasons some financial groups say they will be reluctant to move to Paris.
But the idea of a special rule for finance workers has been ruled out by the government, mainly on constitutional grounds. “We cannot have a specific status for jobs in the financial sector,” Michel Sapin, the finance minister, said last week.
No sweeteners likely
Senior British-based bankers are doubtful that French politicians will propose any sweeteners to attract business from the UK before next year’s presidential election.
One banker said he viewed any French promises with scepticism because its parliament recently voted to strengthen its financial transaction tax. He said his bank had been lobbied by French, German and Luxembourg representatives.
The UK-based banking executive said the French delegation had asked for a “wish list” of reforms his bank would want before choosing Paris ahead of other cities to relocate British operations in the event of a hard Brexit.
Mr McInnes started his career in 1977 with Kleinwort Benson bank in London. He was previously at Thomson-CSF, the French defence electronics group now called Thales, and has worked for Kering as well as Safran, where he was chief financial officer from 2011 to 2015.
He was appointed as France’s “special representative” for economic relations with Australia this year.
Other heavy-hitters involved in the process include Christian Noyer, the former governor of the French central bank, who has been doing unofficial lobbying on behalf of the government.
Gerald Mestrallet, chairman of Paris-based utility group Engie, is also involved as president of Paris Europlace, a lobby group to promote Paris as a financial centre. - (Copyright : The Financial Times Limited 2016)
