Paper chase
BRITAIN as the workshop of the world may have lost some of its markets, but when it comes to printing bits of paper and selling them to foreigners we are still tip-top. Our unit trusts are net export earners to the tune of £298 million a year. Come 1992 and the single market for financial services, what every European home will need is a stake in a splendid British unit trust. What it is likely to get is a (doubtless inferior) model labelled 'Made in Luxembourg'. This is not, for a change, because some fiendish Eurodoggle is keep-
ing our financial exporters out. It is be- cause the British tax rules for this kind of business make Luxembourg a far more sensible base. The funds managed in Lux- embourg, which on the mid-1980s were little more than half the size of those managed in London, are now three- quarters of London's size and are catching up fast. Few foreign customers can be sold on the joys of writing to the Inland Revenue's New Malden office for tax credits. Tax havens and regulatory havens tend to outlive their advantages — that has been the City's knack — and if we let the business go, later reforms will not retrieve it.
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