Luke Johnson: Why I don't miss the Swiss

Entrepreneur Luke Johnson says UK banking exiles are welcome to smug Zurich, wishes the culture vultures would shut up - and lauds the sea-green incorruptibles.

by Luke Johnson
Last Updated: 25 Jan 2011

The FT claims various hedge fund managers who have defected from Britain to settle in Switzerland will cost the Treasury £500m in lost taxes. I even know some of them. Having spent a few days at an entrepreneurs' conference in Zurich recently, I think such exiles are unwise. I accept that Confoederatio Helvetica has good skiing and an impressive system of local democracy. London, meanwhile, is far from perfect, but it remains so much more diverse, sophisticated, glamorous and bohemian than Switzerland that there can really be no comparison. Our capital is a true world city, with all the choice, scale and vigour which that title implies; Zurich meanwhile is suffocating, smug and suburban. I could not wait to leave.

Of course, the financiers are not only departing because of tax. They do not like being endlessly demonised by our media, politicians and union activists. The downturn has brought out unattractive traits such as envy and ignorance among many who should know better. I fear too many of the critics would sympathise with the struggling peasant who had a rich neighbour. The rich neighbour bought a cow, something the peasant could not possibly afford. So the peasant prayed to God for help and his prayer was answered: God asked what the peasant wanted him to do. The peasant replied: 'Kill the cow.'

Educated citizens must be aware that economics is not a zero-sum equation: wealth creators in the City help offset trade deficits in other sectors, and even non-doms pay some tax and invest in Britain. To drive them away is self-destructive and small-minded.

Constant bleating by grand figures from the arts world about the agony of public spending cuts is becoming grating. We all understand that culture is important and that the creative industries indirectly benefit from state subsidy. But sometimes such interventions can go too far and breed a superior attitude that celebrates anything obscure over the popular, a form of snobbery which sneers at commercial success. Take the Barbican Centre. It claims to be Europe's largest multi-arts centre, but, given its facilities, the number of people who use it is disappointingly low. Moreover, it must be one of the more heavily subsidised arts complexes in the world. The City of London Corporation donates £20m a year to the Barbican and it enjoys a lucrative conference business. Yet are its performances playing to anything like capacity?

By contrast, the National Theatre sells 90% of its seats and subsidy only represents 30% of the overall budget - and it produces shows of world-class quality. I hope the burghers of the City of London Corporation use the current age of austerity to demand much more from the Barbican.

Every day the news brings further reminders that emerging markets offer better growth opportunities than the mature economies of the West. But there are unsung merits of places such as Britain: take the honesty of our government employees. Despite the Westminster expenses scandal, our politicians and civil servants are remarkably incorruptible by international standards. Indeed, I suspect many foreigners must have been baffled at how outraged we were by the petty fiddles of our MPs.

For the antithesis, look up a new website called, from Bangalore. It reveals just how bent so many state workers are in India. This ingenious non-profit initiative has been running for just a few weeks, but it already details almost 1,500 cases of bent officials demanding bribes, from police to customs officers, from staff issuing passports to those granting death certificates.

Britain is far from crime-free, but my invariable experience has been that our judiciary, bureaucrats and public servants are very largely honest. No doubt we would be better at doing business in places such as Latin America, Russia, Africa, India and China if we knew how to bribe more slickly. But I suspect that one of the reasons foreign investors deploy so much capital here is because we are pretty straight and that consequently they can trust us.

Recently, I have found myself busy giving addresses on the public speaking circuit. This can be more work than it appears, partly because I write my own material. A twenty-minute talk requires 3,000 words, which can take an afternoon to craft. Occasionally, such gigs pay well, but all too often there is a solid business reason to accept an invitation on an unpaid basis, or it's a deserving cause that merits a freebie. And of course sometimes I say yes to invitations because of vanity.

Unquestionably, audiences these days prefer short orations, followed by a lengthy Q and A session. It reflects our age: we want participation, not monologues. Moreover, because the interactive segments are unscripted, the speakers are much more likely to say something impromptu and controversial.

My father, who is an excellent speech-maker, once gave me a first-rate piece of advice: always craft your lecture to be a few minutes shorter than your listeners are expecting. There is nothing worse than going on too long.

If I perform at a conference, my favourite slot is immediately after a lengthy, technical speech with lots of PowerPoint slides and bad jokes. The opposite can be a nightmare: I once had to deliver my stuff to an audience of Mancunian students, following on from Ian Livingstone, the fantasy author responsible for the success of Lara Croft. My words were very flat compared with the live footage of Angelina Jolie raiding tombs that accompanied his witty anecdotes.

- Luke Johnson is chairman of Risk Capital Partners.

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