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UK: Fresh threat of blue-chip exit

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In a speech Monday at his party's annual conference George Osborne, the U.K.'s Chancellor of the Exchequer, pledged to the country's businesses to "go on cutting your taxes to the lowest rates of any major economy in the world."

"In return, you have to do more to train your workforce and to pay higher wages," he added, in a speech many interpreted as his pitch to be Prime Minister when David Cameron leaves office.

But might red tape and increased ease of movement threaten the country's status and push large-cap multi-national companies out of the U.K.?

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Prudential is the latest U.K. financial services company whose London headquarters are in the spotlight. The insurer, which has a growing Asian business but maintains around one-fifth of its business in the U.K., would say only that "we regularly look at the structure of our business" when asked about a report in the Sunday Times that it is considering moving.

It will face tougher capital requirements which could limit its ability to make different kinds of investments, under European Union rules known as the Solvency II rules, from next year.

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The U.K. government has already made significant concessions to keep HSBC and Standard Chartered in the country, by cutting the bank levy which both had criticized. While HSBC has yet to confirm whether that is enough to keep it domiciled in the U.K. (and Chinese market turmoil is likely to be another factor determining this), Standard Chartered CEO Bill Winters said in August that the emerging markets-focused bank had "no current plans" to change domicile.

European Union legislation is more difficult for the government to alter, however, even with the threat of a U.K. exit from the trading bloc in the next couple of years.

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However, back at the Conservative Party conference, Osborne did his best to persuade that the U.K.'s ties to the EU were not about to bind U.K. business, stressing that the U.K. government doesn't want to be part of "of their ever-closer union."