Call to ease taxes, visas for UK finance

The UK must increase tax incentives and make it easier for overseas talent to come to the country if it is to regain its reputation as the world's premier financial centre, according to the sector's lobby group.

David Sapsted

8 September 2021

TheCityUK has unveiled an international strategy aimed at putting the nation back at the top of the global rankings for financial services - a position currently held by New York, with several Asian centres close behind.According to the trade group, the UK’s status as a world leading financial centre is at risk unless industry, government and regulators work together to boost long-term competitiveness, deepen key trade links, and focus on key areas of future global growth.Miles Celic, CEO of the TheCityUK, said the single most important issue for financial firms was being able to hire globally - something which, he believed, the government "absolutely understood".The new strategy is a product of consultations between TheCityUK with leading financial firms, business groups and partners across the industry."Over the past decade, despite the growing size and volume of many market segments, the UK has seen decline relative to its international competitors," said the London-based organisation."This has been driven by a number of factors, not least the highly impressive growth of new financial centres in Asia and the ongoing progress made by the United States. It has resulted in the UK losing ground in global market share in some areas of financial and related professional services."

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The report, ‘Making the UK the Leading Global Financial Centre’, sets out a plan that underlines the need to strengthen market share in existing areas where the country already leads, such as FinTech. It also says the UK must build its capabilities in areas of global growth where the UK has a strong competitive advantage, such as data and technology, global ESG (environmental, social and governance) markets, international investment opportunities and risk management.Proposals include:

Developing new global markets around key areas of future global demand, including becoming a global hub for data and technology by championing common ground rules for digital trade and seek targeted data transfer agreements.
Strengthening the UK’s role as a gateway through which global investors can channel funds to businesses across the UK and growth markets around the world.
Attracting the world’s talent by making visas cheaper and quicker to process.
Boosting foreign direct investment by amending the tax regime for the financial services sector.

Mr Celic said: "Being host to the world’s leading financial centre provides large and widespread economic benefit to the UK – which is why there is no shortage of competitors seeking to grow their own financial centres.“One of the greatest risks for any successful financial centre is complacency. The last decade has been one of growth for our industry, yet global competitors have grown faster."However, with the right strategy in place and a clear focus on delivery, the UK can pull away once again from its competitors. Delivering the strategy will create more high-skilled, high-value UK jobs, and attract more foreign direct investment into businesses in all sectors across the UK."It will put the UK at the forefront of technology and innovation and position the UK as a leader in financing the growth of the green economy."