London targets New York with five-year financial plan

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  • Ambitious plan hinges on tax cuts and open hiring
  • TheCityUK says New York took top spot in 2018
  • Brexit and the rise of Asian financial centers add pressure

LONDON, Sept 7 (Reuters) – Britain must cut taxes on banks and make it easier to hire foreign staff, its financial and professional services lobby has said in a plan to help London dethrone New York as world’s leading international financial center within five years. years.

The strategy paper published by TheCityUK on Tuesday reiterated some ideas already aired in government-backed reports and elsewhere in recent months as the City of London seeks to regain ground lost following Britain’s departure from the EU.

“According to some indicators, the UK is losing ground: London is now falling further and further behind New York each year while other centers are strengthening,” the newspaper said.

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The US financial capital overtook London in 2018 in a top annual survey, he said, adding that New York dominated stock market listings.

“The UK must therefore focus relentlessly on strengthening its international competitiveness to win back the prize of being the world’s leading international financial centre,” added lobby group TheCityUK, which promotes the wider financial sector. abroad.

Britain’s departure from the European Union has effectively closed London off to its biggest financial services customer, adding further pressure to catch up.

The Department of Finance has already introduced reforms to make London’s capital market more competitive, and TheCityUK has set a five-year target for London to “leapfrog its rivals” in changing tax, visa and other rules.

UK Financial Services Minister John Glen said competitiveness is at the heart of everything government does and that he shared TheCityUK’s ambition to grow the financial market because EU freedom offered a clear opportunity.

“It’s not going to be about deregulation and looking at a race to the bottom as some may have predicted,” Glen said at a newspaper launch event, adding that people are looking for incremental changes. rather than radicals in the capital markets.

“We can be more nimble,” Glen said.

Becoming the global hub for financial data, sustainable investing and investment and risk management will also be crucial in helping Britain leapfrog New York, TheCityUK said.

The total tax rate for a London bank is 46.5%, 13% higher than a New York-based bank, he added.

Glen said he recognizes that taxing banks needs to be competitive alongside the United States and elsewhere.

The biggest issue for financial firms is being able to hire globally, said TheCityUK CEO Miles Celic.

“In the conversations we’ve had with the government, I think that’s something that’s absolutely understood,” he told reporters.

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Reporting by Huw Jones; Editing by Alexander Smith/Mark Heinrich

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