Worries grow over Britain's future as a global centre for finance

Warning that international business is being put off the UK by red tape and tax

An amber light is now flashing over the attractiveness of the UK as a place to set up and grow financial and related professional-services firms, the leading body promoting the country to such businesses warned yesterday.

TheCityUK, headed by Sir Stuart Popham a former senior partner of legal giant Clifford Chance, said that while there has not yet been an exodus of staff, "the deteriorating position of the UK relative to other financial centres is starting to have an impact and urgent action is needed before a tipping point is reached".

Sir Stuart, the chairman of TheCityUK Competitiveness Steering Group, said: "We can no longer assume that international businesses will want to come or stay in the UK. At a time when our economy should be capturing the maximum possible share of emerging-market growth, there are concerns from business over the direction of travel our country is taking with financial services."

In a 48-page report entitled Driving Competitiveness, TheCityUK analysed decisions on where they should be based made by 147 financial services firms in recent years. Of the decisions analysed between 2006 and 2012, 56 per cent were made against the UK and only 25 per cent in favour, with the remainder being put on hold.

Sir Stuart said: "For companies to make positive location decisions, we must give them confidence in the future and I would encourage Government to create this sense of confidence that the UK is a global hub for financial services with a clear vision of the part it wants the sector to play.

"Those who make changes to regulation, tax and policy on infrastructure investment must recognise the growing importance their decisions will make for jobs, economic growth and tax revenue as the actors decide where to locate."

TheCityUK report calls for a more certain financial regulation environment, more competitive taxation and a commitment to improve the UK's infrastructure. It also says the Government must make clear its commitment to the European Union which 40 per cent of the firms taking decisions about where they were based cited as a core reason for choosing London.

The report said that between 2006 and 2012, a net 22,000 full-time jobs in financial services had been lost as a direct result of changes in competitiveness – that is a quarter of the total fall in overall headcount. But it added that a further 63,00 jobs went as a result of this in the financial services supply chain and because of lower spending caused by unemployment.

The financial and professional-services sector employs more than 2 million people and accounts for 13.5 per cent of Britain's gross domestic product.

Chris Cummings, chief executive of TheCityUK, said: "Location decisions are now a standing item on the agenda for board meetings and the decision to invest in the UK is one that remains in the balance for a number of significantly sized financial-services firms."

He added: "At a time when other parts of the world actively seek to grow their financial-services sectors, our Government must focus on those discretionary elements it has some control over.

"The opportunity is there to ensure that the UK remains the pre-eminent location for financial-services companies, but to achieve this Government will need to play a significant role in enhancing the appeal of our economy for financial-services companies."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past