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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project