Govt sets up two-phase approach to make City ‘most competitive place for financial services’
The UK Government has set-up a two-phase approach for the City of London in a bid to make the capital “the most competitive place for financial services in the world.”
Chancellor Kwasi Kwarteng will unveil an initial set of reforms in his fiscal statement tomorrow, while presenting a more comprehensive package later this autumn.
Government officials told the Financial Times that the package will include a reform to the regulation of pension funds and insurers, as well as changes to LSE listing rules.
Potential changes were initially reviewed by Boris Johnson’s government after concerns that London was falling behind the likes of New York arose.
Recommendations were made by former EU commissioner Lord Jonathan Hill, but only a few have been implemented.
The mini-Budget will also lead to a U-turn to the recent hike in national insurance as well as an increase in corporation tax.
It will also ease major EU regulations on financial services, including Solvency II AND MiFID.
The measures come as part of Prime Minister Liz Truss’s bid to turn London into “the most competitive place for financial services in the world.”
The PM met on Wednesday with Wall Street executives in what was seen as a charm offensive, City A.M. reported.
Truss told 15 Wall Street leaders – including Bain’s managing director John Connaughton, BlackRock’s chief executive Larry Fink – the government’s long-term plan was “to simplify Britain’s taxes and to make us a better place to invest and be unashamedly pro-business.”
“We want the City to be the most competitive place for financial services in the world, and we see that as a key part of the levelling up agenda, because when we unblock capital, that capital will be used across the UK to make every industry become more productive and competitive,” she added.
According to experts, Truss’s plan to have “lower, simpler taxes” in the UK to put an end to labour shortages will not have the results desired.
Institute for Employment Studies’ director Tony Wilson told the Financial Times that, while a cut in national insurance could help employers pay staff more this winter, it doesn’t change the fact that specialist funding is needed.