Sunak Promises to Sharpen City of London’s Competitive Edge
(Bloomberg) -- Chancellor of the Exchequer Rishi Sunak will promise to bolster the U.K. finance industry’s competitive edge on Thursday, the latest move by the U.K government to champion a sector that it largely ignored during Brexit.
The country’s finance minister will outline an “ambitious vision” for reforming financial services as part of his annual speech at Mansion House on the state of the U.K. economy, according to a statement. The Treasury will publish a roadmap fleshing out the proposals later Thursday.
The aim of the plan is to “sharpen our competitive advantage in financial services,” Sunak will say, according to the statement. It’s “a plan to make this country the world’s most advanced and exciting financial services hub for decades to come, creating prosperity at home and projecting our values abroad.”
Sunak has pledged to bolster the finance industry in the wake of the U.K.’s departure from the European Union by relaxing regulations and ensuring the country is an attractive destination for finance firms. Since leaving the bloc, the U.K. has launched several reviews and consultations aimed at boosting the industry, which was largely excluded from the Brexit deal negotiated by Prime Minister Boris Johnson.
In recent weeks, Sunak proposed and is said to have secured an exemption for banks from a global plan to make multinational firms pay more tax to the countries where they operate, people familiar with the discussions have said.
The support comes as the EU looks to peel more business away from the Square Mile, a key pillar of the U.K. economy. Thousands of finance jobs and more than a trillion pounds of assets have shifted since the U.K. voted to leave the bloc, although the shift has -- so far -- been smaller and less disruptive than some initially feared.
The chancellor has also vowed to make London a global center of green finance, and on Wednesday, the Treasury unveiled more details of its plans to issue 15 billion pounds ($21 billion) of green gilts as well as a separate issuance of savings bonds for retail investors.
The savings bonds will be sold later in the year, offering a fixed rate of interest over a 3-year period, National Savings and Investments, the state-owned savings bank, said Thursday in a separate announcement. Investments of 100 pounds to 100,000 pounds per person will be allowed and the interest rate will be announced later in the year.
The green financing framework detailed the sort of projects the bonds will fund, including zero-emissions buses, offshore wind programs, efforts to decarbonize buildings and programs such as flood defenses that help the nation adapt to the effects of climate change.
Since leaving the EU, the U.K. has launched several reviews and consultations aimed at making Britain a more attractive destination for finance firms. As well as announcing an overhaul of rules covering initial public offerings and fintech firms, the Treasury is preparing to consult businesses on wider reforms to the capital markets in the summer, Economic Secretary to the Treasury John Glen told Bloomberg earlier this year.
Brexit has stripped U.K. financial firms of ready access to European markets, and while the nation in March reached a memorandum of understanding on financial services with the bloc, the EU has said since that it’s in no rush to grant “equivalence” findings that would restore the ability of British firms to trade more freely in the bloc.
That’s left Sunak seeking to tighten ties with the industry in other nations, and on Wednesday the Treasury announced fresh regulatory cooperation with Singapore. The so-called financial partnership with the Asian nation aims to boost trade, investment and information-sharing and increase collaboration on fintech and green finance.
©2021 Bloomberg L.P.