Source: Toby Melville/Reuters
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  • Britain needs to ease taxes and make it easier to hire staff from abroad if London is to replace New York as the world’s top financial hub, according to the UK’s financial and professional services lobby
  • A paper, published on Tuesday by advocacy group TheCityUK, outlined a five-year plan for achieving that goal
  • New York overtook London in 2018 in a leading annual survey and dominates in stock market listings
  • Britain’s departure from the EU also closed London off from its biggest financial services customer

Britain needs to ease taxes and make it easier to hire staff from abroad, the UK’s financial and professional services lobby said in a blueprint designed to help London replace New York as the world’s top financial hub within five years.

The paper, published on Tuesday by advocacy group TheCityUK, reiterated some of the ideas that had already been floated in government-backed reports in recent months, as the City of London looks to recoup some of the ground lost following Britain’s split from the European Union.

“By some metrics, the UK is losing ground: London is currently slipping further behind New York each year while other centres are strengthening,” the paper said.

New York overtook London in 2018 in a leading annual survey, the report added, noting that the US city dominates in stock market listings.

“The UK therefore needs to adopt a relentless focus on strengthening its international competitiveness to win back the prize of being the world’s leading international financial centre.”

Britain’s departure from the EU effectively closed London off from its biggest financial services customer, heaping further pressure on the race to keep up.

However, the finance ministry has already set out reforms to make London’s capital market more competitive, and TheCityUK has outlined a five-year target to help it “out-compete its rivals” by amending tax, visa and other rules.

Becoming the worldwide centre for financial data, sustainability investing, and investment and risk management will also be crucial in helping the UK overtake New York, TheCityUK added.

The total tax rate for a London bank is 46.5 per cent — 13 per cent higher than a New York bank. But persuading the government to cut taxes on finance as it tries to mend a COVID-sized hole in the economy could be challenging, as will having an open door on hiring given the Brexit referendum pledged to crack down on high levels of international mobility.

The single most important issue for financial firms, according to TheCityUK CEO Miles Celic, is being able to hire globally.

“In conversations we have had with government, I think that is something that is absolutely understood,” he told reporters.

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