TheCityUK defends UK's international competitiveness in response to consultation by HM Treasury

On 14 April 2011 we submitted a response to HM Treasury's consultation a new approach to financial regulation: building a stronger system. Our response emphasises the need to preserve the competitiveness of the UK as an international financial centre.

We believe the absence of competitiveness from the proposed statutory objectives of the new bodies is a fundamental oversight, compromising the attractiveness of the UK as a centre for financial and professional services. By neglecting the need for competiveness, these objectives put the UK at a disadvantage against other jurisdictions where this is included.

Our response calls for an international coordination committee to be established to develop criteria conducive to effective international coordination, along with further consultation between the Government and financial services firms during the formation of these proposals. Companies looking for new destinations from which to develop their global operations in any financial centre look for future stability and predictability to run their business. Measures announced by the HMT paper serve to compromise the competiveness of the UK's place as a global leader, generating economic costs derived from instability and uncertainty.

It is critical that Britain maintains its lead, not just across Europe but globally, as new financial hubs threaten the UK's competiveness and long-term economic prosperity. Therefore, we believe the new UK bodies should ensure greater UK engagement at a European level, given the weight of regulatory work derived from Brussels. Steps should be taken to ensure this occurs at an earlier stage to facilitate agendas and influence proposed outcomes to further the interests of the UK.

Chris Cummings, CEO of TheCityUK comments:

"A stable, certain and transparent regulatory environment is critical in helping Britain increase its competitiveness within the global economy and continue to make the UK more attractive as a destination to do business. There is a clear need to drive changes to the regulatory regime in addressing the shortcomings highlighted during the financial crisis, and recent steps taken in the Budget and the Plan for Growth by the Government have correctly identified the need to develop a business environment that facilitates economic growth as the top priority.

"This can serve to strengthen rather than erode the UK's reputation as the leading destination to do business, and ensures it stands on an equal footing with other jurisdictions around the globe. Therefore, it is imperative that the UK maintains its leading position by taking charge of its future, rather than responding to an agenda that is not our own."