TheCityUK responds to the Chancellor of the Exchequer’s Budget 2016

Chris Cummings, Chief Executive, TheCityUK, said, “This Budget is delivered against a backdrop of uncertainty – increasing global risk, moderate UK growth and the forthcoming referendum on the UK’s membership of the EU.

While leaving the EU might not be ruinous for the UK economy, our evidence has shown that Brexit risks damaging UK-based financial and related professional services – an industry that contributes more tax than any other sector in the UK, employs nearly 2.2 million people right across the nation and enables growth across the economy. Given our role in underpinning the UK economy, a risk to the stability of our industry poses risks to the stability of the wider economy and the return to the stronger economic growth that we all want to see.

On competitiveness: Maintaining and enhancing the competitiveness of the UK as a place to do business should be at the heart of the Government’s agenda. It is pivotal in ensuring lasting economic growth and job creation. With that in mind the Chancellor’s commitment to lower corporation tax to 17% by April 2020 – the most competitive tax rate of any G20 country – and to introduce a simplified Business Tax Road Map shows the rest of the world that the UK is open for business.

One of the reasons international firms invest in the UK is our reputation for having a stable and predictable tax environment. These announcements reaffirm this reputation and are a boon for UK competitiveness and our ability to continue to attract high levels of foreign direct investment. Financial services attracts more foreign direct investment than any other sector and creates jobs across the whole of the UK.

Similarly, the increase to personal tax allowance thresholds is another welcome boost for UK attractiveness. It helps those who will benefit to save more money and it supports our ability to attract and retain the best global talent. 

On infrastructure: The Chancellor’s commitment to spending more on infrastructure projects right across the UK – including the development of plans for Crossrail 2 in London and high-speed rail in the north of England – is essential to ensuring future job creation and spurring longer-term economic growth.  Similarly, the investment in Trans-Pennine, East-West links sets a hopeful precedent for the new National Infrastructure Commission’s plan to review the strategic infrastructure associated with the high-growth cities found in the Cambridge-Milton Keynes-Oxford corridor.

As noted in our Budget representation, commitment to providing investors and consumers with certainty; increasing the Government’s own capacity to deliver projects; and finding effective ways to attract and maintain new sources of finance are all essential to ensure a strong infrastructure pipeline. The creation of the National Infrastructure Commission and the acceptance of its first three recommendations shows that this part of the system is off to a positive start. We look forward to examining the National Infrastructure Delivery Plan when it is published.

On the Northern Powerhouse: Spending to draw up plans for high-speed rail in the north is a positive step in helping to move forward the agenda of the Northern Powerhouse. With over 400,000 people employed in financial and related professional services across the north of England, and cities such as Leeds, Liverpool and Manchester being major regional industry centres, we urge swift progress on modernising the rail route right through from Liverpool to Leeds. This will not only boost connectivity between these major northern cities, but will also help better promote the Northern Powerhouse as a regional hub with global ambitions.”