By Huw Jones
LONDON (Reuters) – Britain must make it easier for staff based overseas to work remotely in London as the UK capital falls further behind New York on the global financial services ranking list, sector lobby group TheCityUK said in a report on Thursday.
Britain’s leading role in financial services investment faces challenges from three continents, as Singapore, France and Germany also quickly catch up.
Drivers of investment are moving beyond the “low tax, low regulation” trope to include open trade, proximity to tech providers and good quality infrastructure, said the report, the latest in a series of warnings for Britain to do more to preserve its role in the sector.
While the UK remains the largest destination for financial services foreign direct investment in Europe, some UK companies are choosing to list abroad – chip designer Arm’s New York flotation being a recent example – while European Union centres like Amsterdam compete harder with a post-Brexit Britain largely cut off from investors in the bloc.
“Britain attracted just three more financial services projects than France in 2021, 63 vs 60,” the report, compiled with law firm Freshfields Bruckhaus Deringer, said.
While some recommendations refer to existing reforms, such as tweaking insurance rules to encourage green investments, the report also wants cross-border remote working made easier.
Business visa rules should be amended to allow staff based overseas to work remotely for financial firms in Britain, and vice-versa, the report said.
“Adopting an innovative cross-border remote working system would …also support manufacturing businesses across the UK,” the report said.
EU regulators have stressed the need for local staffing in the new Brexit hubs opened by UK-based banks, insurers and asset managers in the EU.
City Minister Andrew Griffith said on Wednesday he was getting on with implementing existing reforms and many companies were proud to be listed in Britain.
(Reporting by Huw Jones; editing by John Stonestreet)
