Rachel Reeves has been warned she must act “now or never” to give Britain’s financial services a Singapore-style revamp or risk the City sliding into irrelevance.
The City of London Corporation, which represents the interests of the Square Mile, urged the Chancellor to create a financial services investment hub to make it easier for foreign investors to invest in the UK.
Chris Hayward, the authority’s policy chairman, said Singapore and other financial centres had introduced methods of fast-tracking investments to boost inbound spending from foreigners – a move the UK could copy.
The timing is significant because Ms Reeves is scheduled to deliver her Mansion House speech next week. The set piece event, where the Chancellor will lay out her financial services policy objectives, is hosted by the Corporation each year.
She is facing growing pressure from trade groups to come up with bolder solutions to lift the gloom engulfing the Square Mile.
Mr Hayward said: “This is a now-or-never moment for UK financial services. If we don’t act decisively, we risk losing our global position and the economic prosperity, jobs and innovation that come with it.
“The UK must urgently first match, then exceed these standards to remain competitive. This is an opportunity to protect and grow our future prosperity by encouraging government departments and regulators to work more collaboratively.”
It comes after the Confederation of British Industry (CBI) called on Ms Reeves to introduce significant reforms to ensure the London Stock Exchange remains competitive.
Rupert Soames, the CBI chairman, warned that London “has seen a far greater loss of domestic liquidity than other markets” as investors shun buying UK shares.
Mr Soames, who is also chairman of the FTSE 100-listed Smith & Nephew, added that London had “also seen a higher level of attrition of membership” caused by companies leaving the stock market and going private.
In recent years, the London market has suffered a string of high-profile exits, with companies abandoning listing in London for higher valuations in New York.
A number of FTSE 350 businesses have also been taken private as low valuations make them an attractive takeover target.
In her Mansion House speech, the Chancellor is expected to lay out a shake-up of mortgage rules and announce a cut to the annual tax-free cash Isa allowance.
Earlier this year, Jeremy Hunt, the former chancellor, said the UK should copy the model of Singapore in order to improve prosperity and drive economic growth.
Story ContinuesMr Hunt also urged the Prime Minister to pursue reforms to make Britain a low-tax nation that welcomed free trade.
The phrase “Singapore-on-Thames” has become shorthand for the goal of turning the country into a low-tax economy with a flexible jobs market and educated workforce.
“Countries like Singapore demonstrate, openness can still deliver excellent results. Over the last half century, its living standards have grown five times faster than ours,” Mr Hunt wrote in The Telegraph.
The Treasury was contacted for comment.
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