London takes aim at New York with five-year financial plan

• Ambitious plan depends on tax cuts and open house stance
• TheCityUK says New York took the top spot in 2018
• Brexit and the rise of Asian financial centers increase the pressure

LONDON, Sept 7 (Reuters) – Britain needs to cut taxes on banks and make it easier to hire overseas staff, its financial and professional services lobby said on a blueprint to help London, New York be the world’s leading international financial center within five years to replace years.

Tuesday’s TheCityUK strategy paper reiterated some ideas already aired in government-backed reports and elsewhere over the past few months as the City of London seeks to reclaim lost ground after Britain’s exit from the EU.

“According to some metrics, the UK is losing ground: London is currently slipping further behind New York every year, while other centers are gaining strength,” the newspaper said.

The U.S. financial capital overtook London in a leading annual poll in 2018, it said, adding that New York dominates stock market listings.

“Great Britain must therefore put a tireless focus on strengthening its international competitiveness in order to win back the award as the world’s leading international financial center,” added the lobby group TheCityUK, which promotes the wider financial sector abroad, in the paper.

The UK’s exit from the European Union has effectively sealed off London from its largest financial services customer, which further increases the pressure to catch up.

The Treasury Department has already adopted reforms to make London’s capital market more competitive and TheCityUK has set a five-year goal for London to “outperform” its rivals by changing tax, visa and other regulations.

UK Financial Services Secretary John Glen said competitiveness is at the core of all government activity and shared TheCityUK’s ambitions to grow the financial market as freedom from the EU offered a clear opportunity.

“It’s not going to be about deregulation and a race to the bottom as some might have expected,” Glen said at a launch event for the paper, adding that people were looking for incremental rather than radical changes in capital markets.

“We can be more agile,” said Glen.

The global hub for financial data, sustainable investing, and investing and risk management will also be critical in helping the UK overtake New York, TheCityUK said.

The overall tax rate for a London bank is 46.5%, 13% higher than a New York-based bank, she added.

Glen said he recognizes that bank taxation must be competitive next to the United States and elsewhere.

The number one issue facing financial firms is the ability to hire people around the world, said Miles Celic, CEO of TheCityUK.

“In discussions we have had with the government, I think that is completely understood,” he told reporters.

Reporting by Huw Jones; Editing by Alexander Smith / Mark Heinrich

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