Osborne to Enhance Competitiveness of UK’s Financial Sector
Chancellor George Osborne is planning ways to make UK’s financial service sector more competitive.
He will soon announce the re-launch of a body led by the Treasury, which will be charged with the task of promoting the financial services industry. Currently, Osborne is under pressure to reform tax structures that are having an adverse effect on the industry.
According to a recent Sky News report, the Chancellor will present new plans for the re-launch of the Financial Services Trade and Investment Board (FSTIB), which first saw the light of the day a couple of years back.
The Treasury is drawing up a list of influential personalities who would become independent directors of the board while several of its existing members will give up their positions.
It was widely speculated that HSBC Chairman Douglas Flint is one of the existing directors who would quit. However, neither the Treasure nor the bank has confirmed this fact.
Reliable sources say that the stepping down of Flint is highly likely because the bank is trying to decide if it should shift its headquarters to an offshore location. A reliable source commented that Osborne would be embarrassed if a member of the board meant to enhance competitiveness of the financial service sector turns out to be the person responsible for one of the biggest banks in the world leaving London.
Among the several factors responsible for the bank considering a change of location is the bank levy that the Chancellor introduced after the general election of 2010. HSBC is the largest contributor to this bank levy, but there is every chance of Osborne restructuring this levy in his Budget.
Osborne has been repeatedly stating that the Treasury is giving top priority to the competitiveness of UK’s banking sector. Simultaneously moves to cut down the taxes that are burdening this industry are not possible in these days of welfare cuts.
Ever since the FSTIB was launched, its representatives have included banking personalities such as Ana Botin, who is also expected to leave the board.
In March, the FSTIB’s annual report was published, in which Osborne had expressed his appreciation for the achievements of the country’s financial service sector. He had also stated that the sector has several opportunities in India.
The report stated:
The FSTIB will…consider, and potentially take forward, a coordinated government and industry effort to develop greater liquidity in infrastructure financing, and ensure potential investors have better access to suitable projects.
