McFarlane Calls for U.K. to Eliminate Financial-Center Threats

  • Taxation, levies, regulation, infrastructure are obstacles
  • The U.K. should be taking the lead in a reformed Europe

The U.K. must eliminate disadvantages that are threatening its long-term future as a financial center to create a stable environment that doesn’t stifle innovation and growth , according to John McFarlane, chairman of financial services lobby group TheCityUK, and of Barclays Plc.

Taxation, levies, regulation and infrastructure are conspiring to make the country a less attractive place to do business, McFarlane will say, according to prepared remarks for his first speech on Wednesday to TheCityUK’s annual dinner since he succeeded Gerald Grimstone in September. The U.K. should also be taking the lead in a reformed Europe, he will say.

“London is the world’s leading financial center and TheCityUK’s priority is to keep it that way,” he will say. “We need to advance our strengths and eliminate disadvantages. Staying the same simply will not cut it. The economic balance of power is heading East and the technological revolution means business must strive harder to compete. It needs the support of government to win.”

The possibility that Prime Minister David Cameron’s efforts to persuade voters to back the nation remaining in the European Union may fail has raised concern there may be an exit that would damage large parts of the financial services industry. The government’s efforts to appease voters concerned about immigration have also led it to adopt measures that hamper cross-border transfers within companies and obstruct students planning to study at U.K. universities, and have prompted complaints it is causing skill shortages.

McFarlane plans to call for the removal of barriers to intra-company transfers and to student movements, according to the remarks. A “clear majority” of TheCityUK members want to stay in Europe and they should help shape the government’s reform agenda, he will say.

He will also call for the government and regulators to review U.K. regulation to consider its unintended consequences, and the issue of levies and surcharges that apply only to specific industries, saying they may have negative implications over the longer-term that we risk realizing only when it is too late.”

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