The UK risks being placed on the ‘blacklist’ by international businesses due to the instability of its regulatory and taxation regime, panel at the Scottish National Party (SNP) conference has heard.
The meeting was also told there a hard Brexit could send some financial services firms out of business.
Thomson Reuters global head of government relations Nick was speaking at the fringe event hosted by TheCityUK. Asked by broadcaster and journalist Keith Aitken, who chaired the panel, what his one request would be on behalf of the financial sector to chancellor Philip Hammond (pictured) on a simplified tax system, Collier said ‘stability’.
‘When you’re working with international businesses, your finance directors have all got blacklists of countries that have unstable regulatory regimes, unstable political regimes, and unstable tax regimes. Unfortunately, I think the UK is starting to slip into that.'
With the chancellor due to deliver his next Budget on 22 November, thoughts have turned to what revenue-raising measures he will announce. Hammond's spring Budget announcement to raise the rate for class 4 National Insurance Contributions was later abandoned, depriving him of the £2 billion it was expected to raise over the next five years.
Collier said: ‘The financial services sector is also worried about being used as a cash cow, obviously with the bank levy, insurance premium tax, stamp duty in the UK, and financial services is already the most highly taxed sector.’
Collier is part of an international regulatory strategy group which is focusing on the retention of single market access.
He said: ‘The research we did a year ago talked about up to 35,000 jobs going in the first wave, so by 2019. That’s probably half what the long run number might look like if we don’t get the right access deal. That’s what we might call a hard Brexit. But this is very concentrated in the wholesale sector, so reinsurance, investment banking, securities trading, investment advice, capital markets activity, all those things that the UK is very good at.
‘There is no trade deal on earth that gives financial services cross-border access, apart from the European single market. So even the best trade deals elsewhere - Canada, you have CETA - CETA doesn’t give you cross-border access for financial services. We are very worried in the services sector generally about taking away access to the single market.’
Collier expressed concern about the fate of smaller businesses without an established plan B.
He added: ‘There are some firms who have 10 or 20% of their business in the EU. Most of your average British firms haven’t quite worked out what the implications are.’