PwC have released their report into the tax contribution of the UK’s financial services sector, highlighting the industry's value to UK public finances. The £72.1bn tax paid is the highest total since the survey began. This makes up 11% of Government tax receipts. Other contributions made by the financial sector include:
- 7% of GVA
- 3% of the UK’s workforce – over a million people country wide
- £79bn of exports – an 18% increase from last year and a record contribution, making it the biggest contributor to the UK’s services trade surplus.
In light of the importance of this sector to the UK economy and the downgraded growth forecasts in the recent Budget, as well as welcoming progress in key areas such as housing policy, there are urgent needs as part of Brexit negotiations, to secure the future of these firms and jobs post Brexit. At his inaugural address at Mansion House, in front of the Prime Minister, the new Lord Mayor, Charles Bowman, reinforced the case that a swift and positive deal with the EU is vital to preserve the value brought by the UK’s financial and professional services both within and beyond our borders.
As December's European Council meeting it was hoped there would be a break through on future trade. Sadly it seems we are still locked in the so called divorce negotiation. We need to keep up our efforts with EU27 nations, especially Ireland, France, and Germany.
The City’s work with the International Regulatory Strategy Group (IRSG) is also bearing fruit. Recent efforts with Poland, Italy and the Netherlands, to promote the proposals made by the recent IRSG report on a free trade agreement basis for mutual market access post-Brexit are apparently being looked at favourably. The report is increasingly featuring in the UK Government's thinking, as highlighted by the Secretary of State for Exiting the European Union.
The City Corporation is strengthening the industry's Brexit messaging through a comprehensive international engagement programme. Conversations are also happening about the future UK-US trading relationship and the direction of proposed reforms to post-crisis financial regulation. With the US being the UK’s biggest single-country trading partner, reinforcing our strong relationships with America will be of vital importance.
As we look to deepen partnerships within the UK, the new Lord Mayor launched a major new UK-wide initiative – the Business of Trust programme. Building on the Corporation’s existing work to support responsible business, this initiative will explore how companies can embed responsible business practices that benefit society. Over 200 business leaders from across the financial and professional services sector attended the launch event. Continuing to work with business on this important topic will be vital in helping the sector grow its impact economically, socially and environmentally, and win back the trust of the public.