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How competitive is the UK as a financial services hub?

The total tax contribution of the financial services sector this tax year (ending March 2012) amounts to half of the total expenditure of the NHS. However, an estimated £20bn of the £63bn tax contributions (11.6% of total receipts) is mobile and could move away from the UK. TheCityUK’s Competitiveness Report, written with McKinsey & Company has revealed an ‘amber warning’ light last year over the attractiveness of the UK as a location to set up and grow a financial services business. In the report, the extent of the loss in competitiveness is measured by the changes in employment. ‘Between 2006 and 2012, 22,000 full time jobs in financial series have been lost as a direct result of relative changes in competitiveness – accounting for a quarter of the reduction in overall financial services headcount.’ The report highlighted that UK’s access to the European Union single market was a ‘core reason’ why the UK is chosen over other rivals. It is critical for the UK to retain its position as a global hub for financial services and compete with locations in Asia and America. In their December newsletter CEO Chris Cummings wrote that in 2013, TheCityUK will urge policymakers to create the confidence to solidify the UK’s position as the pre-eminent location for financial services. Tomorrow’s City is a programme Tomorrow's Company is running with CMS Cameron McKenna which will explore how the City of London will achieve future success. How will talent and money be brought together to deliver financial products and services, what will drive and secure risk adjusted returns, how can the City manage volatility and how do we build a City that is competitive and that we can be proud of.

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