{"id":59074,"title":"City policy chief warns new financial sector taxes would undermine UK growth","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2026-09-15T06:22:59+00:00","modified":"2026-09-15T06:22:59+00:00","canonical_url":"https://stockmark.it/city-policy-chair-new-taxes-on-financial-services-would-threaten-our-p/","markdown_url":"https://stockmark.it/city-policy-chair-new-taxes-on-financial-services-would-threaten-our-p.md","json_url":"https://stockmark.it/city-policy-chair-new-taxes-on-financial-services-would-threaten-our-p.json","category":"UK Economy","categories":["UK Economy","UK Tax"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/2026/09/city-policy-chief-warns-new-financial-sector-taxes-would.png?fit=1536%2C1024&quality=80&ssl=1","format":"news","language":"en-GB","content":"The City of London Corporation has warned that introducing new taxes on the financial and professional services sector would threaten the United Kingdom’s economic prosperity. Chris Hayward, the policy chairman of the City Corporation, stated that the industry is prepared to assist the Chancellor in delivering growth across all regions of the country. However, he cautioned that the sector’s capacity to generate record tax receipts would be severely compromised if its competitiveness is further damaged by additional fiscal measures. This message comes as the government prepares for the upcoming Budget, a period in which difficult choices regarding public finances are anticipated.\n\nHayward highlighted the significant contribution of the financial and professional services sector to the national economy. The industry currently generates 323 billion pounds in economic output and contributes more than 110 billion pounds annually in tax, representing approximately 12 per cent of all UK tax receipts. The sector supports 2.5 million jobs, with two thirds of these positions located outside of London. These roles are distributed across cities such as Edinburgh, Leeds and Cardiff, indicating that the sector is a national rather than solely a London-based phenomenon. Hayward noted that roughly one in every 13 workers in the UK owes their employment, directly or indirectly, to this industry. He emphasised that the City Corporation has worked with successive governments to achieve these outcomes, citing the Mansion House Accord as a prime example of successful partnership. Under this agreement, 17 of the country’s largest pension providers committed to channeling up to 50 billion pounds of long-term capital into UK businesses and infrastructure by 2030.\n\nDespite the sector’s strong performance, Hayward warned against complacency. Recent research indicates that overseas competitors are gaining ground in the competition for foreign investment. Consequently, his primary message to the Chancellor is to avoid actions that would harm the sector’s competitive position. He specifically identified a windfall tax on banks, other sector-specific taxes, and the potential loss of the VAT exemption for financial services as measures that would imperil the industry’s ability to contribute to the economy. Hayward pointed out that UK banks currently face a total tax rate of 46.4 per cent. This is higher than the rates in Amsterdam at 42.2 per cent, Frankfurt at 38.9 per cent, Dublin at 28.9 per cent and New York at 27.9 per cent. He argued that any additional sector-specific tax would widen this gap, creating a real possibility that firms would choose to expand in Dublin or Frankfurt instead. Such a shift would result in the UK foregoing the associated jobs, investment and tax receipts.\n\nTo foster sustainable growth, Hayward proposed several measures that the government could adopt. He suggested that a credible pathway to reform taxation on UK equities, including the eventual removal of stamp duty on shares, would be a positive first step. Additionally, he urged the government to support institutions designed to attract investment, such as the Office for Investment: Financial Services. This body acts as a concierge service for firms considering where to allocate capital and requires longer-term funding and increased headcount to function effectively. Hayward also highlighted the importance of enabling infrastructure, mentioning InvestConnect, a new AI-enabled infrastructure investment platform developed with the City Corporation. Set to launch later this year, the platform has already secured founding partners including Cornwall Council, the Scottish Government and the Liverpool City Region Combined Authority. This initiative aims to provide investors from North America, the Gulf and Asia-Pacific with direct access to real projects in these regions, thereby creating jobs and growth far beyond the Square Mile.\n\nFinally, Hayward called for a holistic approach to the investment landscape, utilising levers beyond fiscal policy. He stressed the critical importance of planning, noting that the Square Mile alone will need to accommodate almost 900,000 jobs by 2050. This growth will require substantial new commercial floorspace, much of it in tall buildings. Hayward expressed hope that the delay to City Plan 2040, which is designed to enable this growth, proves to be temporary. In conclusion, he acknowledged the fiscal reality that necessitates tough decisions but urged that the forthcoming Budget should empower businesses to drive growth for people across every region and nation of the UK."}