Overhauling immigration rules and cutting income taxes can help London become the global centre for business, according to a think-tank.
Adam Smith Institute (ASI) head of research Sam Bowman said the Government should do more to make Britain, and London in particular, a more appealing place for people from around the world to do business.
Bowman made the comments after the think-tank’s research found Britain only takes in marginally more highly skilled workers than it loses through emigration. Highly skilled workers can help the UK avoid a pension crisis by meeting the soaring costs of an ageing population, ASI said.
“By coming to London people have been able to harness and take advantage of the opportunities available to them, making the most of their abilities. It’s great for London because the rest of us get the neighbourhood benefits of their talents,” said Bowman. “An open migratory system and not having the immigration cap, combined with a tax regime that makes London attractive, would mean we have one of the most appealing factors for large multinational companies to relocate to London.”
Bowman cited Twitter’s decision to set up an international headquarters in Dublin and not London as an example of how the capital was losing out to its rivals due to immigration rules, which make it difficult for companies to hire in from abroad.
He continued: “The real takeaway from the report is that if we want the City to be a source of wealth and to generate a recovery or economic growth, then we need to make it an appealing place for people around the world to do business. The only way London can maintain the edge and a competitive advantage is by making it possible to unlock people’s talents from around the world – it can make London the global centre. But it’s not going to happen until we look at migration rules.”
The Government should also consider cutting income taxes to help London compete with its global economic rivals, Bowman said. Zurich and Malta are among London’s European competitors who offer lower tax rates or more generous disclosure rules for hedge funds.
Bowman said: “Our message is that the only way the Government can make Britain more competitive, assuming the immigration cap doesn’t go ahead, is by cutting taxes. That’s not just the 50p tax, it’s also the 40p and 20p taxes that apply to everybody.”