Rachel Reeves’ mission to garner favour with the fintech industry has faltered with founders blasting the government’s approach to the sector as they weigh a move overseas.
The Chancellor has attempted to ramp up the UK’s status as a competitive hub in the global fintech ecosystem, but founders have said they are yet to feel “tangible action”.
Over a third said the Treasury’s approach had been “poor” whilst 13 per cent branded it “awful,” according to an annual report compiled by industry group Fintech Founders.
Three-quarters of founders also said they do not think the UK is positioned as a world leader in fintech.
The industry has feared the Budget on 26 November could introduce a batch of tax measures that will dampen investment.
A letter from tech bigwigs including Revolut and Clearscore, warned Reeves earlier this month not to impose an exit tax on wealthy individuals.
A petition by the Startup Coalition warned “an exit tax would not only tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all”.
Reeves eyes fintech listings as reforms fall flat
In September, City AM reported that fintech leaders had sent a rallying cry to the government after the UK slipped in global rankings to fifth place.
Nearly half of founders said they had considered relocating their business outside the UK in the past year – a figure six per cent higher than just two years ago.
It follows the boss of London-born fintech juggernaut Revolut abandoning his main residency in the UK in favour of the United Arab Emirates.
The move came shortly after Revolut said it would pump £3bn into the UK as part of a £10bn global expansion plan.
Reeves had eyed Revolut as a top listing candidate amid attempts to galvanise fintech firms for a public offering to rejuvenate the City market.
But founders have remained pesimistic on these plans, with the report stating recent action “hasn’t gone far enough to encourage London listings and turn the tide on companies choosing to list in New York over London”.
As part of new plans the Treasury launched a ‘Scale-Up Unit’ as a singular regulator point of contact for businesses in the scale-up phase in a bid to speed up regulator responsiveness.
The government is also set to work in tandem with the Office for Investment and Industry to establish a ‘Listings Taskforce’ to attract “the best and brightest business from around the world” to float in London.
It follows a major hammer blow to the London Stock Exchange after fintech darling Wise ditched its primary listing in London in favour of New York earlier this year.
Wise cited the deeper liquidity offered on Wall Street as part of the move, as well as the potential to access major US indices.
Seb McDermott, co-chair of Fintech Founders, said: “This isn’t misplaced optimism – it reflects their ability to innovate and adapt, even in challenging conditions.
“These are exactly the entrepreneurs the UK needs to drive growth, and they deserve an operating environment that matches their ambition.”