Rachel Reeves’ efforts to win favour with the fintech sector have encountered setbacks, as industry leaders criticise the government’s approach and contemplate moving their operations abroad. The Chancellor has aimed to enhance the UK’s position as a competitive hub in the global fintech landscape, but founders report a lack of “tangible action.”
According to an annual report by Fintech Founders, over a third of respondents rated the Treasury’s approach as “poor,” with 13% describing it as “awful.” Additionally, three-quarters of founders do not consider the UK a global leader in fintech.
The industry is apprehensive that the Budget on 26 November may introduce tax measures that could deter investment. Recently, an open letter from tech executives urged Reeves not to implement an exit tax on affluent individuals. A petition by the Startup Coalition warned that such a tax would discourage founders from innovating or remaining in the UK.
In September, fintech leaders issued a call to action to the government after the UK fell to fifth place in global rankings. Nearly half of founders have considered relocating their businesses outside the UK in the past year, a 6% increase from two years ago. This follows Revolut’s decision to shift its primary residency to the United Arab Emirates, despite plans to invest £3bn in the UK as part of a £10bn global expansion.
Reeves had considered Revolut as a prime candidate for a public listing as part of efforts to revitalise the City market. However, founders remain sceptical, with reports indicating recent actions have not sufficiently encouraged London listings, leading companies to favour New York. In response, the Treasury launched a ‘Scale-Up Unit’ to streamline regulatory processes and plans to collaborate with the Office for Investment and Industry to create a ‘Listings Taskforce’ aimed at attracting global businesses to the London market.
This comes after fintech giant Wise shifted its primary listing from London to New York, citing the greater liquidity and access to major US indices available on Wall Street.
Seb McDermott, co-chair of Fintech Founders, stated, “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.”
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