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UK chancellor Rachel Reeves will on Wednesday be urged to rip up rules that hinder the recruitment of foreign talent by financial groups, as the City of London joins calls for a more open approach to migration to boost growth.
Reeves will meet bosses of Britain’s leading banks as part of efforts to draw up a new industrial strategy, but will be met with an increasingly common refrain: the economy needs more highly-skilled workers.
“The UK is in a contest for high-quality talent,” said Miles Celic, chief executive of TheCityUK lobby group. “It’s important to continue to reduce red tape around bringing high-quality individuals to the UK.”
The demand for more overseas talent poses a problem for Sir Keir Starmer’s Labour government, which is also promising to cut migration and is facing fierce political pressure from Reform UK.
Reeves and Jonathan Reynolds, business secretary, are drawing up an industrial strategy covering eight sectors, including financial services, as a cornerstone of their growth policy.
But officials working on the strategy said that a number of sectors, from banking to tech and life sciences, make similar demands from ministers. “There are big issues around skills and visas,” said one official.
This month the House of Lords science committee said the UK was committing “an act of self harm” because high visa fees and an inflexible immigration system deters science students and early career researchers.
Reeves will host the bosses of banks including HSBC, Lloyds, Barclays, Santander UK and NatWest to discuss a strategy for boosting financial services, with migration, regulation and tax high on the agenda.
Among the requests will be for Reeves to accelerate reforms to the “senior managers’ regime”, rules introduced after the 2008 crash which are said to have deterred some bankers from coming to London.
The regime has since 2016 forced senior executives at banks, building societies and credit unions to take personal responsibility for infractions if they had not taken “reasonable steps” to prevent them. Penalties range from fines to bans.
UK Finance, which represents 300 firms in the sector, said the regime captured “large swaths of people and compliance has become quite burdensome”.
The Treasury said it would respond to a “call for evidence” on reforming the regime shortly and that it would “deliver streamlined regulation that limits burdens on industry while maintaining appropriate protections”.
It added: “We will consult on whether to replace the current certification regime so that firms still ensure that relevant staff are fit and proper, but that the requirements are less burdensome.”
UK Finance said it was also pressing Reeves to carry out reforms to bank taxation, streamline regulation and require social media, tech and telecoms companies to share with banks the burden of tackling fraud.
The industrial strategy, due to be finalised in the spring, covers eight sectors: financial services, professional and business services, life sciences, creative industries, defence, digital and tech, advanced manufacturing and clean energy industries.
Reeves said at the World Economic Forum in Davos last month that she would “look again at routes for the highest skilled people”, singling out visas in the areas of artificial intelligence and life sciences.
Businesses can hire staff from overseas under the Home Office’s skilled worker visa scheme; there were 50,900 main applications between April and December 2024, 6 per cent fewer than in the same period in 2023.
Last year, HSBC was among big UK companies to withdraw job offers to foreign graduates after the previous Conservative government raised the salary threshold for skilled worker visas to £38,700. Labour has retained the higher threshold.
Reeves, announcing her dialogue with the financial services sector last month, said: “I am committed to working hand-in-hand with the industry to make sure that our plans are informed by those who both provide and utilise financial services.”