Industry leaders meet Treasury officials to discuss how London can be more competitive
London insurance market heavyweights were expected to meet the Treasury on Wednesday for talks over tax and the competitiveness of the London market.
Lord Levene and other senior figures met Treasury officials to argue for reforms to improve the London market, with tax breaks being a central feature.
However, the government ruled out cutting corporation tax the day before the meeting – which was seen as a blow to the industry’s lobby effort. It argued that Britain’s move to a 28% was competitive and against Bermuda and other low tax centres.
On Tuesday, in a statement Lloyd’s said: “These reported comments from the Treasury are based on a consultation that has not been shared with us yet. We look forward to seeing this consultation and discussing these findings with the Treasury.”
Tax experts said there was still scope for the working group to argue for tax breaks.
Andrew Green a partner at accountancy firm Mazars said insurers could argue for special tax treatment of claims reserves and regulatory capital.
The summit focused on research compiled by Levene, Grahame Millwater, COO of Willis Group and Ace European Group’s Andrew Kendrick, on ways to modernise the London market.
It comes amid concerns about the growth of other financial centres such as Bermuda.
The government was also expected to report back on the Treasury’s analysis of the insurance sector and potential for further reforms.
Key issues were thought to include technological reform and e-trading, people and skills and regulation.
The Treasury is understood to have found that said the insurers establishing a presence in more than one jurisdiction has had little effect on the UK’s primary insurance market and does not appear to be a trend.
A source said: “London remains a market where people want to come to place risk.”
A treasury spokesperson said the department is committed to ongoing consultations with the insurance industry on tax.
As Insurance Times went to press it was unclear what the working group would present to government.