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Osborne To Relaunch Finance Promotion Board

Osborne To Relaunch Finance Promotion Board

George Osborne will announce on Wednesday the relaunch of a Treasury-led body charged with promoting the UK's financial services industry, even as he comes under intense pressure to reform the structure of taxes affecting the sector.

Sky News has learnt that the Chancellor will set out alongside his Budget new plans for the Financial Services Trade & Investment Board (FSTIB), which was established two years ago.

The Treasury is drafting in a number of heavyweight City figures to sit on the FSTIB as independent directors, with a number of the existing members expected to step down, according to insiders.

There was speculation on Wednesday night that Douglas Flint, the chairman of HSBC, was among the FSTIB directors who would step down, although the bank and the Treasury both declined to comment.

Sources said that such a move appeared likely because HSBC is conducting a review of whether it should relocate its headquarters offshore.

A decision is due to be made by the bank by the end of the year, and a source acknowledged that it would be "embarrassing" for Mr Osborne if an adviser on the UK’s competitiveness as a financial services centre was responsible for one of the world's biggest banks quitting London.

One of the principal issues influencing HSBC’s evaluation of its future domicile is the Chancellor’s Bank Levy, which he introduced soon after the 2010 General Election.

HSBC is by far the biggest contributor to the levy in its current form, although there are expectations that Mr Osborne will announce some form of restructuring of it in the Budget.

In recent weeks, he has referred repeatedly to the banking industry’s competitiveness as a priority for the Treasury, although any move to reduce the overall tax burden on the industry is unlikely at a time of substantial welfare spending cuts.

The FSTIB's other City representatives since its establishment have included Ana Botin, who has moved from running Santander UK to its Spanish parent and is also considered likely to step down from the Treasury body.

In the FSTIB's annual report published in March, Mr Osborne praised the “many successes” of the UK financial services industry, and highlighted opportunities for the sector in India and infrastructure finance as important areas for the next year.

"The FSTIB will…consider, and potentially take forward, a coordinated government and industry effort to develop greater liquidity in infrastructure financing, and ensure potential investors have better access to suitable projects," it said.