UK needs to compete more keenly on pay, says minister

By Huw Jones and Iain Withers

LONDON (Reuters) - Britain needs to compete more keenly on pay for top bosses to retain talent as part of efforts to bolster the financial sector in the face of global competition, City Minister Andrew Griffith said on Tuesday.

Britain is updating market rules after Brexit stoked concern over London's ability to compete with New York and European Union financial centres in attracting top company listings.

Top executives in the United States are typically paid more than their counterparts in Britain even as shareholders in the UK push back against executive pay packets, a politically sensitive issue during a cost of living crisis that has triggered industrial action in a number of sectors.

"Remuneration here needs to be competitive. We need to attract the brightest and best to these shores - the last thing we want to do is drive them away," Griffith told an event held by banking industry body UK Finance.

British parliament is in the process of approving a law that gives regulators powers to revise a welter of financial rules inherited from the EU, with Britain having already said it will scrap a cap on banker bonuses.

"2023 is going to be a huge banner year of delivery in improving our financial markets," Griffith said.

INCENTIVES, ATTITUDES AND CULTURE

There is also need to look at incentives, attitudes and culture to boost the sector's global attraction, such as by channelling pensions money into UK-based investments, Griffith added.

UK Finance earlier set out recommendations for improving the country's capital markets and data to help change what it called the "narrative" that London lags global rivals on several fronts.

"It debunks the simplistic idea that companies do perform better in the US," Griffith said.

UK Finance called for the 0.5% stamp duty charged on share purchases to be scrapped to reduce the cost of investing and boost wider participation.

"It is time that we reinvigorated the markets here to make them even more attractive and just as dependable and safe," said David Postings, chief executive of UK Finance.

Postings also called on the government to fast-track issuance of digitised UK government bonds to make them more accessible to a wider range of investors.

The recommendations will feed into a broader report being compiled by the UK Capital Markets Industry Taskforce, which is due in the autumn.

(His copy has been refiled to remove an extraneous word in the headline)

(Reporting by Huw Jones and Iain Withers; Editing by David Goodman)