Policy Uncertainty Tests the UK’s Competitiveness

Lee Hills, CEO

Ahead of the Chancellor’s budget on Wednesday, SolutionHub CEO, Lee Hills says the UK government’s inconsistency and incompetence has led to a growing disconnect between policymakers and industry.

Modern economies thrive when governments and businesses work together, each recognising the other’s role in creating prosperity. Where uncertainty and instability resides, businesses cannot forecast with any degree of confidence. In such conditions, it is the duty of the Board to seek solutions that provide confidence of a sound footing.

A clear example of how a lack of assurance is negatively affecting the economy is the UK. Regulation and tax policy suggest a widening disconnect between policymakers and industry. Nowhere is this more evident than in the gambling sector, where heightened enforcement and erratic tax decisions have created an atmosphere of uncertainty, forcing companies to re-evaluate their priorities.

The UKGC has significantly increased its enforcement activity in recent years, and the current Labour government’s approach to tax reform has compounded the uncertainty. Frankly, it is difficult to imagine how Labour could have handled the situation any worse. It has been an extraordinary display of inconsistency and incompetence. Undeniable, regardless of where you stand on high tax rates or various forms of wealth taxes.

Many of the policies Labour announced, or attempted to implement, seem driven less by thoughtful consideration and more by a stubborn refusal to engage with the industries they affect. These decisions end up harming the very sectors and individuals who work hard to create the wealth that sustains the economy, companies like Flutter are a prime example.

Forcing Flutter to flee

Just last week, Flutter-owned Sky Bet announced it would relocate its headquarters to Malta, a strategic reorganisation that reports suggest could cut its UK tax bill by up to £55 million a year. The company revealed that from 1 November “day-to-day commercial and marketing decision-making will take place in Malta,” although it pledged to keep a substantial UK presence, including its Leeds office.

While the official narrative cited the need to “operate more efficiently”, industry observers questioned whether tax considerations played a more substantial role than acknowledged. Tax expert Dan Neidle warned that the effective corporation tax rate in Malta might be as low as 5% compared with around 25% in the UK, potentially explaining the scale of savings.

The Sky Bet relocation is emblematic of a wider trend across regulated sectors. When domestic tax, regulatory and compliance burdens escalate, companies reassess their footprints and increasingly look abroad for more favourable conditions. In the gambling and iGaming sector in particular, several operators have repositioned functions toward jurisdictions such as Malta, the Isle of Man or Gibraltar, places with stable regulatory regimes and more attractive fiscal terms.

The move signals that regulatory-policy shift and aggressive taxation regime in the UK may inadvertently push companies away, rather than encouraging them to invest and remain headquartered domestically. If the pattern continues, the UK risks losing not just individual firms, but the associated tax revenues, jobs, and economic activity that cluster around those firms.

I don’t think the situation is quite the employment disaster some reports make it out to be, but the fact remains that certain functions are being moved to Malta. This will result in lower corporation tax and VAT receipts for the UK, as well as reduced employment-related tax revenues. Even if these changes are not catastrophic, they are the predictable outcome of creating an environment where businesses feel the government simply wants to extract more from them rather than work collaboratively.

When companies sense hostility rather than partnership, relocation becomes a rational response. We’ve already seen similar moves to Malta and the Isle of Man, and we’ll likely see more. Ultimately, we need to remember that economic decisions have real consequences. We care about tax revenue because we care about jobs and opportunities for our children. This is something everyone should be able to understand. The common ground we share that can serve as a foundation for constructive discussion.