Nearly two-thirds of Britain’s financial services roles are currently based outside of London, laying bare the risks to thousands of regional jobs after Brexit.
A new report by Square Mile group lobby group TheCityUK shows that 1.5 million of 2.2 million industry jobs are located outside London, with hubs like Edinburgh, Glasgow, Birmingham, Bristol, and Manchester each hosting more than 30,000 financial and related professional services workers.
Maintaining this ecosystem is criticalMiles Celic
TheCityUK chief executive Miles Celic said: “Our report reinforces the value delivered by financial and related services to the whole of the UK economy.”
International firms that come to Britain for business usually put down roots in London before expanding their operations across the country, creating a “deeper talent pool” of skilled workers that benefits both local and national businesses, he added.
“Strong regional financial centres, like Edinburgh, Manchester and Birmingham, boost the attractiveness of London as a global financial centre. Maintaining this ecosystem is critical to ensuring the UK remains a world-leading place to do business.”
US bank JP Morgan employs about 5,500 staff outside of London, including 300 in Edinburgh, 1,200 in Glasgow and 4,000 at its global technology and operations centre in Bournemouth.
Glasgow also hosts 1,200 staff from Morgan Stanley, while Belfast hosts 2,000 Citibank staff, and Birmingham is home to 1,500 Deutsche Bank workers. Overall, more than 21 UK cities have over 10,000 people employed in the sector.
The data raises concerns over how Britain’s regions will be impacted by a post-Brexit exodus of banking, insurance, accounting jobs and related positions.
However, TheCityUK report said: “The extent to which these and other firms may change their UK-focused business plans in the wake of the UK’s vote to leave the EU will depend on firm-specific business models and so is likely to vary from company to company.”
Rival financial centres like Frankfurt, Dublin and Paris are expected to siphon off some of the City’s businesses, ahead of the expected loss of passporting rights as part of a hard Brexit.
Passporting rights allow UK-based financial services to trade across the bloc without needing to apply for licences in each member state.
HSBC has said it is on course to move 1,000 jobs from its London office to France as a result, while around 4,000 of JP Morgan’s 16,000 UK staff could be shifted abroad, though a potential location has yet to be revealed.
Government coffers are expected to take a hit from the loss of financial services jobs, which in 2015 contributed nearly £176 billion of gross value added (GVA), a measure of economic growth that excludes taxes and subsidies.