Why being in the European Union is good for jobs in the UK's financial services sector.
1. Access to the EU Single Market has been a significant factor in the UK becoming a major global financial centre
As a member of the EU the UK has full access to the Single Market –a market of over 500 million customers and an economy over five times bigger than the UK’s. The single market for financial services is particularly well developed and includes something called the financial services passport.
Passporting allows a financial services firm that runs out of the UK to set-up a branch of their firm in another EU country, or sell their services to another EU country on the basis that they’re authorised to do so (and regulated) by the UK. Companies in countries that don’t have access to the EU Single Market, like Switzerland and the USA, set-up subsidiaries in the UK so that they can get a passport.
2. Around half the world’s largest financial firms have chosen to base their European headquarters in the UK
In 2014, the amount of investment in the UK’s financial services sector, by companies based across the world reached £280 billion - 17% of this was from the EU.
Across all sectors of the economy, almost three quarters of foreign investors said the UK’s access to the EU market was an important factor behind the attractiveness of the UK as a destination for investment.
3. The UK’s world-leading financial sector provides jobs across the country
The financial services sector in the UK employs over 1 million people with around two-thirds of those jobs outside London.
Other major hubs include Edinburgh, Glasgow, Belfast, Manchester, Leeds, Birmingham, Bristol and Cardiff. And major international firms such as JP Morgan, Deutsche Bank and Bank of America have chosen to set up operations in towns and cities such as Bournemouth, Birmingham and Chester. JP Morgan employs 4,000 people in Bournemouth alone, making it the largest employer in Dorset.
4. In 2014 the UK exported over £22 billion worth of financial and insurance services to the EU
The UK’s full access to the EU Single Market makes it easier and cheaper for UK financial services companies to sell their services to the other 27 EU countries, helping create jobs as a result. Outside the EU, the UK would not be able to offer the same access to the Single Market unless the UK continued to follow EU rules that it would no longer have a say over.
5. 285,000 jobs across the UK are linked to financial services exports to the EU
New Treasury analysis shows 100,000 financial services jobs are directly linked to exports to the EU, and a further 185,000 jobs are linked to the indirect demand generated in the wider economy because of those exports.
6. EU membership gives the UK influence over EU financial regulation and allows it to participate in initiatives that will help businesses of all sizes get the finance they need to grow
The government strongly supported the EU’s Capital Markets Union project and continues to play an active role in developing it. This EU initiative will make it easier for smaller businesses in the UK and across the EU to access the finance they need to grow.