News story

Leaving the EU would be an ‘act of economic self-harm’ for the South West’s financial services industry, says UK City Minister

Harriett Baldwin sets out how a vote to remain in the EU will protect financial services jobs and promote economic growth.

The Economic Secretary will dispel the myth that leaving the EU would simply be a problem for the City of London and that the wider UK financial sector in places like Bristol and Swindon would not be affected.

She will highlight the importance for staying in the EU to a sector that plays a crucial role in South West’s economy. Between them the financial and insurance sector added over £7 billion to the South West’s economy in 2014. The industry supports almost 170,000 jobs in the South West, with 91,000 people working directly in financial services and another 78,000 working in associated professional services.

The Economic Secretary will visit both Bristol and Swindon to argue that all of this could be put at risk by a vote to leave the EU.

Economic Secretary to the Treasury, Harriett Baldwin said:

Voters in Swindon and across the country faces a fundamental choice – whether to remain a member of a reformed EU, or to take a leap into the dark.

The financial services industry in the South West continues to grow. 91,000 people employed in financial services and a further 78,000 working in associated professional services.

A vote to stay will protect these jobs and promote further economic growth across the whole of South West. A vote to leave would be an act of economic self-harm.

Bristol is a major hub with around 35,500 jobs in financial and related professional services. Major firms like Aviva, and Direct Line have operations in Bristol, as do all of the “big four” professional services firms. Younger and rapidly accelerating businesses, like Momentum Financial Technology and Triodos Bank, the Dutch ethical bank, are also now using Bristol as a base.

Swindon also boasts an a strong record in financial services with around 13,000 people employed in the industry and it plays host to the biggest building society in the UK, Nationwide.

Being a member of the EU has meant that 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.

In financial services, access to the single market helped the UK sector to export over £22 billion of financial services to the EU in 2014. This is around 33% of the UK’s total financial and insurance and pensions services exports.

New Treasury analysis shows 285,000 jobs across the UK are linked to financial services exports to the EU. 100,000 financial services jobs are directly linked to these exports, and a further 185,000 jobs are linked to the indirect demand generated in the wider economy as a result of financial services exports to the EU.

Leaving the EU would put tens of thousands of these jobs at risk across the UK.

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 direct 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.

Given the impact that a vote to leave in the EU referendum will have on the economic outlook and the ability for new start-up businesses to access the finances they need to flourish, the Economic Secretary has chosen to visit Momentum Financial Technology, a growing financial tech firm based in the heart of Bristol. Here she will speak with tech innovators at the company to discuss their views on remaining in the EU and take part in a technology-showcase of their award-winning money management tool Moneyhub.

While at Momentum, Harriett Baldwin will also talk to female employees about the challenges that women can face in gaining senior positions in financial services. She will get their views on the forthcoming referendum and discuss how the vote on the 23rd June will shape the future opportunities available to them.

The Economic Secretary, Harriett Baldwin, said:

For me – as the Economic Secretary to the Treasury and as a woman - the economic argument is clear.

Remaining in the EU will offer us and our children the opportunities we need to succeed and protect the public services we rely on now and in the future.

A record one million women lead businesses in the UK. Without unrestricted access to the EU and the 500 million customers it contains, the ability of these businesses to flourish now and grow significantly in the future will be put at risk.

If the UK leaves the EU, we will lose our influence. We will have to comply with EU laws without having a say in how they are made. Women know what it is like to be side-lined. We know that to be truly heard you have to have a ‘seat at the table’.

There are one million more women than men in Britain which means that women have real power to shape the future of our country and be the decisive voice in this referendum.

In Swindon, the Economic Secretary will visit a base for one of one of town’s largest international businesses, Zurich Insurance. The global insurer has around 55,000 employees, including 7,000 in the UK, serving customers in more than 170 countries. Zurich is a big player in the UK market. They have 15 offices across the UK, including their Swindon office, which has over 1,000 employees and is the headquarters of their UK Life business. New Treasury analysis published on Monday showed that the South West’s economy would be tipped into recession and unemployment could rise by 45,000 in the region.

The analysis shows that a decision to leave the EU on the 23rd June would cause an immediate and profound economic shock across the country, including in the South West, creating instability and uncertainty which would be made worse by the complex negotiations that would follow to agree the terms of Britain’s exit from the EU and its new relationship with the rest of Europe.

It is clear the South West benefits from the UK’s membership of the EU with around 250,000 jobs in the region linked to the UK’s exports to other EU countries.

This is on top of the region having benefited from £3.4 billion of inward investment from EU members over the last 5 years, with some 130 foreign investment projects in the area by EU member states, creating or protecting over 13,000 jobs.