City Minister launches new initiative on the South Coast - first of 5 UK regions outside London to be marketed as financial services destinations.
Thank you. It is a pleasure to be here with you today in Bournemouth and to be speaking to you at the offices of JP Morgan, such an important investor on the South Coast, employing over 4,000 people making it Bournemouth’s largest private sector employer.
Your operation here is not just about servicing technology and operational processing here in the UK. The Bournemouth office is a key location in the company’s global franchise, supporting activity in over 90 markets across more than 40 countries.
JP Morgan has continuously invested in its business and people here in Bournemouth, most recently committing £28.6 million to install state-of-the-art communication technology. That’s great news regionally.
So why do such prominent companies choose the South Coast as a place to invest?
Well, in the words of JP Morgan’s own Chairman and CEO Jamie Dimon, “Bournemouth offers access to high-quality talent and to facilities that can support our business, not just in London, but around the world.”
This – in a nutshell – is the message we are seeking to convey to investors globally.
That UK financial services are about more than just London:
That the UK’s regions have very strong financial services offers too, and quite often are more competitive as a destination to set up.
Now, although my title is often shortened to “City Minister”, that’s a bit misleading!
My job is certainly not just about the City of London. It is about promoting financial services across the UK, and making this country a world financial powerhouse.
Celebrating success is something we don’t do enough of.
But our success as a world financial powerhouse has been fundamental to the economic recovery of the UK – and it will be fundamental to our long term growth.
We couldn’t have done it without companies such as the ones here today.
Because you are the ones that create growth. All we do is support you.
And supporting you has been a key part of our long term economic plan.
We’ve created the Financial Services Trade and Investment Board, to identify trade and investment priorities and to help UK firms pursue these vigorously across the globe.
We have championed the strategically important areas key to maintaining the UK’s position as a world leading financial centre.
For example Islamic Finance and developing London as the Western hub for RMB internationalisation.
Our strategy for the investment management industry is going from strength to strength, with more and more overseas asset managers choosing to set up in the UK.
We continue to champion the UK’s world leading insurance industry.
And we’ve supported the growth of financial technology – or fintech for short – because that’s an area where the UK can really lead.
Fintech is the future. Every year brings with it innovations which are literally game changing. The export potential is huge. So it’s our ambition to make Britain the world leader in this sector.
We have UK Trade & Investment – from which colleagues are present here today – on hand to provide practical assistance to UK based businesses who want to export.
And we’re encouraging and supporting overseas companies to look at the UK as the best place to set up or expand their businesses.
We are, after all, the most attractive destination for inward investment in Europe. And our financial and professional services sector is integral to that. Its reach and influence that extends across the world.
It boasts being the most internationally focused financial centre in the world with more overseas financial institutions and investors choosing to do business in, and with, the UK than any other country.
The UK’s trade surplus in financial and professional services is more than double that of the next largest trade surpluses recorded by the US, Luxembourg and Switzerland.
We are proud to be one of the most open economies in the world.
We have a global location that allows firms to do business with Asia in the morning and the Americas in the afternoon.
We have a robust and independent legal system.
An unrivalled concentration of capital and capabilities. A regulatory system that is effective, fair and principled.
And we have a multicultural, multilingual population which makes recruiting a workforce that much easier.
We have more cross border banking than any other financial centre worldwide.
We have Europe’s largest asset management industry and the world’s biggest insurance market.
Half of the world’s top eight international law firms by revenue are based here, as are over half of the world’s biggest accountancy networks.
And – I come back to this – it’s not just about London.
While the capital hosts the UK’s largest cluster of international financial and related professional services activity, other regions and other nations within the UK have developed (and continue to expand) their own large-scale capacity to provide such services.
Out of the 2 million people who work across the UK in financial and related professional services, two-thirds are employed outside London.
Some 20 towns and cities in the UK each have over 10,000 people employed in the sector.
Many of these regions have their own strengths built on a rich heritage of expertise.
Take the South Coast for example.
This region steeped in maritime history is now one of the UK’s most popular and economically prosperous locations.
It boasts an exceptional quality of life.
It’s well connected. The region is within one hour’s drive of a market of 18 million people and has a world-class talent pool and high quality, competitively priced office space, making it the ideal location to establish and grow a business.
These factors and many others have proved a major draw to the business community, with companies of all sizes and specialisms setting up a presence on the South Coast and making it a centre of excellence for the financial sector.
Over 2000 financial and business services companies, including 22 FTSE 100 firms, have established headquarters, major corporate centres or back-office operations in the area.
Collectively, they contributed over £9 billion in economic output in 2012/3 alone.
The presence of these companies creates major opportunities for other financial and business services enterprises looking to relocate to the South Coast. It’s a virtuous circle.
As a Government, we believe that the presence of strong regional clusters is highly important for the long-term future of the UK’s financial and related professional services sector.
It is therefore with great pleasure that I am here with you today in Bournemouth to launch the South Coast Financial Centre of Excellence initiative…
…the first of an initial series of five UK regions that we will be marketing as destinations outside of London for financial services.
In order to showcase the growing importance of these regions, my officials in the Treasury, alongside those in UK Trade & Investment, are working hand-in-hand with local enterprise partnerships and government here on the South Coast to promote these regional clusters as ‘financial centres of excellence’.
This will help us harness our collective expertise and experience to address skills, marketing and infrastructure needs – which, in turn, will ensure that the sector here on the South Coast is the best it can possibly be.
Why are we doing this? First, because there is a fantastic story to tell about regional strengths. And investors should be hearing it loud and clear.
Did you know that Hampshire employs 24 percent of South East England’s insurance industry, the largest in Europe?
Or that several global business heads – dealing with everything from securities processing to fund trustee management – are now based on the Dorset coast?
Second, so we can make the most of our existing skills - and if there are any gaps, fill them.
That’s why UK Trade & Investment (UKTI) is partnering with the National Skills Academy for Financial Services, to examine the skills needs within the South Coast centre of financial excellence.
Because the more skills we have regionally, the more businesses we can attract.
And third, because we are seeing a new trend amongst financial and professional services firms: “near-shoring”. That’s the movement of jobs either out of London or from overseas back to the UK.
Based on research carried out by EY for UKTI, having strong, internationally competitive regional financial services clusters encourages the trend of near-shoring.
Regional centres have benefited from a number of nearshoring decisions in recent years.
Examples – to name just a few – include Allen & Overy, which is moving its US and European support operations to Belfast;
Bank of America Merrill Lynch, which has operations in Chester;
Morgan Stanley in Glasgow;
Deloitte in Cardiff;
PwC in Leeds;
And Deutsche Bank, which has expanded in Birmingham. In fact I was in Birmingham just a few months ago and saw the trading floor that Deutsche Bank has opened up there. This is great for Birmingham - and great for business too.
I believe the South Coast stands to benefit enormously from being the first – and by no means the last – Regional Centre of Excellence.
I would like to take this opportunity to highlight the collaborative approach all our partners have taken. Thank you for that – everybody has remarked how positive this process has been.
And my particular thanks go to Bournemouth Borough Council and Hampshire County Council; the Universities of Southampton, Southampton Solent, Bournemouth, Portsmouth and Winchester, as well as Bournemouth and Poole; and Eastleigh colleges.
This is the first chapter of an exciting journey.
A journey which will see greater inward investment, more near-shoring activity, more opportunities, more jobs, more economic growth.
A brighter future for the South Coast, and for Britain.
I hope you are as excited by these possibilities as I am.
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