Britain’s City minister has agreed with estimates that about 7,000 jobs moved from the Square Mile to the EU after Brexit, but added that the financial services sector “has not experienced the haemorrhaging” of roles that many had anticipated.
John Glen, economic secretary to the Treasury and City minister, said on Tuesday that he broadly accepted calculations by consultancy group EY that thousands of financial services jobs had been transferred from the British capital to rival European cities due to the UK leaving the bloc.
Speaking before the House of Lords European affairs committee, which is holding an inquiry into the UK-EU relationship in financial services, he added that the figures were similar to those used by the government and Bank of England.
Initial estimates from EY had put job moves much higher, at 7,500 in October 2020, and a prediction of 12,500 in 2016.
“I broadly accept the 7,000 figure . . . [But] we’ve got to remember there are 2.3mn jobs in the financial and professional services sector,” said the minister.
Glen described this number as a “modest movement of people to the EU”, adding that the financial services sector was in “good shape” given the overall growth in jobs in the Square Mile over the past few years. Tax receipts from the sector, he added, were also proving resilient.
“I don’t think it’s inevitable that we’re going to see lots more jobs move [in future],” he added, in response to questions over whether Brexit would take longer to play through the sector.
Glen also said that he was not committed to deregulation of the City of London for its own sake. The Treasury has embarked on a wide range of initiatives to improve regulations for financial services firms, including an overhaul of the Solvency II insurance sector regulation.
Glen agreed that the government was “taking things forward on lots of fronts”, but added that he was also not “consciously trying to deregulate, or annoy or excite . . . I’m just trying to do the right thing for the UK financial services sector.”
Changes were being made to rules inherited from the EU, but he pledged that the UK would maintain “high standards” of regulation that would make it competitive around the world as London contends against other capitals for business.
He said: “I have never sought to describe the UK’s financial services policy as being one that would be based on deregulation, a race to the bottom or somehow trying to secure competitive advantage by removing regulations.”
Financial services bosses have warned that the end of free movement of people could hit their British operations. But Glen defended the government’s position, pointing to new visas for skilled workers.
He added that there would be further announcements around a “global talent network [and] how to bring in talent from key jurisdictions that are important to the growth of fintechs”.
Glen said no EU financial capitals were yet able to compete entirely with London. “The key point is that none of them have the holistic set of qualities that London has, and the supporting infrastructure and what I would describe the ‘hub’ qualities.”
He indicated that there was no progress by Brussels on granting any additional equivalence of rules governing financial services, which would allow free access between EU-UK markets.
“Obviously it’s a matter for [them] to determine when and what to do with equivalence,” he said, adding that the UK had made the necessary steps to do so.