The speech made by Simon Kirby, the then Economic Secretary to the Treasury, on 11 October 2016.
Good Morning everyone.
Thank you for inviting me to speak here today.
And I want to congratulate City and Financial Global, the Corporation of London and the CityUK, and other organisers and sponsors, for holding such a timely event.
Because it doesn’t matter what industry you’re working in. There’s one question every single business sector is wrestling with, and that’s what our exit from the European Union will mean in practice.
And I know there are some concerns among the financial services sector and I’ve listened carefully to Charles’ 5 points [Charles Bowman – City of London].
People are asking whether the UK will be able to maintain its reputation as a world-leader in financial services once we’ve left the EU? Whether we’ll still be able to keep and attract the very best talent? Whether this industry will be consulted about what is the very best deal for Britain and what it would look like?
And the reason I wanted to come here today, is to make very clear, that the answer to all three of these important questions, is a resounding yes.
So let me kick off with that first question – can the UK still be one of the best financial centres, anywhere in the world, even if we’re outside the EU?
Well let me say this is an absolute priority for the government. This sector is hugely important to the British economy. It is the world’s largest exporter of financial services, insurance and pensions exporting £63.7 billion.
And across the country, over 2 million people have jobs in this and related industries – and it really is across the country, with the vast majority of these jobs actually outside of London. And it is important to every single part of our great country.
But what I want to remind you – as we will remind the world – is that being in the EU is simply not the biggest strength we have to offer. Standing in this building makes that point very clear to me.
What we can offer in the UK, is all the services the industry needs – in one place.
And we’ve got a lot of strings to our bow.
We’ve got our hugely respected legal system.
We have world-leading business and support services.
We have a multilingual workforce. And we have a great time zone for doing business across the globe.
We have some of the best universities in the world.
And we have a financial system that we’ve spent the last 6 years making more and more resilient – as illustrated for example, by the capital requirements for the largest banks which are now 10 times higher than before the crisis.
And another great skill we have here in this country, is that we don’t stand still.
We’ve been steadily developing our capacity in this industry across the whole UK.
So the success of the square mile is now being seen in the regions across the country, which we’re working to promote as financial centres of excellence in their own right inextricably linked to London and important across the whole world.
And we keep moving towards the future in terms of new innovation.
Look at the exciting use of technology in this sector!
We should all be proud of the fact that London was recently declared the very best place in the world to set up and run a FinTech firm – a sector that last year generated almost £7 billion in the UK.
So we have a lot to offer and a positive story to tell.
We have a positive story to tell and we have all the talents to keep offering the financial products and expertise that our global customers require.
And while we are rewriting our relationship with the EU, we will also be working hard to retain our reputation for British excellence in this industry.
Now I know that for many of you a key part of retaining that reputation, is retaining the talent that we have.
So let me turn to the second question many of you are asking, which is about our ability to keep and attract the best people to the UK’s financial services industry.
And there are two parts to that question.
Firstly, concerning the rights of EU nationals already here within the industry. We fully expect that the legal rights of EU nationals already in the UK will be properly protected. Because they make a huge contribution to our country, as well as our financial services industry. And we’re confident that we’ll be able to reach an agreement protecting the rights of EU nationals here, as well as our citizens in Europe.
But the second part of the question is about making sure we can attract the right skills and the people to our financial services industry.
The Prime Minister has made it clear the Britain we will build after Brexit is going to be a global Britain. So it’s the time now to be bold, the time to build a new confident role for ourselves on the world stage. And that means continuing to be a place which can attract the very best workers coming from abroad, while at the same time making sure we keep developing our home-grown talent of the future. It’s a balance between the two.
And in response to the third question – about how much the views of the financial services industry will be taken into account as we lay the groundwork for a successful Brexit.
Let me be very clear, ladies and gentlemen. We want to secure the very best possible deal for this country – across our industries, and across the UK. 2.2 million people, £67 billion in tax income. We want the very best deal for financial services. But we cannot do this alone.
It’s always important that government and industry talk to each other.
But now it is more important than ever so we can meet the challenges and take advantages of the opportunities, yes opportunities, ahead effectively.
So we need to hear your perspectives from the financial services sector.
We will listen to you. We will work hard to understand your issues. And we will weigh this up as we consider our position before opening up negotiations with the EU. And the process has already started. You’ve told us, for example, about the importance of market access for this industry.
We know that if the UK is to have a passporting regime, that we will need a regulatory regime that is comparable and well-harmonised with the countries into which we are passporting.
And I think we are in a strong place to achieve this with Europe: starting a new relationship at a point when we have shared the same rules for so long and had huge economic integration.
You’ve also told us you’re worried about market disruption and the risks to financial stability when we leave the EU.
And so we will push for a solution that means an orderly transition – that neither disrupts how financial services are delivered, nor importantly drives up costs.
So my message to you today is to keep talking to us, to keep sharing your views, and to keep working with government in this spirit of constructive collaboration.
To conclude, we know the path ahead won’t always be easy.
There’s a lot of work ahead for all of us.
And we know that we must expect some turbulence- some bumps in the road- as we negotiate our exit from the EU – with article 50, the mechanism to withdraw, set to be triggered by the end of March at the latest next year. But we’ve worked hard to strengthen our economy, and we approach this period from a position of strength. So we are confident that we can weather any storm that comes our way.
And as I started with three questions, let me end with three promises to you here today.
First, that we are going to keep on doing what it takes to see the UK’s financial services industry remain a world leader.
Second, that we are going to keep on making this a country which is competitive and open for business.
And thirdly, that the government will keep fighting to get the best possible deal for British business, and make Brexit a success.