LONDON — The importance of Britain’s financial services industry is underlined in a new report which found that it remains the UK’s largest exporting industry, its largest tax-paying sector, and one of its biggest employers.
The report, from a financial services lobby group called TheCityUK, found that financial services contribute 11.5% of total UK tax receipts, employ 7.3% of the UK’s working population, and run an annual trade surplus of around £72bn — greater than all other exporting industries combined.
While a previous report from TheCityUK hailed Brexit as a “once-in-a-generation opportunity” to ditch the “straitjacket” of EU trade policy, there is widespread concern among business leaders about its potential impact upon financial services, particularly the loss of “passporting” rights for banks and insurance firms if Theresa May pulls Britain out of the single market.
One Brussels think-tank estimated that Britain’s financial and professional services industries could lose up to 30,000 jobs and at least €8 billion (£6.8 billion) in revenue each year once Britain leaves the EU.
The report also found:
- The sector is highly productive, with the gross value added (GVA) per employee close to £79,500 compared to the national average of £52,000;
- The sector’s trade surplus of around £72bn, greater than all other exporting industries combined;
- While the City of London remains the heart of Britain’s financial services, two-thirds of the 2.2 million UK workers employed in the sector are employed outside London;
- Over 21 UK towns and cities each have over 10,000 people employed in financial and related professional services.
Miles Celic, chief executive of TheCityUK, said: “UK-based financial and related professional services is fundamental to a prosperous economy, both at a national and local level. The industry is a major employer providing high value, high productivity jobs right across the country.”
He added: “Financial and related professional services impact our daily lives, helping us to safely and securely make payments, buy a home, save for the future and manage risk. It is also a key attractor of inward investment and generates much-needed export income to offset the UK’s deficit in trade in goods.”