Could the UK really lose 75,000 finance jobs post-Brexit?
Dr Victoria Bateman, lecturer and fellow in Economics at Gonville and Caius College, Cambridge, says YES.
Can the UK remain a global financial capital? That’s ultimately the question, as any finance sector job losses will be determined by whether London can retain its cherished status. And it can only be answered by identifying the sources of the City’s success.
These are: geography, stable institutions, and the benefits of agglomeration, including the deep pool of skilled workers in and around London – talent being the key driver of success in financial services. While geography is fixed, the other two factors cannot be taken for granted.
The UK’s role as a global financial capital has a long history that could help insulate it. However, history shows how quickly leadership can change – especially once the snowball effects that facilitate success start to go into reverse. In the sixteenth century, Holland challenged Italy. By the eighteenth, the UK challenged Holland. More recently, New York has challenged London.
Until now, the City has managed to hold on. The question is whether it can continue to do so this time. And if it can’t, expect those jobs to move.
Ruth Lea, economic adviser to the Arbuthnot Banking Group, says NO.
Assuming that we still have a Conservative government in place, pursuing reasonably business-friendly policies, the Bank of England’s 75,000 lost jobs after Brexit looks far too pessimistic.
A recent survey by Reuters, based on answers from 39 companies employing at least 350,000 people, suggested that 10,000 jobs could go in the next few years if a “hard” (no deal) Brexit happens, which seems a far more realistic number. Frankfurt was the most popular destination with Paris a distant second. Moreover, JP Morgan and UBS, to name but two, have drastically scaled back the number of posts they intend to move from London in recent months.
Granted, there will probably be some job losses when we leave the Single Market and lose the benefits of the “passport”. No job losses are welcome.
They would, however, surely be mitigated if there is a trade deal and the Reuters figure could be an over-estimate. Meanwhile, London will continue to benefit from growth in non-EU markets. London is, after all, a global financial centre.