Financial services sector worth £66bn
Open Europe, the pan-European Think Tank and campaign group with offices in London and Berlin, published a truly awesome paper this week highlighting the true costs to the UK economy as a whole of the financial services passport.
You can read the full report ‘How the UK’s financial services sector can continue thriving after Brexit‘ in PDF form.
Authored by Vicenzo Scarpetta & Stephen Booth, it looks at the risks/costs for the three core industries : Banking, Asset Management and Insurance. Brexit24 would like to highlight three key facts from this report :
Tax revenues £66bn
In 2014/5 [financial services] provided £66bn – 11% of overall tax revenue.
The report highlights also the sheer scale and value to the UK of the sector. A message that has been lost in recent years with banking scandals, bonus caps and the like. The report says :
The financial services sector is a significant source of revenue for the Government. In 2014/5, it provided £66bn – 11% of overall tax revenue. Significant chunk of this £30bn, came from employee’s national insurance and income tax contributions.
Brexit24 has noticed that many normal folk find it hard to get a grip what this sort of money looks like. Since the £350 million a week campaign bus message was so effective, the NHS England budget for the same period was £117.229 billion, so we’re talking about half of the annual English NHS budget!
Employment 1.9 million
Even more fascinating, is the data on employment that the sector provides. The report says that up to 1.9 million people were employed by financial services and cites ONS data to prove that, quite differently from public perception, 66% of these positions were outside of London.
12.5% of all revenues would be at risk
Open Europe’s report cites data from ‘EU Scenarios and the UK Financial Centre‘ published by Oliver Wyman in 2014 :
The study estimates that, in 2015, about a quarter (£40-£50bn of a total of £200bn) of all revenues of the UK-based financial services sector came from ‘international and wholesale’ business related to the EU. The report also estimates that, even in worst case scenario … a maximum of £20bn (40% to 50%) of the EU-linked revenue would be at risk – that is, around 12.5% of overall revenue.
Well worth the read
Sometimes, documents from think tanks and the like can be a little heavy going, Brexit24 thoroughly recommends this one. It’s well written and clearly presented with lots of graphics. If you want to get a handle on the risks ahead for the UK economy , this one is essential reading. Well done, Gentlemen!