Amid all the talk of the likes of Goldman Sachs and other banks moving staff to the continent, it’s worth considering these words from the senior executive at a top five global investment bank.
“We want to be in London,” he told a private event in the capital this week.
“We’ll be in Europe because the regulations demand it. But our staff and their families want to be here. London will continue to be our international headquarters.”
The message could hardly have been clearer: London was the bank’s choice as a global financial centre; an increased presence on the continent a requirement post-Brexit.
But as is so often case, and amply evidenced in this debate, perspective is always an early casualty of fear.
“Goldman Sachs to start exodus of London staff,” ran one newspaper headline on Wednesday, after its international chief executive said the bank would take extra office space in Frankfurt and Paris.
Richard Gnodde had told CNBC that the move would involve “hundreds of people as opposed to anything much greater than that”, and would also see Goldman hire in other EU countries too.
The bank employs 6,000 staff in the capital and isn’t alone in looking at post-Brexit planning right now. Any that wasn’t would be negligent.
But where perspective is needed is around numbers. And there is no evidence so far of an exodus – either under way or planned – from a city whose resilience was again proven this week.
Some 5,500 UK firms benefit from passports for trading financial services in the EU, so the potential is there for the loss of a significant number of jobs, depending on the eventual agreement reached.
Indeed London Stock Exchange chief executive Xavier Rolet has estimated 100,000 jobs would be at risk if clearing were to relocate from London.
Meanwhile EY estimates supplied to LSE warn that 232,000 combined financial and non-financial jobs throughout the UK could be lost.
Those worst-case-scenario numbers are significant, but consider the bigger picture.
The UK financial services industry employs 1.1m people, two thirds of whom are based outside London.
And the loss of back-office jobs in the capital is a long-standing trend. The UK’s challenge is to ensure they go to the likes of Birmingham, Manchester and Leeds, rather than Frankfurt, Paris and beyond. The EU’s challenge is to ensure they don’t go to New York.
And London’s challenge is to ensure that it continues to lure other industries, not least tech.
• Did we plan it? We’ll say we did. This year’s Brexit-themed EG Peter Wilson Lecture takes place on the day Article 50 is triggered.
The Rt Hon Lord Darling of Roulanish, Alistair to his friends, will deliver the lecture on the subject of the post-Brexit economy on 29 March.
Chancellor of the exchequer during the global financial crisis, Lord Darling will deliver the third in our agenda-setting annual lecture series at Fitzwilliam College, Cambridge. Held in memory of Peter Wilson, the former owner of EG and honorary fellow of Fitzwilliam, the event will also launch another round of scholarships which Peter Wilson’s estate is awarding to talented graduate students wishing to study land economy at the college.
Click here to register to join us at this free-to-attend event, which will add much needed perspective to an impassioned debate.
To send feedback, e-mail damian.wild@egi.co.uk or tweet @DamianWild or @estatesgazette
