Business

Thousands of financial services jobs in Belfast at risk from Brexit says lobby group

Tens of thousands of jobs are under threat in the City in London - as well as Belfast - following Brexit, a report says
Tens of thousands of jobs are under threat in the City in London - as well as Belfast - following Brexit, a report says

LEAVING Europe will lay bare the risk to hundreds of jobs in Northern Ireland's £2 billion-a-year financial and related professional services sector, a new report warns.

The study by lobby group TheCityUK shows that 1.5 million of 2.2 million industry jobs are located outside London Square Mile, with Belfast hosting 18,000 of those jobs - including 2,000 in Citibank - and the north 32,000 as a whole.

Around 9,000 people in Northern Ireland are employed in the banking sector alone, although that figure has been in constant decline over the last decade.

The financial industry represents around 4.4 per cent of the north’s total employment (that rises to more than 11 per cent for Belfast) and contributed 5.6 per cent, or £1.94 billion, of its gross value added in 2015.

TheCityUK chief executive Miles Celic said: "Our report reinforces the value delivered by financial and related services to the whole of the UK economy."

International firms that come to Britain for business usually put down roots in London before expanding their operations across the country, creating a "deeper talent pool" of skilled workers that benefits both local and national businesses, he added.

"Strong regional financial centres, including Belfast, boost the attractiveness of London as a global financial centre. Maintaining this ecosystem is critical to ensuring the UK remains a world-leading place to do business."

Northern Ireland continues to build on its reputation for excellence in a number of key sectors, including legal services, financial services and information technology,the report found.

It is also an important centre for middle- and back-office financial services activities and its financial services technology sector is especially strong.

The majority of employment in the industry (17,887 staff) is based in Belfast, which accounts for around a half of Northern Ireland's workforce, with financial and related professional services contributing 11.4 per cent the city value.

The data raises concerns over how UK regions will be impacted by a post-Brexit exodus of banking, insurance, accounting jobs and related positions.

But TheCityUK report said: "The extent to which these and other firms may change their UK-focused business plans in the wake of the vote to leave the EU will depend on firm-specific business models and so is likely to vary from company to company."

Rival financial centres like Frankfurt, Dublin and Paris are expected to siphon off some of the London businesses, ahead of the expected loss of passporting rights as part of a hard Brexit.

Passporting rights allow UK-based financial services to trade across the bloc without needing to apply for licences in each member state.

HSBC has said it is on course to move 1,000 jobs from its London office to France as a result, while around 4,000 of JP Morgan's 16,000 UK staff could be shifted abroad, though a potential location has yet to be revealed.

Luxembourg has reportedly emerged as the frontrunner on a short-list of five sites - including Malta, Dublin, Frankfurt and Paris - for a potential EU subsidiary for Lloyd's of London.

The move could see more than 100 jobs at the insurance market shifted from London to the continent.

Government coffers are expected to take a hit from the loss of financial services jobs, which contributed nearly £176 billion of gross value added (GVA) - a measure of economic growth that excludes taxes and subsidies - in 2015, TheCityUK said.