10,000 finance jobs lost since Brexit?
25th Sep 2017
10,000 jobs have already moved out of the financial services sector following the EU referendum vote.
We’ve seen no evidence for this. A survey predicts 10,000 jobs might be moved from the UK if we leave the single market. We don’t know what kind of Brexit deal will be made and the survey has additional limitations.
“Quite apart from the actual [Brexit] divorce bill, 10,000 jobs have already moved out of the financial services sector.”
Vince Cable, 21 September 2017
This is not what the source of the figure says. The 10,000 jobs figure is based on predictions for future jobs moving out of the UK, and on a particular model of Brexit that isn’t yet certain. There is no evidence that 10,000 jobs have already been removed from the financial services sector since the Brexit vote.
So where did the figure come from?
The Liberal Democrats told us that Mr Cable was referring to an article published in the Evening Standard. The Standard, in turn, said that Miles Celic, chief executive of TheCityUK—the representative body for the financial and professional services industry—“confirmed estimates that 10,000 jobs have already gone” since Brexit.
TheCityUK told us that Mr Celic discussed this figure on the Today Programme last week. During the programme presenter Dominic O’Connell said the latest estimate from Reuters was that 10,000 people had left the financial services sector since the referendum.
This is incorrect—the Reuters figure is a prediction of the number of jobs the sector might be lost or move overseas in future if the UK leaves the single market.
Mr Celic was then asked if the 10,000 figure sounded correct: he responded it didn’t feel “in the wrong ballpark” because TheCityUK had commissioned independent analysis in 2016 that suggested at least 35,000 jobs could be lost as a result of Brexit.
The source of the 10,000 figure makes no claim about how many jobs have gone since Brexit
The recent Reuters survey of leading financial service companies based in the UK suggests that around 10,000 jobs in finance could be moved from the UK or created overseas if the UK no longer has access to the single market after Brexit.
These aren’t jobs that have already moved out—in fact there’s no specific time period provided for when these jobs will be lost by.
Separate ONS figures also show that the number of jobs in financial service activities in June 2017 was at a similar level to June 2016, when the Brexit vote occurred. Even though these figures don’t tell us what causes changes in job numbers, there’s little evidence yet for the large job reductions suggested by the 10,000 figure.
A recent survey of businesses can’t give us a definitive picture of future job losses
The survey itself also has limitations—it can’t give us a definitive prediction of what will happen to finance jobs during and after Brexit.
The survey, carried out in recent months, spoke to 123 of “the largest and most internationally focused financial firms in Britain”. Only 39 companies employing around 350,000 people actually gave responses on their staffing plans. No information was provided by some of the biggest employers in the sector, including Bank of America and Credit Suisse.
This could suggest that the figure may be much higher if all firms were interviewed, but the picture could also be affected by the type of Brexit which ultimately occurs.
It depends on the kind of Brexit deal that is reached
The key question here is whether the UK retains access to the single market, and therefore banks based there are able to carry on “passporting”. This means that a firm authorised in one EEA member state can “carry on permitted activities in any other EEA state”.
The survey found that many British and American banks currently use London as their passporting base, and so British withdrawal from the single market would require moving jobs out of the UK in order to establish an “EU hub” elsewhere.
The uncertainty over the shape of Brexit means that many survey respondents said they were choosing to operate a “two-stage contingency plan”. This broadly means moving “small numbers to make sure the requisite licenses and infrastructure are in place”, before taking a final decision on how many jobs to move once the Brexit picture is clearer.
Uncertainty could also be stalling banks’ action on jobs
Two reports by the firm Oliver Wyman predict a much higher level of potential banking job losses. One from 2016 predicted up to 35,000 finance jobs could be lost in a "hard Brexit" scenario, with the figure rising to as much as 75,000 once “additional activities” related to the finance sector, such as insurance, were factored in.
Another report from the same firm in 2017 similarly predicted up to 40,000 finance job losses, without specifying how many extra could be lost due to "additional activities".
The 2017 report also finds that uncertainty over the shape of Brexit is limiting banks’ current action. It found that many banks are currently focused on the low-cost move of applying for licenses in other EU jurisdictions, rather than making firm decisions on moving jobs.
So in any case, it’s too early to judge what banks’ response to Brexit will be in terms of jobs moving abroad.
Update 31 October 2017
We've added more information about previous estimates of potential job losses from Oliver Wyman.
This fact check is part of a roundup of BBC Question Time, factchecked. Read the roundup.