Leaving the EU: Financial Services

Alison McGovern Excerpts

Thursday 3rd November 2016 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

I congratulate my hon. Friends the Members for Nottingham East (Chris Leslie) and for Leicester West (Liz Kendall) on achieving this Backbench Business debate. Unsurprisingly, I agree very much with the contribution made by the latter.

I shall speak specifically about financial services outside London and the south-east. [Interruption.] I seem to have infinite time, which is fine.

I want to say three things: first, to correct an impression about who we talk about when we think of financial service; secondly, to correct an impression about globalisation and trade; and finally to correct an impression about what is required of the Government in face of Brexit in financial services and the broader economy.

As my hon. Friend the Member for Leicester West said, too often there is an easy, knee-jerk reaction when we think about financial services. People bang on about bankers, but people who work in financial services are not who we might think they are. They are ordinary working people from around the country. I was blessed to be able to find that out in person when I served as shadow City Minister for my party last summer. Several financial services companies were good enough to welcome me through their doors to shadow members of their workforce. It was absolutely fascinating. In cities, none of which was London, I sat with people working in financial services, including insurance and pensions, and talked to them about their daily lives. They worked incredibly hard serving their customers—the British public and exporting businesses.

I was struck by the story told to me by one set of workers who were recalling the global financial crisis. They were told by their manager: “Just don’t mention what you do when you go down the pub after work.” Nobody in our country should have to do that. Nobody should be made to feel ashamed of what they do. I am a Labour MP for a reason, and that is it. We should never engage in language that seeks to condemn people simply because of their employment.

I was also struck by the passion with which those in the insurance industry fought fraud and tried to get people a better deal. Those people deserve Members’ support and backing. This is not a London issue. We might call it the “City of London”, but 11,000 people in Belfast; 54,000 people across the north in Leeds, Liverpool and Manchester; 58,000 people in Edinburgh and Glasgow; 10,000 people in Sheffield; and 4,000 people in Norwich do a good day’s work for a good day’s pay and need our backing.

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[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I appreciate that the hon. Member for Wirral South (Alison McGovern) is in some difficulty because the clock is broken, but she is handling it with great competence. I have been watching. She has taken an intervention and can speak until about 2.25 pm and 30 seconds. I thank her for dealing with the matter so well.

[Alison McGovern]

Thank you, Madam Deputy Speaker. I will do my best.

I thank my hon. Friend for his intervention. I am happier to support the words of the current Mayor of London than those of the previous one, who said that no one could deny that London is the engine of our economy. In financial services, as with everything else, our regions should be on equal footing. One should not be over another. It is a fact that London has extra lobbying capacity because Parliament is located in the city, so a corrective is necessary.

The second point on which I want to correct people’s impressions is that, although the hon. Member for Wimbledon (Stephen Hammond) is right to talk about competitive advantage, which matters, when we talk about globalisation and international markets, not least in the financial service sector, we are talking not necessarily about increased trade but about increased multinationalism. Companies stretch themselves much more over borders, which is why I still believe that our membership of the European Union was important. I accept the result of the referendum, but when we have multinational companies, we need to be involved in global governance so that we can protect the people who work for them in our country. The 1,000 people who work for Santander in Bootle and the 1,000 people who work for Merrill Lynch in Chester work for global companies. They therefore need global protection and global response. I hope that goes some way to answer the points made by the hon. Member for Stone (Sir William Cash), although no doubt he will not agree.

Finally and very briefly, we need to correct the impression of what is required. Passporting is absolutely crucial, as has been described by several Members, but it is not just that. The concentration of financial services in our country’s economy has meant that London has overheated for far too long. Financial services outside London have another crucial role. Building societies and the mutuals sector have been mentioned. We need to use our financial services outside London and the south-east to partner with Government to improve infrastructure investment and investment in small and medium-sized enterprises. Forty-two per cent. of start-ups happen in London and the south-east, which is simply not good enough. That is why I ask the Government not only for passporting but for rebalancing by supporting our financial services.