Brexit: Financial Services (European Union Committee Report)

Lord Shutt of Greetland Excerpts

Thursday 9th February 2017 Lords Chamber

[Lord Shutt of Greetland (LD)]

My Lords, I too pay tribute to my noble friend Lady Falkner of Margravine, who has steered us through several of our deliberations over the last year or so. The report, like all those which come from our EU committees, is based on the evidence. What those of your Lordships who have not been on the committee are getting is what we have heard from other people and the questions that we have been able to put to them.

There is no doubt that financial services are a highly significant sector of the United Kingdom economy. We are told that they employ 1.1 million people, two-thirds of whom are outside London. It seems to me that 1.1 million jobs are likely to support 4 million United Kingdom citizens. On any basis that is significant, serious and important. I have three points to make in my contribution, which really concerns livelihoods. I will come to these in order because I want to speak of some of the people who came to see us.

First, on 19 October a man by the name of Simon Kirby, the Economic Secretary to Her Majesty’s Treasury, came to see us. The noble Lord, Lord Desai, asked him about clearing and said:

“We have had conflicting evidence about what will happen to clearing houses”.


The response from Simon Kirby was:

“There is a lot of noise about clearing. The whole of Europe, the UK included, would be worse off if that particular part of the financial services that London offers was dismantled and redistributed across Europe”.


In a further question, the noble Lord, Lord Desai, talked about clearing and Simon Kirby said:

“It is an element of the negotiations. Is it the most important element? Probably not, but it is … significant”.


That sounded complacent to me.

On 2 November we then had a visit from Xavier Rolet, the chief executive of the London Stock Exchange Group, and I quoted Simon Kirby’s evidence to him. We were aware that Xavier Rolet had earlier indicated that 100,000 jobs were at stake if clearing were to relocate. He confirmed that,

“we stand by our estimate of 100,000 jobs”.

When I pressed him a little further as to where these jobs were, he said that he would,

“provide a more detailed estimate”.

That was to happen “reasonably shortly” and so it did, in that on 11 November we had further written evidence sent from Xavier Rolet, together with an EY report that had been prepared for the Stock Exchange. He said that the report estimates that up to 232,000 combined financial and non-financial jobs throughout the UK could be lost. This was a detailed 44-page report, which sets out where those jobs are. Those 232,000 jobs suggest to me that we are talking about the livelihoods of 1 million people.

The last thing that we had was not presented to our committee but—as things keep moving—was the White Paper from Her Majesty’s Government on 1 February. Perhaps it is better to call it a grey book. In its section 8 on pages 42 and 43, there are a few paragraphs about financial services. Paragraph 8.25 says:

“In our new strategic partnership we will be aiming for the freest possible trade in financial services between the UK and EU Member States”.


So Simon Kirby’s complacency has now moved to an aim. Where is the determination? Will it come from the noble Baroness, Lady Neville-Rolfe, who I now congratulate on her new role?