Harriett Baldwin – 2016 Speech on Financial Centres

Below is the text of the speech made by Harriett Baldwin, the Economic Secretary to the Treasury, in Manchester on 28 April 2016.

For those of you who don’t know me, I’m the Economic Secretary to the Treasury – often known as ‘The City Minister’. My job is to make sure the UK remains a world leader when it comes to Financial Services.

But I want to make it absolutely clear from the start: my job is certainly not just about the City of London.

One of the things I’m always keen to point out is that the UK has a lot more than a square mile to offer the world of finance.

And in fact out of over 2 million people who work across the UK in financial and related services, around two-thirds of them are employed outside London.

So it’s a real pleasure to be here in Manchester today and I want to thank Matt [Wells – Site Exec BNY Mellon] and our hosts at BNY Mellon.

BNY Mellon is clearly a global company which knows full well just how much the UK has to offer – with offices across the country – from London to Poole, from Leeds to here in Manchester.

Because this is a country which has considerable strengths:

– we have a global location that allows firms to do business with Asia in the morning and the Americans in the afternoon

– we have a robust and independent legal system

– a fair and effective regulatory system

– a multicultural, multilingual workforce

– and full access to the EU single market

We can be proud of the reputation we have built as one of the best places to do business – we have more overseas financial institutions and investors choosing to do business in and with the UK than any other country.

It’s also great news that earlier in the month, the Global Financial Centres Index kept us in the number one position.

But we need to keep it that way and I’d like to elaborate briefly on three particular areas where we’re taking action to support this.

Firstly, we want our financial services industry to be the most competitive and innovative in the world.

We want it to deliver greater choice and value for customers.

So we’re delivering the 7 day Current Account Switch Service and midata, making it easier for customers to switch when they see a better deal.

We’re also helping new entrants and challengers enter the market by lowering the barriers to entry and establishing a regulatory environment which helps smaller, new firms grow.

And we’re leading the world on innovation around open bank data to provide a range of extra services to consumers.

We’re also setting the pace when it comes to financial technology, or FinTech. This is already of huge significance to our economy – last year it brought in £6.6 billion of revenue.

We’re helping it grow further with a wide range of supporting measures – from establishing an industry-led panel to lead our strategy, to creating an information hub or creating ‘FinTech Bridges’ to help our FinTech companies expand internationally.

We’re also looking at how we can best aid FinTech growth around the UK – be that through regional hubs or special envoys.

And we’re not letting our regulation lack behind the advances made in technology – and the FCA Innovation Hub’s work on this is being copied around the world.

Lastly, we are absolutely determined to invest in the skills of our workforce – and apprenticeships are at the heart of this.

The new apprenticeship levy will put the funding in the hands of employers to ensure that it delivers the training that they need.

This will help realise our commitment to significantly increase the quantity and quality of apprenticeships in England to 3 million starts by 2020.

And we’re looking at what more we can do to help more women get on in the financial services sector. Last month Jayne-Anne Gadhia, CEO of Virgin Money, published her review into the representation of women in senior jobs in the sector.

Since then we’ve launched a Women in Finance Charter – asking firms to adopt its recommendations – and if you haven’t heard of this yet, I’d urge you to look into it and sign up!

So we’ll continue to keep our regulation world class; to invest in talent; to develop areas such as financial technology, where we have a competitive advantage; to promote greater competition on the high street; and to continue to build up the strengths of all of our cities and regions.

That’s why we’re here today in the North West.

BNY Mellon is not alone in recognising that this is a great region for business.

Banks are increasingly choosing to make their homes here in Manchester.

The Cooperative Bank has its headquarters here. Barclays has over 4000 staff here, forming an essential part of their operations – whether they are supporting the bank’s infrastructure, working on product development or looking at Big Data opportunities.

There is also cutting-edge work in financial technology here.

And beyond Manchester, Liverpool has an experienced wealth, asset and fund management industry.

Chester is also a top city for financial and professional services – including for example the 2000 people employed by Bank of America Merrill Lynch.

Furthermore, the North West has excellent transport links. Manchester airport, for example, has seen rapid growth in direct long haul flights in recent years including the first direct route to China set to start soon.

And let’s not forget that the region is also within 2 hours rail commute from London and also Birmingham Airport, giving easy access to the UK’s largest international airports at Heathrow and Gatwick.

The North West is proving itself on the world stage as a great place to set up shop.

And it’s easy to see why.

Costs for businesses operating in the North West region are typically 30 to 40% lower than London, yet the region still provides the established business communities, infrastructure and quality of life that firms require to thrive.

Furthermore, it’s a region that can offer the talent and skills companies need. It’s not surprising. The North West boasts 14 universities and gives us around 50,000 graduates a year – two-thirds of whom choose to stay in the region after university.

So it is little wonder that the region’s financial services sector now has over 5,000 firms, is worth over £8 billion and already employs almost 100,000 people and counting – with Manchester alone set to create over 60,000 more jobs in the industry over the next decade.

But I think we’re all here today because we want to see the North West go even further.

That’s why I’m delighted that we are launching the North West Financial Centre of Excellence today…the fourth of an initial series of 8 UK regions, pulling out all the stops to convince companies across the world that they are the places to do business.

This has been an enormously collaborative project: the Treasury, UK Trade & Investment, and local enterprise partnerships have worked and are working hand-in-hand to promote the North West as a ‘Financial Centre of Excellence’.

And I want to thank everybody who is involved in this – I’ve been told again and again what a positive process this has been.

But particular mentions must go to Midas here in Manchester, and the Cheshire West & Chester and Liverpool region Local Enterprise partnerships; the Universities of Liverpool, Chester, Manchester, Lancaster, and Manchester Metropolitan and Liverpool John Moores Universities.

And a final thank you to TheCityUK who are helping us reach out far and wide to make our pitch on the world stage.

This project ties in closely with wider government work to help our cities and regions outside London realise their huge potential.

Our concept of the Northern Powerhouse is based on harnessing the latent power of the great cities of the North, and creating something that can compete not only with London, but with cities and financial hubs across the globe.

It’s based heavily on the work my Ministerial colleague Lord O’Neill carried out in Cities Growth Commission and beyond, which showed that the fastest-growing areas in the world all had clusters of innovative, interconnected urban regions beyond the capital.

So that’s what we want to do in the UK.

Of course, there is no monopoly on Powerhouses: we’re working closely with all our regions to create growth and build up their strengths.

But the North is where some of the most exciting things are happening.

Look at our devolution agenda.

We strongly believe in putting more power in the hands of the people who know best: the people who actually live there. That’s why we’ve been striking devolution deals with authorities in every part of England, giving local communities more power and responsibility to make the decisions that work best for them.

And last month, our Budget showed how serious we were – devolving even more powers to Greater Manchester – like the adult education budget, powers on criminal justice and powers to retain 100% of business rates.

Liverpool, too, will pilot the approach on the retention of business rates, as well as getting new powers over transport.

These are flagship leads: and it’s the North West leading the way.

Investment is an essential part of building the Northern Powerhouse – in everything from schools to science and technology, transport, digital and innovation, and culture and tourism across the region.

And, at the last Budget, we announced investment in vital transport connections – such as giving the green light to HS3 between Leeds and Manchester, spending over £160 million on improving the road network in the North, and exploring the possibility of a Trans-Pennine tunnel between Sheffield and Manchester.

With state-of-the-art transport links, with award-winning centres of research and development, with world-class skills and with a positive, can-do attitude, we can create another economic revolution here in the North West.

It is, ultimately, our ambition to end the historic North/South divide: and that will make the whole of the UK more prosperous.

I know it’s an agenda we all share and I look forward to continuing our work together to win more investment, more jobs, more opportunities and more growth for the North West – it’s not just good for this region, but for the prosperity and success of the country as a whole.