Ben Wright, the Telegraph's Group Business Editor has written a piece (HERE) about the banking sector that is quite scary. For all the opprobrium directed at the City and the disaster that was 2008-9, banking generates a lot of money for the treasury in taxes of all types (income, stamp duty, VAT, etc) and any diminishing of it will hurt the entire nation.
Loss of tax revenues will either reduce public services or cost the rest of us much more in tax.
Mr Wright points out a couple of interesting things. Firstly, foreign direct investment in 2015 amounted to 18% of GDP with two thirds coming into financial services. We need this to counter the current account deficit and keep us solvent. He says this is the "kindness of strangers" that Mark Carney spoke of before the referendum, but it is in fact the kindness of foreign banks. This will certainly be at risk.
Secondly, banks are beginning to move staff into the EU already. They can't afford to wait and see what kind of deal we get and take the risk a rival will beat them to it. For every 1000 staff moved, the treasury loses £100 million a year in taxes. The stock exchange has estimated 100,000 jobs could go eventually. That's £10 Billion in lost taxation and £32.5 Billion in lost output. These are big numbers and in our most successful sector. Not easy to replace.
Prospering like never before.
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