London - David Whitehouse has two business cards: one for
his office in London’s Shard skyscraper, the other for a rundown building in
Manchester.
Most days, the Duff & Phelps Corporation
restructuring specialist works up north in Manchester, a city better known as
the 19th-century heart of Britain’s industrial revolution than as a financial
center. A couple of days each week, he catches the 6:59 a.m. train to the
nation’s capital, just two hours away.
“We’re literally a suburb of London,” Whitehouse said.
With Brexit looming, what may be bad for London could also hurt the U.K.’s
regions. “We want Manchester to remain a key financial-services hub. We don’t want
to yield ground to Dublin, and that is a very real risk.”
Ask Britons where the majority of the country’s 2.2
million finance workers are located and most would probably say the City of
London. But two-thirds are located outside the UK banking hub in cities from
Edinburgh to Birmingham and Manchester, according to a report published Tuesday
by TheCityUK. Financial and related professional services contributed 176
billion pounds ($219 billion) to the UK economy in 2015, with more than half
generated outside the capital.
The lobby group is laying out the national scope of the
finance industry just as Prime Minister Theresa May prepares to extract Britain
from the European Union, a decision backed by every UK region barring London,
Scotland and Northern Ireland. Although the focus has been on whether London’s
finance jobs might move to Frankfurt, Dublin or Amsterdam, there’s growing
concern jobs outside the capital might also be at risk.
The industry’s reach could put May under pressure to
defend finance in the Brexit talks despite refusals from within her government
to grant it special status. A report by the British Bankers’ Association last
week estimated that 90 of the top 100 parliamentary constituencies with the
highest share of banking lay outside the capital.
“You can’t just think it’s a London issue,” said Steve
Cooper, CEO of personal banking at Barclays. “There are issues for both London
and the wider UK around Brexit, so managing the transition to whatever the
outcome will be needs to be very well considered and very well thought
through.”
Cooper makes regular trips from Barclays’s Canary Wharf
headquarters to its global technology hub in the leafy English county of Cheshire,
where 3 200 employees work in a former manor house named Radbroke Hall. The
bank invested 15 million pounds at the site, tests ATMs in an outbuilding and
runs a so-called global command center filled with monitors that resembles the
bridge of Star Trek’s U.S.S. Enterprise.
Global firms have spread staff outside London to cut
costs, and the scale of their operations can be vast. JPMorgan Chase & Co
employs 4 000 in Bournemouth on England’s south coast, while Bank of New York
Mellon has 1 300 staff in central Manchester, led by Matt Wells, the head of
global cash operations. Deutsche Bank has hundreds of investment-banking jobs
in Birmingham, while HSBC Holdings is moving about 1 000 employees to the
midlands city from London.
Brexit impact unclear
Overall, 21 British towns and cities have more than 10 000
people working in finance, according to TheCityUK. It’s unclear how many jobs
outside London might be affected by Brexit, which could depend on the deal
Britain gets for accessing the EU single market and clearing euro-denominated
derivatives.
More than a trillion dollars of Bank of America’s foreign
exchange and derivatives deals are processed daily from a quiet business park
near the small northern city of Chester. It’s the bank’s largest European
office outside London and one of three global hubs for booking trades alongside
Singapore and the lender’s home of Charlotte, North Carolina. Staff numbers
have rocketed from a handful six years ago to more than a thousand.
“Clearly London is massively important to us, but so is
Chester,” said Stephen Miller, who moved to the city as Bank of America’s
global head of foreign-exchange operations.
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From Chester to Liverpool, a distance shorter than the
London Underground’s Central Line, Andrew Morris sits behind a walnut table in
a room with a golden spyglass overlooking the river Mersey, where transatlantic
liners once departed for New York.
‘Dark arts’
“For a lot of people, finance is the dark arts,” said the
fund manager, who helps oversee 32 billion pounds at Rathbone Brothers Plc, a
firm founded in Liverpool in 1742 by a family of timber merchants who grew rich
on maritime trade. “People don’t understand the true benefits it brings us as a
nation.”
While its main office is now in London, Rathbone employs
about 500 in the Port of Liverpool Building, part of the city’s UNESCO World
Heritage waterfront. “People haven’t come to a backwater,” Morris added. “There
are highly skilled jobs here.”
Investment bank Rothschild has been in Manchester for 50
years, but traces its links back much further to Nathan Mayer Rothschild, the
first of the banking dynasty to leave the family’s Frankfurt home in the 18th
Century. He worked in the city’s then-booming textile industry before founding
NM Rothschild & Sons in London in 1810. The firm’s current leading banker
in the region, Andrew Thomas, travels into the office by tram or commutes from
Manchester Airport to client meetings as far away as Mexico City or New York.
“You sometimes come across people who don’t know
Rothschild has a presence outside London,” Thomas said, adding that the firm’s
Manchester base helps to win regional deals and can attract staff looking for a
better quality of life than in cramped London.
Reassuring Investors
There are about 215 000 finance and related professional
services roles in the North West of England, making it the UK’s biggest
location for such jobs outside London and the South East, according
to TheCityUK.
At its heart is Manchester and the city’s financial
district of Spinningfields, a miniature Canary Wharf developed after a
Provisional Irish Republican Army bomb in 1996 wrought 1.2 billion pounds of
damage. The majority of Royal Bank of Scotland Group’s 5 300 staff in the city
are based there, while Barclays and accountancy firm Deloitte also have
offices.
“Clearly, there is a degree of uncertainty,” said Richard
Topliss, a managing director at RBS based at its Spinningfields offices and
chair of the Manchester Growth Company, a development agency. “That will necessitate
work both by local and national government to reassure potential investors, in
financial services or other sectors in the UK”