Regulation  

Treasury reveals dominance of UK financial services

HM Treasury reveals statistics showing how UK financial services continues to be a world leader even post credit crunch as it reviews the value of our European Union membership

In the 72-page report, which called for evidence regarding the European Union’s competences in the field of financial services and the free movement of capital, HM Treasury revealed the International Monetary Fund calculated the UK is also the largest net exporter of financial services, insurance and pensions in the world, with a trade surplus that is around three times that of any other country.

In 2012, the IMF stated UK net exports in these sectors were $67bn (£41.54bn) compared with $23bn (£14.26bn) in the US, $21bn (£13bn) in Luxembourg, $19bn (£11.78bn) in Switzerland and $9bn (£5.58bn) in Germany.

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The report also stated the UK financial and insurance services trade surplus also constitutes 63 per cent of the UK’s total trade surplus in services of £74bn.

The EU is the largest destination for UK exports of financial services, with around a third of the UK’s trade surplus in financial and insurance services in 2012 coming from trade with other EU member states – of the total £46.3 bn UK financial and insurance services trade surplus, £15.2 bn was with the EU, £14.5bn with the US and £1.7bn with Switzerland.

According to HM Treasury the UK’s membership of the EU single market is a contributory factor to this relationship, in that it has facilitated UK access to the world’s largest single market with GDP of €12,500bn (£10,590bn) and 500m people.

HM Treasury’s review will examine the EU’s competence – the powers to act conferred on it by the EU Treaties – in the field of financial services and the free movement of capital, and consider whether these powers are appropriate and are being exercised appropriately, alongside consideration of the UK’s competence and powers in this area.

The deadline for comments, which should be emailed to balanceofcompetences@hmtreasury.gsi.gov.uk, is 17 January 2014.