2 July 2008
Speech by the Economic Secretary to the Treasury, Kitty Ussher MP, to the Financial Services Skills Council Dinner
Check against delivery
Introduction
1. Thank you, Roy, for that introduction, and thank you for inviting me to join you all here tonight.
2. Having spoken at the Financial Services Skills Council's annual conference, back in November, it does seem only fair to have the chance to get a dinner out of you too.
3. I'm also delighted to be here to celebrate the FSSC, at your second annual dinner, and all of the work that you're doing to support the development of skills in the financial services sector.
Importance of financial services skills
4. Because there is no question, certainly in my mind, just how important this work is.
5. Our financial services sector provides about a tenth of our GDP, so it really is at the heart of our economy.
6. And it also supports about a million jobs. Many of those are, obviously, based here in the City, or in Canary Wharf - but there are jobs in this sector up and down the country, and certainly in my constituency of Burnley.
7. So we need our financial services sector to succeed, because it's good for the country - and I'm pleased to say that it is thriving.
8. London is the world's leading international financial centre, and the world's best. And Scotland is one of the world's leading fund management centres too.
9. There are, of course, many factors behind that success. But it wouldn't be possible without the hugely talented workforce that we have in our financial services sector - those million people, working day in and day out.
10. And the workforce that we have in the future will have a huge part to play in determining whether London can maintain it's position at the top of the table, and whether our financial services sector can continue to thrive.
11. So this does have to be a priority, and we can't be complacent about it.
12. And that's why I'm so pleased that we have the Financial Services Skills Council focused on exactly that.
13. I want to come on to talk about the role that the FSSC is playing in a moment. But of course there is a role for Government here, too - and I'd like to say a few words about that first.
Developing home grown skills
14. There are two sides to what we're doing to get the skills we need.
15. Firstly, we have to invest in developing the home-grown skills that the City will need in the future.
16. You'll all know that one of our priorities has always been education - or rather that three of our priorities have always been education, education, and education.
17. And we have increased our investment in education across the board - last year, education spending was £10 billion higher than it would have been if we'd kept it at the same proportion of national income as in 1997.
18. But to get the sort of workforce that we need for our financial services sector, we're obviously talking about higher education and skills.
19. We have committed to spending an extra £2 billion in this area in two years time, compared to last year.
20. That is going to make a huge difference in moving towards our aim of having a world-class skills profile by 2020 - and it will help us to make sure that we see more adults qualified to degree level; more young people in higher education; and more adults in the workforce developing higher skills.
Attracting skills from abroad
21. I think we have to realise, though, that the highly skilled workforce we've got now is as much to do with immigration as it is to do with education.
22. Here in London in particular, the UK attracts people from all over the world - and the City relies on their expertise and talents.
23. And so the second part of what the Government is doing is to make sure that we continue to attract the brightest and the best.
24. And that is one of the reasons why we are redesigning our immigration system, and introducing one that is based on points, like in Australia.
25. Tier 1 of that system, for highly skilled migrants, has already gone live. And that means that if people have enough points, based on their skills, experience, age and past earnings; and if they can speak English, and support themselves; then they don't need a job offer to come to the UK.
26. I know that this is a hugely important issue for the financial services sector. And so I was very pleased to be able to sit down this morning with representatives of the City, and with Liam Byrne, the Minister for Borders and Immigration, to discuss exactly how we can make sure that we can get the talented workers that we need in.
27. I'm pleased to be able to announce that we agreed at that meeting to work together - the Treasury, the Home Office and the City of London Corporation - to produce a document setting out specific details, including case studies and examples, of how the points based system will apply to workers and employers in the City.
28. The Home Office have also announced today that they have agreed to work with the US Government to develop a swift channel that will speed up travel between the UK and the US, for trusted people who travel between the two countries regularly.
29. And we will continue to work together on these issues, Government and the industry - and make sure that we can continue to attract the people that we need to complement our home-grown workers.
Exporting UK financial services skills
30. I should say, though, that financial services skills isn't one-way traffic into the country.
31. There will, of course, be skilled British workers who choose to work abroad - whether permanently or temporarily.
32. But the UK is also a major exporter of financial services training and qualification, through private sector organisations like the Chartered Institute of Management Accountants, CIMA, and the Securities and Investment Institute, the SII.
33. And the industry is also establishing - with some funding from the Government - a new International Centre for Financial Regulation, the ICFR, which I'm delighted to say Barbara Ridpath has agreed to lead.
34. That will become a centre of excellence, sharing knowledge and skills in financial regulation, and promoting cutting-edge training both here and across the world.
Role of the FSSC
35. So, by supporting the ICFR; by continuing to make sure that we can attract skilled workers from abroad; and by investing in education and skills, we are playing our part in making sure that we've got the skilled workforce that our banks, insurance firms, investment funds, and all the other parts of our financial services sector will need for the future.
36. But as I said before, we can't do this on our own - and there is an important role for the Financial Services Skills Council.
37. Tonight is a chance to celebrate some of the Council's successes - like the leading role it played in the creation of the National Skills Academy for Financial Services, which is now up and running in London, Manchester, Norwich and Leeds - and which has had 3,000 learners through its doors in its first year.
38. The FSSC also produced a report for the Chancellor's High Level Group on City competitiveness last year, identifying the skills gaps in the wholesale financial services sector in the UK - including languages, cultural awareness and numerical skills.
39. That was an important report, and it led to the creation of a working group, led by the FSSC, which has been tasked with addressing these issues.
40. But of course that also reminds us that there are some big challenges ahead.
41. Just last month, I attended a lunch to mark the publication of the London Market Skills Review of the wholesale insurance sector, where there was an interesting discussion on the areas that need improvement.
42. And there is a need for improvement - because the supply of skills isn't keeping up with demand.
43. At the same time, we're also facing increasing competition from abroad. India produces about 2½ million graduates a year - and China's colleges and universities were expecting nearly 5 million people to graduate this spring.
44. That means that if we're going to keep our skills profile competitive, and in fact make it world-class, we have to keep moving - and to do something about the issues that the FSSC's report highlighted in the wholesale sector.
45. So, there is plenty more work to be done. And it is important work too - as I've said, the development of financial services skills here in Britain has huge implications for the future success of the sector, and so of our wider economy.
Conclusion
46. So thank you, Roy, Teresa, and everyone else at the FSSC for all of your work that you're doing on this.
47. Tonight is a chance to celebrate everything that you're doing, and that I'm sure we'll do together in the future to tackle the challenges we face.
48. It's a pleasure to be able to talk about that this evening - and of course to be the warm up act for the comedians that you've got coming next.
49. I won't keep you waiting for them any longer; thank you for listening.