08 November 2007
Speech by the Economic Secretary to the Treasury, Kitty Ussher, MP, at the Financial Services Skills Council Conference, London
Introduction
1. It's a pleasure to be here to give the view from Government of the importance of skills, and financial services skills in particular.
Importance of skills
2. And let me start very simply by saying that we see the skills agenda as hugely important.
3. We know that investing in skills gives everyone the chance to make the most of their opportunities, and their talents. Opening up opportunity has always been at the heart of this Government's aims - from improving education, to transforming the welfare to work system, and to reversing the rise in child poverty that we inherited, and driving it down.
4. And in the face of the competitive challenge of an ever more globalised world economy, it's not just that we want everyone in Britain to make the most of their opportunities and talents - but that we need them to. That's particularly the case here in London, and in the financial services industry that's centred down the road in the City.
London's strength
5. London is the world's leading international financial centre - the global leader in international bonds, derivatives and foreign equities, and home to more foreign banks than anywhere else.
6. And its position was reinforced by the Global Financial Centres Index published at the end of September, which showed that London had increased its lead over New York in the last six months.
London's skilled workforce
7. It's not just the headlines of that report that are encouraging - it's also the detail. The Index puts London top for business environment, and for people - which it defines as the availability of skilled human capital in a flexible labour market.
8. We know that the City's workforce is one of the major attractions for a business deciding whether to come here - and that's something to be proud of.
9. But we can't be complacent about London's overall position - we have to work hard to make sure the City stays competitive, and stays ahead.
10. And as part of that, it's important that we aren't complacent about London's skilled workforce - and that we recognise how it has developed.
11. One of London's main strengths has always been its internationalism, and its openness - it's one of the most multicultural, and welcoming, cities in the world, and that helps us to attract the talents and skills that we need. Nearly 30% of jobs in London are filled by people born outside the UK, including a quarter of senior managers in financial and business services, and the City relies upon workers from almost every country in the world.
12. We have to recognise how important that internationalism is to London's success. We're doing that through the points-based migration system we're introducing next year, and by providing the certainty on the taxation of non-domiciles that the City has been asking for - and introducing a system that won't deter people from coming to work here for a short period of time.
13. And we'll continue to welcome people who bring the skills and talents that we need to Britain.
14. But we also have to raise our game at home, and ensure that our education and skills systems are tailored to the needs of our economy.
Action to improve skills
15. That's something we understand very clearly - and I'd like to come on now to talk about what we're doing about it.
16. As you'll all know, we asked Sandy Leitch to review the UK's skills profile, and our future skills needs. He set out an ambition, which the Government has adopted, for the UK to have a world-class skills profile by 2020 - and at the CSR a few weeks ago we made getting ourselves on track to achieve it one of our top priorities for the next three years.
17. We also provided extra investment to do it, with an additional £2 billion a year on higher education and skills in England by 2010-11.
18. We're prioritising our investment towards those that need it most - the lowest skilled and the furthest from the labour market - because that's where there are the most serious market failures to address.
19. I've talked about London's highly skilled workforce - but alongside them London is also home to relatively high numbers of people out of work. One of the ways to tackle that, both here and in the rest of the country, is to support them to improve their skills, gain qualifications through Train to Gain, and progress in work, including through the Apprenticeships provided by the Skills Council.
20. But I know that to create a strong future workforce for the City, intermediate and higher level skills also need to be a priority - and so meeting our targets will mean more adults qualified to degree level, more young people in higher education, and more adults already in the workforce developing higher skills.
21. Achieving that will require more than our investment alone: it needs a shared sense of purpose. While government can provide support to the most disadvantaged individuals, at higher skill levels the returns for employers and individuals are greater - and so it's right that they should invest alongside government.
Financial services skills
22. To ensure that strong workforce for the City, we also need to ensure that financial services firms in the UK can continue to access the specific skills they need.
23. In April, the employer-led Skills Academy for Financial Services was launched at the Treasury, to provide training that ranges from basic financial literacy through to the development of work-based learning and executive-level skills.
24. The Financial Services Skills Council also produced a report in May on the skills gaps in the wholesale financial services sector, which was presented to the Chancellor's High Level Group on City competitiveness - and I'd like to thank the Skills Council for their work on that.
25. The report highlighted specific gaps - languages, cultural awareness, and quantitative and numerical skills - and the Skills Council, higher education sector, industry, professional bodies and Government, including the Treasury, are seeking joint solutions to them through a working group that met for the second time on Monday.
26. One of the other gaps identified in the report was compliance, and regulatory skills - and in the current climate, we know that regulatory skills are more important than ever.
27. That's why, at the High Level Group meeting in May, the Government and private sector agreed to jointly fund the creation of an International Centre for Financial Regulation, to provide research and training for industry practitioners and regulators from around the world. Mervyn Davies, Chairman of Standard Chartered, is leading the project through to start up, and his committee will provide an update on their progress at the next meeting of the High Level Group on Wednesday.
Conclusion
28. So we are taking action - to improve the UK's skills profile at all levels and across a range of skill-sets, and to ensure that the City has access to employees with the more financial services skills that they'll need.
29. These are challenges that require long-term solutions, and I support the Financial Services Skills Council in working to meet them.
30. I hope that you will also work with them. Because together I'm sure we can succeed, and because as I said at the start, in the face of the economic and competitive challenges that face Britain, and the City in particular, we can't afford not to make the most of everyone's talents.