Yahoo Finance City firms quicken pace to leave London over Brexit whitepaper
Financial firms are expected to press on and even accelerate their Brexit contingency plans following the publication on Thursday of the government’s proposals for the UK’s trading relationships after the country leaves the EU.
The proposals – set out in a 100-page white paper – have already been described as a “real blow” for the financial services sector as they acknowledge that the ties between the UK and the EU will be loosened after Brexit and that the crucial “passporting” regime which allows firms to trade seamlessly across countries inside the bloc ended.
A tally of job announcements compiled by the City of London Corporation, the local authority which covers much of the financial district, shows that between 5,000 and 13,000 roles could move as a result of Brexit. Some 1,600 roles are confirmed as moving.
Inga Beale, the chief executive of Lloyd’s of London, said the insurance market was now “full steam ahead” on its plans to open a subsidiary in Brussels and that she expected other firms to be “moving at pace”.
Omar Ali, UK financial services leader at consultancy EY, said that firms would be pressing on with their plans to ensure they can keep trading after Brexit. The white paper had not given firms any more certainty about life after March 2019, when the UK is scheduled to leave the EU. EY’s tracker of jobs estimates that about 10,000 UK staff that could potentially relocate to Europe.
“The news that financial services firms really await is confirmation of an implementation or transition period scheduled to begin in March, and that we are not heading towards a no deal scenario,” said Ali.
Consultants at consultants PwC have said that while the proposals were credible, firms should still plan for a hard Brexit, where the UK crashes out of the EU without a deal.
Andrew Gray, head of Brexit at consultants PwC, told Yahoo Finance: “Many of the firms that need to [move jobs] have not yet done so. What we are expecting is when people come back from their summer holiday there will be a flurry of activity.”
“The current white paper has not changed my clients’ views, especially in financial services. They are all pushing ahead with the plans to be ready by 29 March 2019,” said Gray.
Dame Beale, speaking to the BBC, said of the white paper: “Professional and financial services are really not catered for at all and it’s very disappointing. We make up basically 80% of the economy of the UK.
“Lloyd’s is to open a subsidiary in Brussels so we will be full steam ahead, and many other banks, insurer and other financial services firms will be moving at pace now.”
Last week it emerged that US bank JP Morgan had asked “several dozen” staff in the bank which employs 16,000 in the UK had been asked to move in preparation for Brexit. Its chief executive Jamie Dimon has warned that up to 4,000 roles could be at risk and this week told an Italian newspaper that he did not “fully understand” what Brexit would mean because of the lack of detail.
Goldman Sachs, another major US bank, has already relocated between 50 to 100 jobs out of the UK to various centres around Europe although is pressing on with completing its new 10-storey London headquarters, for occupation next year.
