More London City firms prepared for EU relocations

EY's latest Financial Services Brexit Tracker finds an increase in companies planning to move from the UK to the EU27 - and London Mayor Sadiq Khan warns MPs that jobs and investment are at risk.

London Mayor Sadiq Khan

The Mayor's press office, London

About a third of financial services firms in London have now confirmed contingency plans to establish European hubs after Brexit, according to the latest EY survey.Agreement on a post-Brexit transition period had "not stemmed the steady stream" of companies confirming their contingency plans, although EY said the total - 75 of 222 firms surveyed - remained relatively low.The survey came as Sadiq Khan, London's mayor, warned a committee of MPs that jobs and investment were at risk in the capital and other UK cities because the government was not doing enough to safeguard services in Brexit talks.EY's latest Financial Services Brexit Tracker found that there had been a two percentage point increase, to 34 per cent, since March in the number of companies confirming plans to move some of their operations or staff from the UK to the EU27.About a quarter of the firms had plans to relocate staff to one or more EU locations, with Dublin and Frankfurt the most popular locations. Currently, 32 companies have confirmed plans to move staff from the UK, up from 28 in the first quarter.Omar Ali, UK financial services leader at EY, said: "Most firms are yet to iron out all the finer details, but there is evidence to suggest they are continuing to make definitive decisions, with many recognising that the transition is not yet locked in, and may not be until very late in the day."We are seeing more and more companies name multiple locations, unsurprisingly focused on those where they have existing operations or there is an existing financial services infrastructure to slot into."This points to the fact that it is unlikely we'll see one pre-eminent financial services hub emerge in Europe, and London will remain a leading global financial centre."
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Meanwhile, Mr Khan told the House of Commons Public Administration and Constitutional Affairs Committee on Tuesday that the government's concentration on the trade in goods in Brexit talks at the expense of the service sector, including financial services, accountancy and the legal profession, could seriously damage the economy.He pointed out that trade in services accounted for about 40 per cent of UK exports to the EU and that the sector accounted for more than 90 per cent of the economies of London, Manchester and Edinburgh, and more than 80 per cent in Leeds and Birmingham.Ahead of the committee hearing, Mr Khan said: "The United Kingdom has a vibrant services industry responsible for employing more than 20 million people across the country. Any deal struck by the government that focuses just on goods, at the expense of services, could seriously damage our economy."The government's current approach is further evidence, as if we even needed it, that the prime minister has her priorities all wrong."London is unquestionably the best place in the world to do business. The city is built on strong foundations of innovation, entrepreneurship, creativity and a world-class financial hub - and that is not going to change."But we are already seeing major banks establishing subsidiaries in other EU countries, or moving part of their business out of the capital because EU law requires them to be legally compliant from the day the UK leaves the European Union."If the government does not change its approach and strike a deal that secures access to the single market for services, this trend will only continue. The result will be fewer jobs, less investment and less prosperity the length and breadth of the country."Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory