London banks ‘could relocate jobs outside Europe’

Business relocation of firms in the financial sector may be irreversible by early next year. Concerns are also growing that jobs may leave London for cities outside of the EU such as New York.

Banks in London continue to consider relocation
Banks and other financial firms will be forced to accelerate contingency plans to relocate staff from London unless a transitional Brexit deal is agreed by the first quarter of next year, a City of London lobby group report warned.

New York and Singapore viewed as potential destination for businesses in UK

TheCityUK, which fears that up to 75,000 jobs in London might eventually go, says that the eventual winners might not be the likes of Frankfurt, Dublin and other EU cities currently vying to attract jobs from the UK, but other global players such as New York and Singapore.In its latest report, the organisation says “the value of a transitional deal is disappearing by the day” and is calling on the UK government and EU negotiators to reach a comprehensive agreement early in 2018 “at the latest”.The report adds, “Without this in place, more firms will be forced to accelerate their contingency plans, with significant international investment and jobs likely to leave Europe as a consequence.”The call came just 24 hours after Ceemet, the Brussels-based organisation representing 200,000 manufacturing firms across Europe, warned that the sector could suffer irreparable damage unless a “meaningful” transitional trade deal was reached by the end of the year.

Brexit transitional deal reaching critical point

Miles Celic, CEO of TheCityUK, said, “EU and UK negotiators cannot delay discussing a transitional deal any longer if they want it to hold any real value. Firms are beyond the planning stage now. If they haven’t done so already, most will be ready to press go on their contingency plans in the New Year.“They can still take their foot off the accelerator if a transitional deal is agreed, but without progress soon, it may be too late. Once businesses start moving, there is no reverse gear. It is simply not efficient or economically viable to move operations twice.“This isn’t just about business leaving the UK. It is about the very high risk of jobs, capital and inward investment leaving Europe entirely. The resulting fragmented markets will be of benefit to no-one, with costs likely to increase for customers right across the continent.“The paper makes the case for transition to be as close as possible to the status quo. This would provide continued mutual market access, avoid two sets of costly adaptation phases, and see the UK accept all of the rights – and obligations – of the Single Market in line with EU law during the transition period.“It must also cater for new as well as existing business and ensure that existing contracts will continue to be serviced and honoured.“Ultimately, in the long term the UK cannot be a rule-taker in relation to its domestic regulation. Equally, the transition period must be long enough to finalise the new relationship between the UK and the EU27, including the conclusion of an ambitious and comprehensive UK/EU free trade agreement and the design of the new regulatory framework accompanying it.”
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The report calls for a transitional deal “as close as possible” to existing arrangements, including the conclusion of a comprehensive free trade agreement and the design of the new regulatory framework. It says the many agreements that need to be “grandfathered” include derivatives contracts, revolving credit facilities, general insurance and long-term life insurance. For related news and features, visit our Brexit section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory  

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