Firms look abroad as uncertainty erodes confidence
An increasing number of companies are getting frustrated with the uncertainty of Brexit. Nearly a third of firms surveyed by a prominent business lobby may move parts of their operations abroad with the UK exiting the EU. Research by the Institute of Directors (IOD) found 16 per cent of its membership had already initiated relocation plans, with a further 13 per cent “actively considering” a move.
Among large businesses surveyed, over a fifth said they had already moved or set up overseas operations as a result of Britain’s impending exit from the EU.
Two-fifths of the companies surveyed said they were awaiting more clarity on Brexit before making contingency plans. Acting head of IOD, Edwin Morgan said: “It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies.”
He added: “While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad.” Uncertainty continues to surround the UK’S path out of EU membership.
The day set for departure, March 29, is looming with just 10 days remaining until the deadline, but parliament has been unable to settle on a preferred method of withdrawal — despite a series of votes having taken place — and the possibility of an extension to the exit date is now in the offing.
Amid the ongoing debate about the Irish border and the Brexit backstop — a major cause of an agreement between the UK and the EU not being finalised as yet — it would be easy to lose sight of London’s financial district’s (known as the ‘City’) flourishing links across the Irish sea.
Both Northern Ireland and the Republic of Ireland share a long history with the City.
These ties have grown in recent years as the City Corporation has worked closely together with its counterparts in Belfast and Dublin in the spirit of collaboration, not competition.
The policy chairman at the City of London Corporation, Catherine Mcguiness, travelled last month to Dublin to speak at the European Financial Forum, alongside senior industry figures and Irish policymakers.
She had also visited Derrylondonderry and attended a reception with Belfast City Council which was to celebrate the approval of the Belfast Region City Deal — an investment strategy designed to improve economic prospects across innovation and tech, tourism, infrastructure, and skills.
Belfast is, in fact, a key partner for the City Corporation in its regional strategy, which aims to deliver deeper relationships and more tangible results between London and the country’s major financial and related professional centres.
Over 33,000 people already work in financial and professional services across Belfast. This is reflected in the presence of firms from London’s financial district. Accountancy giant Deloitte chose Northern Ireland for its UK data analysis hub, and the first Google Innovation Lab in Europe opened in Belfast in a partnership with PWC. It is also home to an increasingly innovative cluster of cyber security firms, ranking number one in the world for international investment in the subsector.
As for Dublin, much of the focus since the referendum has been on London’s financial firms relocating some operations and jobs away from London as part of their contingency planning for Brexit. It should be remembered that this healthy competition is also underpinned by mutually beneficial and interdependent trade.
Data from the Office for National Statistics shows that UK financial services imports from Ireland stood at £600m in 2017, while exports totalled £1.5bn. These links are required to continue going from strength to strength in years to come.
That is why the City Corporation is pressing the UK government hard for a pragmatic, business-friendly withdrawal agreement — which provides for a legally-binding transition period.
Businesses and politicians on both sides of the Irish border are keen to find a solution that puts an end to the current uncertainty and facilitates the free flow of trade, services and people — as many cross the border regularly as part of their normal routine, every day.
Despite this short-term uncertainty, however, Mcguiness is confident that the City’s economic and cultural ties with Northern Ireland and the Republic of Ireland will continue to thrive long after Brexit.
AMONG LARGE BUSINESSES SURVEYED, OVER A FIFTH SAID THEY HAD ALREADY MOVED OR SET UP OVERSEAS OPERATIONS AS A RESULT OF BRITAIN’S IMPENDING EXIT FROM THE EU.