‘It all de­pends on the EU talks, but I think Paris can take 10,000 jobs from London’

Brex­o­dus In the first in a se­ries look­ing at the ways Euro­pean ci­ties are hop­ing to cash in on Brexit, Parisian of­fi­cials set out their stall

The Guardian - - SPECIAL REPORT | FINANCE - An­gelique Chrisafis De­facto’s tongue-in-cheek ad­ver­tis­ing cam­paign to lure com­pa­nies to La Défense

The Brexit un­cer­tainy is grow­ing even big­ger today Marie-Célie Guillaume French banks no longer have rea­son to put staff in London Valérie Pécresse Af­ter the ref­er­en­dum there was a bru­tal leap to France Thierry Schimpff It’s a slow earth­quake that be­gan on the day of the vote Jean-Louis Mis­sika

Cranes dot the sky­line of Paris’s La Défense busi­ness district as drills clat­ter away on the build­ing sites of fu­ture sky­scrapers con­tain­ing acres of new of­fice space. Marie-Célie Guillaume proudly walks the route of the guided tours she gives to com­pa­nies draw­ing up Brexit con­tin­gency plans and con­sid­er­ing mov­ing jobs from London af­ter the UK leaves the Euro­pean Union.

“The un­cer­tainty opened up by the Brexit vote is grow­ing even big­ger today,” she says as she takes a lift up France’s high­est of­fice build­ing to in­spect a lux­u­ri­ous new de­signer workspace, with tread­mill desks and med­i­ta­tion rooms. “We have no clar­i­fi­ca­tion of the full time­frame or the con­di­tions of Brexit – and if there’s one thing com­pa­nies hate, it’s un­cer­tainty.”

Guillaume, chief ex­ec­u­tive of De­facto, which man­ages this vast busi­ness district that nudges up against the west of Paris, was be­hind last year’s tongue-in-cheek ad­ver­tis­ing cam­paign to lure com­pa­nies to France post-Brexit: “Tired of the fog? Try the frogs!” Since then she has seen a grow­ing num­ber of in­quiries from in­ter­na­tional firms about the prac­ti­cal­i­ties of a po­ten­tial move of staff from London.

La Défense, Europe’s largest busi­ness district, hap­pens to be in a build­ing boom just as Paris it­self races to con­struct new of­fice build­ings amid a mas­sive ex­ten­sion of the pub­lic trans­port sys­tem. The busi­ness district is ready with hun­dreds of thou­sands of square me­tres of com­par­a­tively cheap of­fice space for any com­pany that might de­cide to re­lo­cate staff, par­tic­u­larly if Brexit means the loss of London’s “pass­port­ing rights”, which al­low in­ter­na­tional fi­nan­cial firms ac­cess to EU mar­kets.

London busi­nesses and fi­nanciers are play­ing a wait­ing game on the ex­act terms of Brexit, and are un­der pres­sure to take de­ci­sions early next year. But Guillaume is look­ing to the east to win busi­ness from London too. She re­cently trav­elled to South Korea and Ja­pan to make the case for Paris. “Our tar­get is not just com­pa­nies that are cur­rently in London,” she says.

“Un­til now Asian firms set­ting up in Europe im­me­di­ately chose London with­out a mo­ment’s thought. Now it’s clear that they are hes­i­tat­ing be­tween Ger­many and France.”

Paris has markedly stepped up its pace in the race among Euro­pean ci­ties to corner the “Brexit relocation” sec­tor.

Valérie Pécresse, the head of the Île de France re­gion that sur­rounds Paris, is ad­dress­ing busi­ness lead­ers in London today in the lat­est of sev­eral cross-Chan­nel relocation road­shows. She brought a vast team of tech­ni­cal ex­perts to an­swer com­pa­nies’ very pre­cise ques­tions – from tax to labour laws, visas or the price of of­fice rents – as busi­nesses en­ter a new, more ur­gent phase of pre­par­ing de­tailed Brexit con­tin­gency plans and mak­ing de­ci­sions early next year.

“Our first tar­get is French banks,” Pécresse says. “With France’s changes to leg­is­la­tion, French banks no longer have rea­son to put their work­ers in London.” The ul­ti­mate tar­get for the Paris re­gion was to bring 10,000 di­rect jobs from London by 2019. “Of course, ev­ery­thing de­pends on the ne­go­ti­a­tions in Brus­sels. If, as seems to be pan­ning out, the ne­go­ti­a­tions lead to the with­drawal of fi­nan­cial pass­port­ing from the UK, I think Paris can gain 10,000 di­rect jobs,” she says.

Pécresse, a for­mer bud­get min­is­ter un­der Ni­co­las Sarkozy and a key fig­ure in the French rightwing Les Répub­li­cains party, says there is a lot of “psy­chol­ogy” in­volved, not least con­vinc­ing busi­nesses that France is “chang­ing pro­foundly”. “French Labour laws have been re­formed and the wealth tax has been trans­formed,” she says.

“So the mes­sage is that France is re­formable and there is a new state of mind. I think a lot of pos­i­tive mes­sages have been sent and there is not a sin­gle per­son left in the City of London who thinks France is the en­emy of fi­nance.”

The French cap­i­tal is in com­pe­ti­tion with sev­eral other EU ci­ties – the most po­tent chal­lenger be­ing Frank­furt, home to the Euro­pean Cen­tral Bank. The Île de France re­gion es­ti­mates from com­pany an­nounce­ments that about 2,500 jobs are ear­marked to move to the Paris area from London. They in­clude staff from HSBC bank and at least 300 traders and sup­port staff from Bank of Amer­ica. But Frank­furt is ahead, with more than 3,000 jobs al­ready des­tined for the Ger­man fi­nan­cial cen­tre. They are among sev­eral ci­ties vy­ing to be the new home for the Euro­pean Bank­ing Au­thor­ity, which will leave Ca­nary Wharf.

So far, of 50 com­pa­nies that have con­sulted the Paris re­gion’s hot­line and ded­i­cated Brexit relocation ad­vis­ers to dis­cuss po­ten­tial moves, 11 have taken ac­tion to lo­cate jobs in France. Of­fi­cials in the Paris greater re­gion said of the Brex­o­dus race: “We’re play­ing in the same di­vi­sion as Frank­furt.”

France was ini­tially ham­pered by its im­age as be­ing po­lit­i­cally scep­ti­cal about the rich. François Hol­lande, pres­i­dent be­fore the in­cum­bent, Em­manuel Macron, was elected on a prom­ise that he was “the en­emy of fi­nance”, taxes were his­tor­i­cally high and the costs of hir­ing and fir­ing more ex­pen­sive than in the coun­try’s neigh­bours.

The prime min­is­ter, Édouard Philippe, has promised that “cer­tain weak­nesses” have been ad­dressed with the ar­rival of the cen­trist, pro-busi­ness Macron. He cited re­forms that loos­ened labour laws, the scrap­ping of France’s wealth tax and its trans­for­ma­tion into a prop­erty tax, the abo­li­tion of the high­est bracket of a pay­roll tax levied on each salar­ied em­ployee and the can­cel­la­tion of plans to in­crease France’s 0.3% tax on fi­nan­cial trans­ac­tions.

Cou­pled with this are ma­jor ef­forts be­ing made by Paris and the wider Paris re­gion, such as stream­lin­ing ad­min­is­tra­tive tasks, es­tab­lish­ing a Paris-based in­ter­na­tional tri­bunal that can hear cases in English, and the con­struc­tion of three in­ter­na­tional schools within five years. Cru­cially for com­pa­nies which pay their em­ploy­ees’ school fees, these French state in­ter­na­tional schools, with bilin­gual classes, will be free.

For French of­fi­cials, all de­pends on the UK’s ne­go­ti­a­tions with the Euro­pean Union. A hard Brexit would ac­cel­er­ate busi­nesses’ search for al­ter­na­tive bases.

Thierry Schimpff, head of the French union of relocation pro­fes­sion­als, the SNPRM, said: “Just af­ter the Brexit ref­er­en­dum re­sult we no­ticed a bru­tal leap in moves from the UK to France by both fam­i­lies and com­pa­nies. Now there’s a wait­ing pe­riod to see what hap­pens in the ne­go­ti­a­tions. “Some are won­der­ing whether Brexit will hap­pen, oth­ers are mak­ing plans to leave, con­cerned about a hard Brexit. It feels like we’re in the dark and ev­ery­thing is up in the air.”

Jean-Louis Mis­sika, the Paris deputy mayor in charge of eco­nomic de­vel­op­ment, said Brexit is “a slow earth­quake – it started the day of the vote and it con­tin­ues very slowly, but with earth­quake ef­fects.”

Main, La De­fense in Paris; above, Valérie Pécresse and Clichy mayor Remi Muzeau in his of­fi­cial sash; in­set, the French prime min­is­ter, Édouard Philippe Main pho­to­graph: Charles Pla­tiau/ Reuters

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