After 122 years of trading, UK company goes Dutch over hard Brexit fears
A major Lincolnshire employer has announced it is moving its headquarters to Europe as a direct result of the Brexit vote in June. Anxiety over the cost of a hard Brexit, which would see the UK drifting away from cooperation with the rest of the EU, has compelled Smiffys to open a new headquarters in the Netherlands.
Elliott Peckett, director of the costume and fancy dress supplier, said 40 per cent of the company sales go
to the European Union, its largest trading partner, and he needs to be prudent.
Mr Peckett told The Independent: “The Government proclaim that they want to encourage Britain to export, but pursuing this hard Brexit approach has simply pulled the chair from beneath us and left us dangling. The simple answer is that we cannot afford to wait.
“During that time [the negotiating process], not only will Smiffys have lost valuable EU sales due to this uncertainty, as we are already experiencing, but we will have lost the opportunity to have acted to protect what are vital sales to our company. Moreover, the fact that the pound is now at a 168-year record low against the dollar, according to the Bank of England, sums up the outlook for the UK economy under the approach that the Government are taking on Brexit.”
The company, which employs 250 people across its two sites in Gainsborough and Leeds, has been based in the UK since its formation in 1894. Mr Peckett said: “Smiffys have no choice but to protect our business by moving our headquarters to the EU. This will allow us to continue growing our trade to the EU, from within the single market.”
Prior to joining the single market, Smiffys exported only a tiny fraction of their current sales to the EU. “Both Smiffys and its European customers were then faced with bureaucratic and administrative barriers, not to mention the costly import duties that our products attracted, making us uncompetitive,” Mr Peckett explained. “Going back to these times would feel like a step back in time and a lost opportunity to freely access a trading bloc of over 500 million people,” he added.
Another concern for the company is the uncertainty surrounding its workforce as it employs over a dozen European staff. “All we have heard from the Government is that it is highly unlikely that they will be allowed to stay and work for us. If this is the case, this will remove Smiffys’ ability to communicate as well as we currently do with our EU customers,” Mr Peckett said.
Smiffys’ announcement comes as banks and financial firms warned they could start making decisions to move assets out of the UK as early as 2017 if there is no deal in place to maintain their rights to sell services freely across the EU. Open Europe, which took a neutral stance on the referendum, warned that losing access to the single market could cost banks in the UK as much as £27bn, or a fifth of their annual revenue.
Yesterday, Nicolas Mackel, the head of financial development for Luxembourg, said a string of overseas banks and fund managers had explored moving London staff to the tiny country since the Brexit vote. The Government is reportedly considering making future payments to the EU to secure privileged access to the single market for City firms to continue trading across the continent.