City firms publicly confirming contingency plans to move staff or operations to the EU post Brexit have risen 50 per cent over the last four months, according to EY, although the increase is being attributed to the tight timetable rather than politics.
More than a quarter of UK financial services firms tracked by EY have announced plans, compared to 18 per cent four months ago, with almost half of investment banks confirming people or operations moves.
Twelve out of 52 asset managers have publicly made announcements on moving staff and operations, while 10 out of 37 insurers have announced plans.
In the last four months, Prime Minister Theresa May has confirmed the Government plans to pull the UK out of the single market and threatened to walk away from Brexit negotiations with no deal, not to mention calling an early general election set for 8 June.
EY UK financial services leader Omar Ali: “The number of financial institutions who are publicly committing to concrete action in response to Brexit has increased, but it’s still a minority and is driven by the tight timetable rather than politics.
“The more complex the organisation, the longer it is going to take to create workable contingency options, and so investment banks in particular are putting their plans on record.
“Notably though, the majority of firms are maintaining their commitment to the UK, and still talking about moving only the resources necessary to maintain a smooth service for their clients.
“The variety of locations firms are selecting only confirms the fact that the UK’s financial ecosystem is unique and very hard to replicate in other European jurisdictions.”
In last couple of weeks JPMorgan, the world’s largest investment bank, and Standard Chartered have confirmed plans to move staff to the Continent, while Goldman Sachs chief executive Lloyd Blankfein warned London could “stall” following Brexit.
In total, global banks have pledged that they will be moving 9,000 jobs abroad, Reuters reports.
Although the moves represent about 2 per cent of City jobs, a report from the Institute for Fiscal Studies says the loss of rich taxpayers would require the rest of the population to top up the lost tax revenues.
In March, the Bank of England wrote to City firms requiring them to supply written confirmation of their contingency planning for Brexit, including the possibility of no deal, by July.
As jobs move offshore, the Recruitment and Employment Confederation has blamed Brexit for the UK’s steepest drop in candidate availability for 16 months.
Chief executive Kevin Green says the shortage spans from cleaners to accountants.
“People already in work are becoming more hesitant about moving jobs amid Brexit uncertainty. Meanwhile, the weakening pound and lack of clarity about future immigration rules is putting off some EU nationals from taking up roles in the UK.
Green has called for the next government to invest in skills and career advice for UK jobseekers and safeguard access to workers from abroad through an “agile” immigration system.
“Every shortage has wider implications, for example the exceptional reputation UK engineering enjoys globally is at risk because employers can’t find people with the skills they need.”