No Immediate Exodus from London following Brexit

No Immediate Exodus from London following Brexit

Accountancy boss calms fears over mass exodus of companies from London after Brexit

David Cruickshank, the global chairman of accountants and business consultants Deloitte, has suggested that it is unlikely that large financial services companies will be making any immediate decisions to re-locate staff and operations from London.

Many commentators had suggested that companies would look to move jobs to other European countries now it is known that the UK will be leaving the European Union.

In an interview with Business Insider magazine, Mr Cruickshank commented:

“I think companies are looking at potentially moving roles from London but they have been fairly thoughtful about that. No one is going to be jumping quickly.

“Companies have been contingency planning, for what they would do in the event of a Brexit — including passporting financial services — for a long time before the referendum result. I think right now, when there is no certainty of outcome and what a Brexit looks like, everyone is being careful to wait and see.”

As Mr Cruickshank points out, while it is now all but certain that the UK will be leaving the EU, it is still far from clear what the UK’s trading relationship will be with Europe and the rest of the world in the longer term. A future UK Government, under a new Prime Minister, may for example decide to maintain full access to the European single market, under a similar arrangement to that enjoyed by non-EU members Norway and Iceland. Such an arrangement is likely to be much better for multinational corporations than any attempt by the UK to go it alone and negotiate all of its own trade deals.

Comments by Richard Gnodde, co-head of the Investment Banking Division of Goldman Sachs, suggested that his organisation might only move jobs from London if they lost passporting rights – passporting allows a country licensed in one EU member state to operate in any of the other countries in the EU without needing separate authorisation from another national regulator.

London was recently named as the best city in the world in which to conduct business in a study by corporate risk think tank the Z/Yen Group. Regardless of the eventual trading relationship the UK has with the EU, many of the factors that saw London top this survey will remain unaffected, such as the country’s low tax economy, the UK Government’s pro-business stance and the fact that English is the accepted language of global business.

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