Brussels has been largely unsuccessful in attracting businesses currently based in the United Kingdom to switch following the country’s departure from the European Union, according to a report by the think tank New Financial. Some 275 banking and financial businesses based in the UK have expressed a wish to shift all or some operations to mainland Europe in the event of a No-Deal Brexit. But Brussels has been less successful than other EU capitals at attracting those businesses to the region.
So far, New Financial reports, 250 of those firms have selected a new base in the EU27, with Dublin scoring by far the highest, with 100 relocations. Ireland is, of course, the main English-speaking alternative to the UK, making it easier to transfer staff or find new English-speaking staff.
After Ireland come Luxembourg, with 60 relocations, Paris (41), Frankfurt (40) and Amsterdam (32). More than 40 of those firms have chosen to move to more than one EU centre.
“The shift in underlying business is more significant than headlines about the number of staff. Our conservative estimates show that banks and investment banks are moving around £800bn in assets. Asset managers have so far transferred more than £65bn in funds, and insurance companies have so far moved £35bn in assets,” the report states.
Brussels, meanwhile, has managed to attract only nine of the firms intending to move, barely 3% of the total. And that, despite the efforts of an economic mission fro the Brussels region to the UK recently, led by foreign trade minister Cécile Jodogne, aimed at attracting three sectors in particular: life sciences, audiovisual and financing and banking. As the report points out, for many businesses Brexit effectively took place some time last year; amid continuing political uncertainty, businesses found they had no choice but to assume a no-deal Brexit, and take appropriate action. The Brussels mission, therefore, may have come too late.
Jodogne, meanwhile, said it is too early to judge the eventual outcome of Brexit, as well as the success or otherwise of the Brussels strategy. New Financial tends to agree.
“We think our analysis is the most comprehensive yet of the impact of Brexit, but we know that the numbers significantly understate the real picture,” the report concludes. “Over time, we expect the headline numbers of firms, staff, and business to increase significantly as the dust settles on Brexit and local regulators require firms to increase the substance of their local operations.”