Financial firms in Britain continue to shift business to new European Union hubs and won’t stop unless Brexit is canceled, a think tank told British lawmakers on Wednesday.
William Wright, head of New Financial, said its study published on March 11 showed that 275 financial firms were moving some of their business, staff or assets from Britain to hubs in the EU to avoid Brexit disruption.
“Since the report was published we have found another 14 firms have set up new entities,” Wright told a House of Lords committee.
Moves out of Britain would continue under any Brexit outcome that fell short of canceling Britain’s departure from the bloc as firms sought to end trading uncertainty, Wright said.
Andrew Pilgrim, an associate partner at consultants EY told lawmakers there was no going back for the big banks that have spent millions of euros setting up and staffing new EU hubs.
“For most people, they are beyond the point of no return,” Pilgrim said.
Britain was due to leave the EU on March 29 but departure has been delayed until at least April 12.
The prospect of Britain remaining in the EU’s customs union has increased, a step Pilgrim said would not give financial services market access to the bloc.
Brexit is also a catalyst to review business models and accelerate longstanding shifts in back office staff from Britain to cheaper locations like Poland, and to be closer to key customers, Pilgrim said.
Germany’s foreign banking association said on Wednesday that up to 5,000 new jobs in its member institutes would be created in the next 12 to 18 months due to Brexit.
The Bank of England expects about 4,000 banking and insurance jobs to have moved by Brexit Day, a fraction of the early estimates from consultants in the aftermath of Britain’s vote in 2016 to leave the EU.
If Britain leaves the EU with no deal, financial business could flow immediately from Britain to Singapore and the United States as they have access to the bloc, Pilgrim said.
Wright said there was now only scope to pause but not stop the flow of financial services business from Britain to the EU, unless Britain remained in the single market, a step the government has so far ruled out. (Reporting by Huw Jones; Editing by Jan Harvey)