Financial services firms are marginally more likely to consider relocating away from the United Kingdom following British prime minster Theresa May’s latest Brexit speech, according to a commercial property expert.
Miles Gibson, head of UK research at CBRE and a former senior civil servant with a decade of senior experience at the UK treasury, the department for communities and local government and the cabinet office, said Ms May seemed to suggest an end to passporting in her keynote speech on Tuesday.
Passporting allows UK-based financial companies to sell their products throughout the European Union.
Outlining the UK’s plans for leaving the EU, Ms May confirmed the UK would leave the European single market while also committing to maintain a common travel area between Ireland and Britain.
Lack of clarity
Mr Gibson said while it was good to hear Ms May talk about the future legal regulatory framework for financial services, as companies need to make plans, the lack of clarity about whether Britain would remain in the customs union would cause concern.
“People will be quite concerned about the lack of detail in terms of a free-trade agreement and whether we are in the customs union or not.
“If I was advising clients I’d say this [speech] makes it marginally more likely that companies will need to relocate because many financial services firms will have been holding on the promise of the retention of the so-called passporting system. She [Ms May] seems to be ruling passporting out,” he said.
“She did say she wanted a fully reciprocal comprehensive free-trade area agreement, so there may be provision for financial services in that, but it is impossible to say at this stage. I think the contingency planning that businesses in the UK are doing to move some of their operations to other European cities will continue. The speech will have made a difference to that planning.
Mr Gibson, who was in Dublin for an event on Tuesday, said the Irish capital was a leading contender along with Frankfurt, Berlin, Paris and Amsterdam for companies relocating from London.
“There are factors that Ireland has which other locations don’t have. The confirmation from Theresa May that she would like to keep the common travel area and that it is a key priority is important. It allows Ireland to say that it has a special relationship with the UK that no other country has.
“That’s a real positive for Ireland, as are the more traditional plus points for the Irish market such as the corporation rate, the shared cultural similarities, the same language, the track record in attracting FDI to Dublin and the large number of financial sector and tech firms already here. There’s a long list of things that Dubliners can point to in terms of attractions for companies,” he added.
