City to see 10,500 jobs shift to EU because of Brexit

Firms in the Square Mile are planning to shift 10,500 jobs out of Britain by the first day of Brexit as the economic reality of the vote begins to bite.

EY’s Brexit Tracker, which monitors 222 financial services firms, also shows that banks, asset managers and brokers are now expecting client facing and “front office” roles to leave Britain because of Brexit.

The net result will be the loss of 10,500 highly skilled jobs to the City.

Although the figure is lower than the 12,500 estimated last year, the number of financial services firms publicly estimating job relocations has risen from 12 to 26.

Omar Ali, EY’s UK financial services leader, said: “Contingency plans have developed significantly over the last year, putting firms in a stronger position to estimate how many UK jobs they need to move.

“Firms are working hard to find viable solutions that will allow them to continue to serve their customers and satisfy regulators with the minimum disruption. As a result, many of the jobs that are moving are client facing, ‘front office’ roles to ensure that companies can continue to serve their clients under EU law from day one.

EY’s Brexit Tracker shows that, since the referendum, 68 of the 222 companies monitored have said they are considering or have confirmed they are moving some of their operations or staff out of the UK.

Cities such as Frankfurt, Amsterdam and Dublin will be the beneficiaries of a smaller City of London.

Mr Ali added that the government’s announcement on Friday that it has agreed an outline for a potential transition “sent a wave of relief across the City”.

Banks and financial firms are preparing to shift portions of their UK operations to the EU in hopes of safeguarding against the loss of passporting rights, which currently give UK-based financial services cross-border access to the bloc.

Britain will lose passporting rights when it leaves the single market in March 2019.

The fresh data will be sombre reading for the Treasury after figures showed that the UK’s financial services sector paid its highest tax bill on record last year, raising fears that a Brexit banking exodus could ultimately harm government coffers.

The industry shelled out a total of £72.1bn in tax contributions in the year to March 31, marking a 1% increase from a year earlier and resulting in the highest amount that the sector is recorded to have paid in the 10 years that data has been collected.

Sir Mark Boleat, former chairman of the City of London Corporation, said: “This research confirms what everyone in British business knows – that not only is Brexit damaging our economy now, but it will get far worse once we leave.

“Some financial services can only be provided in Europe by institutions based in countries in the Single Market. That’s just the rules. The government’s decision to take Britain out of the single market will force firms to move jobs away from the UK to continental Europe.”