Leading banks are consolidating plans to relocate thousands of staff from London in the wake of Prime Minister Theresa May’s confirmation that the UK will pull out of the Single Market when it leaves the European Union.HSBC became the first major bank to detail plans to move, saying it would go ahead with a plan to relocate about 1,000 staff from London to Paris “in about two years’ time” – a plan it first mooted shortly before the EU referendum in June.Swiss bank UBS also said it would “have to” relocate up 1,000 London jobs to Germany, or possibly Spain, because of the likelihood that, post-Brexit, the UK would lose the passporting rights that enabled banks in Britain to trade freely throughout Europe.And America’s Goldman Sachs is considering moving up to 1,000 staff to Frankfurt and about 500 to New York – halving its total UK workforce – according to a report in Germany’s Handelsblatt newspaper.

Government ‘to protect UK financial services’

Theresa May has pledged to make a priority of continued access to Europe for financial services in the UK and, after delivering a speech to the World Economic Forum in Davos, held private meetings with bosses from JP Morgan, Goldman Sachs, Morgan Stanley and asset manager BlackRock.Chancellor of the Exchequer Philip Hammond, who was with Mrs May in Davos, told Bloomberg TV that protecting Britain’s financial services was a priority for the UK government.Mr Hammond added, “Financial services is not the only industry that we have in the UK; we have to do a deal that works for all parts of the UK, all the devolved nations, all the sectors of our economy. But financial services is the single largest sector in terms of GVA [gross value added], and we have to ensure that that’s protected in the deal that we do.“I think six months from now we’ll have a much clearer idea of where we collectively feel we can go, where the political imperatives on both sides allow us to find a meeting of minds that will work for our economy and work for the European economy.”

London ‘will continue as global financial centre’

Stuart Gulliver, HSBC’s chief executive, said in Davos, “We will move in about two years’ time, when Brexit becomes effective. Activities covered specifically by European financial regulation will need to move, looking at our own numbers – that’s about 20 per cent of the revenue.”Mr Gulliver said there was “no rush” to shift the jobs to Paris, as the bank had the licences required following its acquisition of Credit Commercial de France in 2002.Other banks did not have the same luxury, he said. “Some of our other fellow bankers have to make decisions pretty quickly now, given that the UK said it will come out of the single market, about applying for banking licenses in some of the EU countries. We don’t have to do that.”But Mr Gulliver said that London would still be “the best place to host a global bank” and that, irrespective of Brexit, the city would continue to be a global financial centre.“I don’t see the foreign exchange market moving, the investment grade bond market moving, the equity market moving, and the high-yield bond market moving,” he added.

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Bulk of Barclays’ activities to remain in UK

Stuart Gulliver’s remarks were backed by Jes Staley, chief executive of Barclays, which is the world’s biggest underwriter of European government bonds. While he admitted in an interview with the BBC that the bank was looking at routing some of its activities through operations in Ireland and Germany, he said the bulk of activities would remain in the UK.“I don’t believe that the European financial centre will leave the City of London,” he said. “I think the UK will continue to be the financial lungs for Europe. We may have to move certain activities, but I think it’s going to be at the margin and will be manageable.”Meanwhile, Andrea Orcel, chief executive of UBS Investment Bank, said no final decision had been made on numbers that would have to be moved from London to either to Frankfurt or Spain. “With Brexit, we will have to, and the question is how many. It will very much depend on the agreement that the UK will reach with the EU,” he told Bloomberg Television. 

Sharing the benefits of globalisation

In her speech in Davos, Theresa May called on mainstream politicians to do more to tackle a backlash against globalisation by putting its benefits into practice for everyone. “It means doing even more to spread those benefits to more people. It means playing by the same rules as everyone else when it comes to tax and behaviour, because in the UK trust in business runs at just 35 per cent among those in the lowest income brackets,” she said.“And it means putting aside short-term considerations and investing in people and communities for the long term. These are all things that I know the vast majority of businesses do already. Not just by creating jobs, supporting smaller businesses, training and developing people, but also by working to give something back to communities and supporting the next generation.”On Brexit, she said, “I want to explain how the United Kingdom – a country that has so often been at the forefront of economic and social change – will step up to a new leadership role as the strongest and most forceful advocate for business, free markets and free trade anywhere in the world. For that is the unique opportunity that Britain now has.”Mrs May said that, when Britons voted to leave the EU, they had opted to create a “truly global Britain” that would lead the world in free trade.In other news, Takeshi Uchiyamada, chairman of Toyota, has warned that the firm is now looking at how it could “survive” Brexit in the UK, where its manufacturing plants employ about 3,000 people.Mr Uchiyamada told the Financial Times, “We have seen the direction of the Prime Minister of the UK. We are now going to consider, together with the suppliers, how our company can survive.”For more news and features about the impact of Brexit in the UK and across the globe, visit our Brexit section.The following section may also be of interest: Enterprise 

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