The German bank, which employs 9,000 people in the UK, announced it had begun making contingency plans on whether to quit the UK in case of a Brexit. It has set up a ‘working group’ which will review whether to move its British divisions to Germany and was the first bank to declare that it is exploring its options following a referendum.
There are a number of reasons why HSBC may decide to leave the UK. Douglas Flint, chairman of HSBC, told investors at the AGM: “One economic uncertainty stands out, that of continuing UK membership of the EU.” Employing 48,000 people in the UK, the economic impact of HSBC’s exit from the UK would not only have a significant impact in terms of government tax revenue, but would also be detrimental to UK employment figures. Some commentators have pointed out that due to the bank levy and excessive regulation, HSBC might move to the Far East rather than Frankfurt, and that a Brexit might actually create the conditions that would mean staying in the UK is more attractive.
Commenting on how Britain’s membership of the EU benefits global banks and the market for finance jobs, David Sykes, Manager of Financial Services at FTSE100 recruitment firm Robert Walters, said: “The business or economist view is that the UK and European economies benefit mutually from Britain being a member of the EU. Take away that membership and you put at risk preferential trade agreements and potential investment. There is also the issue of individual working restrictions as leaving the EU could in theory remove the future working rights of no UK EU citizens therefore reducing the diversity and talent available to UK employers.”
A Brexit from the European Union would have a negative impact on employment claims a leading recruitment firm. According to Manpower, leaving the EU would create a "vast amount of uncertainty and instability" making firms less willing to invest in new jobs. Commenting on its recent survey of 2,100 employers which indicated that already there is a "critical shortfall" of qualified workers in the UK –
particularly in the north of the country – Manpower Solutions UK managing director James Hick said: "Our position on Europe is clear: leaving the EU would threaten jobs and harm Britain's prospects… "At a time when we face serious skills shortages in key areas of the economy, that [an EU exit] could have a very negative effect on our economic health."
Paul Kahn, the president of Airbus Group UK, which employs more than 16,000 people in the UK and is the world's second-largest plane maker after Boeing, said future investment and thousands of jobs would be at risk should the result of the referendum on EU membership signal an exit. Kahn said he believed it was “vital for a company such as Airbus to come out and make a stand in favour of Britain remaining in the European Union”.
American industrial giant General Electric, which employs more than 18,00 people in the UK and 40 manufacturing plants, has warned of the economic damage that could come from Britain leaving the EU and indicated that it could move some operations abroad if links with the Continent are cut.
Standard & Poor’s
Influential ratings agency Standard & Poor’s warned that a Brexit could mean the UK losing its prized triple-A credit rating, downgrading the outlook on sovereign debt to ‘negative’. In its report, analysts at S&P pointed out that the financial services and insurance sectors account for 30 per cent of the UK’s foreign direct investment (FDI), equivalent to 17 per cent of GDP (half of which comes from directly from EU investors).
Lord Bamford, chairman of construction equipment maker JCB said that leaving the EU would not impact on UK business.
Tate & Lyle
Tate & Lyle Sugar, Britain’s last cane sugar refiner, said it would be better off outside the EU if Cameron fails to secure reforms, citing the fact that production has plunged from 1.2 million tons a year to 600,000 since 2009, due to Brussels’ rules which favour sugar beet. Half the world’s supply is produced in Europe while the cane sugar is imported and refined by US-owned Tate & Lyle Sugars.
Commenting on the potential ramifications of a Brexit in an interview with the Financial Times, chief economist of Citigroup, Willem Buiter, said: “Short-term (over five to six years) this would be very disruptive for the UK. Brexit would be followed Scoxit (exit of Scotland from the UK)… In the longer term, the UK is likely to become a member of the European Economic Area: so UK becomes Iceland.”
Stay tuned to hear about the legal impacts of Britain leaving the EU in tomorrow’s instalment of the Brexit series.