From now on until Britain has left the EU, CPA are going to post regular blogs for the comments we have seen in the press and elsewhere about Brexit, which is perhaps the most momentous event that will happen to the UK for a very long time and will have long-term implications for every citizen living in this country for good or ill. We aim to be balanced in our reports which will be divided into three categories;
- Category 1 – Positive comments on Brexit
- Category 2 – Negative comments on Brexit
- Category 3 – Neutral comments on Brexit
We posted our first blog on 12th May 2017 (CPA Brexit blog on 12/5/2017)
Please find below our second Brexit blog which has been compiled on16th May 2017:-
BREXIT; NEUTRAL COMMENT:
On 10th May The Daily Telegraph reported that the insurance company Hiscox will set up a European base in Luxemburg following Brexit but apparently the 1,200 UK-based staff will not be affected.
The article went on to say that pressure was increasing for financial businesses as they prepare themselves for negotiations on Brexit that could restrict the type of services they could provide to clients on Continental Europe.
BREXIT; NEGATIVE COMMENT:
On 10th May The Daily Mail reported that construction firms may have to pay £6,000 for each bricklayer, plumber and electrician from Europe whom they employ after Brexit, as suggested by a think tank.
Although the think tank urges ministers to introduce visa requirements to plug labour shortages after UK brexits, businesses could be forced to pay a fee for each lower-skilled immigrant worker to discourage a business from hiring cheap overseas labour.
BREXIT; NEUTRAL COMMENT:
On 11th May The Daily Telegraph reported that there is a cross-channel defence project to build a drone arrangement, which BAE, who is part of an Anglo-French consortium, has been working on a future combat air system. This predicted outcome was backed by the outgoing Chief Executive, Ian King, who said “The direction of travel will be the same; I do not think anything will fundamentally change.”
BREXIT; POSITIVE COMMENT:
On 11th May The Daily Telegraph reported that the huge Canadian pension investment manger known as The Public Sector Pensions Investment Board, which manages the pension funds of Canada’s armed-forces, the mounted police and reserves, is moving into brand-new accommodation in Victoria, London. Its president said that this was “evidence of our confidence and commitment to the region” and had indicated that it will spend £4.6 billion on expanding in London in the next 5 years, dispelling concerns of a Brexit exodus as it commits to add resources to the Capital.
BREXIT; POSITIVE COMMENT:
On 11th May The Guardian reported in an article written by Nils Pratley that the Chief Executive of Barclays, Jes Staley, would like many of his counterparts such as British-based banks to stay within the single market for financial services but he is ready for other outcomes. None on his current thinking would involve shifting British jobs elsewhere. Nevertheless, the biggest concern will be that financial firms in Britain “have the ability to hire skilled staff from the EU and the rest of the world and thus protect the network that has serviced the City so well.”
BREXIT; POSITIVE COMMENT:
On 12th May it was reported by numerous mediums (radio news and the internet) “SoftBank injects $500 million into UK tech start-up, Improbable.” An existing investor of Improbable, David Rowan, said “There’s a real risk that Brexit will hit the London tech investment ecosystem hard. So now any influx of large-scale funding from respected out-of-Europe investors will be a huge boost to the sector’s confidence.”
BREXIT; NEGATIVE COMMENT:
On 12th May it was reported in numerous publications including The Times, The Daily Telegraph, The Daily Mail, The Guardian, The Independent, The Daily Express, The Daily Mirror, The Scotsman and The Yorkshire Post; “Bank of England cuts growth outlook”. The Bank of England has trimmed its UK growth forecast for 2017 to 1.9% from its earlier February estimate of 2%. The Bank of England Governor, Mark Carney, said forecasts assumed Brexit would be smooth, implying a traumatic exit would hurt growth.
BREXIT; NEUTRAL COMMENT:
On 12th May The Daily Telegraph reported that German car manufacturer, BMW, said that production of Mini’s could be moved out of the UK if Brexit talks fall short. The Chief Executive has asked for “No new barriers to trade and free movement for skilled workers”.
BREXIT; NEGATIVE COMMENT:
On 12th May it was reported in The Daily Telegraph that David Davies, the Brexit Secretary, is claiming that the European President, Jean-Claude Juncker, is trying to get him the sack by allowing negative briefings about him. Mr Davies said to the Daily Telegraph that he hoped to take an agreement as early as September on the status of EU Nationals and British Expatriates living on the Continent.
BREXIT; NEGATIVE COMMENT:
On 13th May in an article in The Guardian by Bob and Roberta Smith, they said that “Leaving the EU will have an impact comparable to Henry VIII’s dissolution of the monasteries”. They went on to say that post-Brexit, the country faces dissolution of monasteries and galleries and that the art in schools will be further diminished. They believe that auction houses could be set to benefit because they are poised to sell off publicly-owned collections to the world’s super-rich at cut prices.
BREXIT; NEUTRAL COMMENT:
Again on 13th May there was an article featured in The Guardian about the effect that Brexit would have on the results of the Eurovision Song Contest and the writer wrote that Britain would come last or near last. (This was disproved because the UK came 15th out of 60 contestants.)
BREXIT; NEUTRAL COMMENT:
On 13th May in an economic forecast written by The Financial Times it was written that “UK interest rates are likely to be able to rise over more normal levels over the next three years, the Bank of England said on Thursday, but it delivered a sting in the tail by basing its forecasts on the assumption that Theresa May secures a ‘smooth’ Brexit. In a stark warning to the prime minister less than a month before the general election, the central bank made it clear that its sanguine forecasts depended on successful negotiations in Brussels to ensure companies will not have to adjust their business plans.”
BREXIT; NEUTRAL COMMENT:
On 13th May in an article in The Economist regarding clearing houses and Brexit, it was written that new European proposals might force euro clearing out of London. In November a study commissioned by the London Stock Exchange (LSE) stated that if euro clearing was forced out of the City, 83,000 British jobs could be lost and a further 232,000 affected.
However, the article went on to say that since firms based in the EU outside Britain account for only 7% of cleared euro-denominated interest-rate derivatives at LCH, the impact could be modest for London.
Apparently, since America tolerates 97% of dollar interest-rate swaps being cleared in London, it seems perverse for the EU to shift euro clearing.