DAVOS, Switzerland — The CEOs of the world’s largest companies
have been telling Isabelle Allen, KPMG’s head of clients
and markets that they are now accepting their fate that Britain
is heading for a “hard Brexit.”
A “hard Brexit” is when Britain leaves the European Union
without access to the single market but with full control
over immigration instead.
Allen told Business Insider at the World Economic
Forum in Davos that there are many geopolitical concerns for
businesses but they are instead choosing to accept “hard Brexit”
instead of becoming “paralysed.”
“It is interesting to see the view of businesses looking
from outside, into the UK, as well as those who are within
Britain,” said Allen, who is based in Paris, France but serves
multinational clients globally.
“What has been difficult for everybody is the lack of visibility
and May’s speech (on January 17) provided a roadmap, or a
milestone, to how businesses can operate with more confidence.
“There has been a shift in sentiment and now CEOs are saying
‘this is my reality’ and ‘how can this new reality work for me
because we know what we are going to deal with.’ Whether they
agree or disagree on the issues is irrelevant. This is the new
“There is a lot of macroeconomic and geopolitical anxiety, such
as US President Donald Trump, China, Brexit, elections in France,
and if you add them all up there would be paralysis, if companies
didn’t accept reality. There is also tech disruption to consider.
But everyone that I’ve talked to the last few days have given a
May signalled a hard stance on Brexit in
her speech in London on January 17
but she offered
an olive branch to her European counterparts attending the
World Economic forum two days later: “We are all united in
our belief that [the new] world is built on the foundations of
free trade and globalisation.”
Meanwhile, on January 24,
Supreme Court ruled that the government must allow Parliament to
vote on the triggering of Article 50.
The court’s head, Lord Neuberger confirmed that the Supreme
Court’s judges voted 8-3 to reject the government’s appeal, and
ruled that it must put the triggering of the article to a vote in
Parliament before any formal action can be taken.
Two days later the UK government on Thursday published its
“Brexit bill,” which paves the way for Britain’s exit from
the EU. The bill, if passed, would give Prime Minister Theresa
May the authorisation to trigger Article 50, starting the
two-year negotiation period for Britain to leave the 28-nation
But the world’s biggest banks have been vocal
Banks are making contingency plans
The loss of passporting rights following Brexit
is one of the biggest fears in the City of Londonand seems
almost a certainty under May’s “Hard Brexit” plan.
If the passport is taken away, London could cease to be the most
important financial centre in Europe, costing the UK thousands of
jobs and billions in revenues.
Around 5,500 firms registered in the UK rely on the European
Union’s passporting rights for the financial services sector, and
they turn over about £9 billion in revenue.There has been a
surge in applications for Irish passports following the UK’s vote
to leave the European Union.
Barclays has apparently chosen
capital of the Republic of Ireland,
as its headquarters within the European Union
Barclays CEO Jes Staley already said earlier this month
that operations will likely be shifted out of London as a
result of the government’s hard stance on Brexit. He said that
Barclays will move some jobs from the capital to either Ireland
or Germany, where Barclays already has operations.
Elsewhere, Goldman Sachs is considering cutting
its staffing numbers inLondon
by up to 50% due to Brexit fears, according to a report on
Thursday, while JP Morgan CEO Jamie Dimon said that
more jobs than previously expected may have to be moved out of
the UK as a result of Britain leaving the EU.
HSBC CEO Stuart Gulliver has said that
Brexit will push bankers making 20% of London revenue to