Why did we really get so agitated that British banks and insurers might vote with their feet if the electorate decided Brexit would be the best course of action?
That financial services, our marquee player, would up sticks and redomicile around the world, from Frankfurt and New York to Hong Kong and Singapore, if Britain decided to leave the El Dorado of the European Union, a captive market of 500 million consumers.
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Why didn’t we work out in the apparent uncertainty and volatility that our major players had the solution? They could have their cake and eat it. Keep all the advantages of being domiciled in the UK, with London in particular the open-all-hours, attractive entrepot for financial services for their clients.
And simply transfer a subsidiary HQ for their prized EU business to a new location within the single market.
That is what they are doing with virtually no fuss – “simples”, as the meerkats tell us in the adverts.
Insurance giant RSA, which employs 6,000 people in the UK, yesterday said it was to open a new office in Luxembourg as a new EU hub for business.
It follows in the footsteps of AIG and Hiscox, which have also recently announced plans to open operations in the Duchy. RSA’s new office will form the regional HQ for its Belgian, French, German, Spanish and Dutch business.
Banking major HSBC plans to move 1,000 staff to France, while American investment banking group JP Morgan is moving 1,000 London jobs to Dublin, Frankfurt and Luxembourg to help secure its EU business after Brexit. The Lloyd’s of London insurance market has opted for a subsidiary in Brussels.
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This is not to say there will not be UK business and economic pain after Brexit. That is a separate issue, and clearly deeply uncertain. But the specific fears on fundamental relocation of the UK financial services industry – about 10 per cent of UK GDP – look to have been overdone, with each seemingly seamless creation of an EU business gateway within the single market.
Maybe in administrative terms, British banks and insurers would have found it simpler to have done it all from this country. But inconvenience is not the same as seismic change.