Financial giants shift operations to EU as fears of hard Brexit escalates

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UK finance giants are stepping up moves to shift operations and staff to the EU amid growing fears of a no-deal Brexit, MPs have been warned.

Tens of millions of pounds have been spent to make sure they can continue to operate in the EU after Brexit as uncertainty levels escalate.

Brexit negotiations are ongoing.

Brexit negotiations are ongoing.

A no-deal scenario would be a “stark prospect” for the finance industry, the Commons Scottish affairs select committee was told yesterday.

Richard Normington of the Investment Association said: “We do live in an eco-system as far as financial services is concerned. From Scotland, about £615 billion is managed, which is a considerable amount.

“Our members have taken steps in case of what’s called hard Brexit. That includes setting up management companies within the EU 27, it involves having regulated entities set up within the EU 27 and, in some cases, transferring and setting up offices with new staff.”

Alastair Ross of the Association of British Insurers said firms were working on a “part seven transfer process” to create subsidiary firms in the EU.

He said: “Our member companies in the second half of 2016 started looking at plans and evaluating them and they started working through those.

“They committed in some cases tens of millions of pounds to set up new offices and operations and staff to meet the regulatory requirements.”