LONDON - The UK’s vote to leave the European Union has left more than three-quarters of chief executive officers saying they would consider moving their headquarters or operations outside Britain, according to a survey of 100 business leaders by the accountancy firm KPMG.
Some 72% of the CEOs surveyed said they voted "Remain" in the June 23 Brexit referendum, KPMG said on Monday in an e-mailed statement. While more than two-thirds said they’re confident Britain’s economy and their own companies will continue to grow over the next year, 76% are mulling some form of relocation.
"CEOs are reacting to the prevailing uncertainty with contingency planning," KPMG UK chairman Simon Collins said in the statement. "Over half believe the UK’s ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption."
The survey suggests Prime Minister Theresa May has work to do to retain businesses and jobs as the UK seeks a deal with the EU that curbs immigration while retaining the closest trading ties possible with the bloc’s 27 other members. Before the referendum, then-Chancellor of the Exchequer George Osborne said a vote to leave would endanger as many as 820,000 jobs.
Pound depreciation
While the pound has fallen by 13% against the dollar since the vote, some of the direst pre-referendum predictions have failed to come true, particularly about the economic outlook. Still, May has yet to trigger a formal exit, saying only she won’t begin the two-year process this year.
"Policy makers should be really concerned about a leaching of British business abroad and should engage with business early to understand what assurances they can offer and closely monitor any shifts overseas," Mr Collins said.
The survey reported on executives’ intentions anonymously. In public, CEOs of UK companies have been more circumspect about their intentions as the conditions of Brexit remain unclear.
Among the handful of UK-based companies that openly raised the possibility of a move is mobile carrier Vodafone Group Plc, which said in the aftermath of the referendum that it couldn’t guarantee that it would keep its headquarters in the UK if the negotiations produced an unfavorable outcome.
Low-cost airline EasyJet Plc said it was seeking an operating certificate in another EU country in order to ensure unfettered access to the bloc after Brexit. Insurer Lloyd’s of London Ltd may have to move some of its operations out of the UK if it loses access to the single market, chairman John Nelson has said.
Foreign banks
Non-UK banks that have significant operations in London have been more outspoken about the possibility of moving, with executives of JPMorgan Chase & Co and UBS Group AG warning that they might have to relocate thousands of jobs.
KPMG interviewed 100 UK CEOs of companies with annual sales of at least £100 million ($130 million) and at least 500 employees. The survey was carried out over four weeks from mid-July.
