#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 11°C Wednesday 21 October 2020
Advertisement

Brexit: A stormy week for Britain as UK firms issue warnings and move HQs

Sony and Dyson this week announce that they were moving their headquarters out of Britain.

Image: Matt Crossick/EMPICS Entertainment. via PA Images

AS THE CLOCK ticks closer to 29 March, the date the UK is set to leave the EU, and as it’s looking more and more likely that there will be a no-deal scenario, a number of major companies have made announcements this week with regards to its Brexit preparations.

British lawmakers last week roundly rejected the divorce terms May agreed with Brussels, raising fresh fears with just 10 weeks to go that Britain could crash out of the EU with no deal.

If the UK leaves the EU without a deal, this will mean that the British government will have to apply to adopt World Trade Organisation rules.

This will mean that tariffs, or taxes, will have to be introduced by the UK for goods being imported from the EU, and EU member states will do the same for goods being imported from the UK. These tariffs are set rates: for example, dairy goods are at 35%, while car imports cost 10% of their value.

However, as major companies like Sony and Dyson announced this week that they were moving their headquarters out of the UK, Britain’s International Trade Secretary Liam Fox told AFP at the World Economic Forum in Davos that Britain “remains open for business”. 

Britain “is an attractive destination for foreign direct investment – and that during the time where there’s been uncertainty over Brexit”, Fox said.

So, with that, what companies have announced their departure from the UK in recent weeks and what were their reasons for the move? 

Sony

On Wednesday, Japanese electronics giant Sony said it was moving its headquarters’ registration to the Netherlands by the end of March to avoid Brexit-related customs issues.

Its rival Panasonic last year also moved its European headquarters from Britain to the Netherlands over concerns about potential Brexit-related tax issues.

Several other Japanese firms, including megabank MUFG, Nomura Holdings, Daiwa Securities and Sumitomo Mitsui Financial Group, have said they are planning to move their main EU bases out of London since the 2016 Brexit vote.

Dyson

British electric appliance pioneer Dyson announced on Tuesday that it will switch its headquarters to Singapore this year. 

Unlike Sony, however, Dyson said the decision is not because of Brexit, but rather due to booming Asian demand. 

The group, founded and owned by serial entrepreneur and vocal Brexit supporter James Dyson, last year announced it would produce electric cars in Singapore.

The firm stressed that Brexit was not a factor behind the decision to ditch its corporate base in Malmesbury in Wiltshire, western England, in favour of Singapore.

P&O

British ferry operator P&O announced on Tuesday that it will register to Cyprus its ships operating on the English Channel in order to function more smoothly after Brexit. 

“For operational and accounting reasons, we have concluded that the best course of action is to re-flag all ships to be under the Cyprus flag,” a spokesperson said. 

The decision will result in “fewer inspections and delays, and will result in significantly more favourable tonnage tax arrangements as the ships will be flagged in an EU member state”, he added.

Other preparations

A number of other companies have announced plans to prepare for Brexit, while not explicitly announcing their departure from the UK. 

Airbus chief executive Tom Enders this week warned that the European aerospace giant could make “very harmful decisions” for Britain if it leaves the EU without a deal. 

Enders branded the UK government’s handling of Brexit a “disgrace” and suggested 14,000 jobs at its sites designing and manufacturing wings at Filton in southwest England and Broughton in north Wales were under threat. 

US car giant Ford later warned that a no-deal scenario “would severely impact Ford’s operations in the UK and across Europe, which potentially could result in an $800 million headwind in 2019″, it said.

Fellow carmaker Jaguar Land Rover also said in a statement it would pause production in Britain for a week after the 29 March departure date “due to potential Brexit disruption”, whatever the outcome.

#Open journalism No news is bad news Support The Journal

Your contributions will help us continue to deliver the stories that are important to you

Support us now

The Guardian has also reported that retailers Dixons Carphone and Pets at Home announced plans to shore up suppliers in the event of chaos at British ports.  

Benefits for other countries

Ireland, France, Germany, Luxembourg and the Netherlands have all benefited from companies moving out of London, although the large impact predicted by some on Britain’s financial sector has so far failed to materialise.

Dutch officials are in contact with more than 250 companies about a possible post-Brexit move, the government there said Wednesday.

The Dutch government will announce a final figure in February but “every new arrival of a business, big or small, is a success,” Michiel Bakhuizen, a spokesman for the Netherlands Foreign Investment Agency, told AFP.

What’s next with Brexit? 

Well, after a historic defeat for her Brexit deal, British Prime Minister Theresa May will put her Withdrawal Agreement back before the House of Commons this Tuesday.

A record-breaking 230 MPs voted against the government last week, and May was given just three days to come up with her Plan B. On Monday this week, she announced that her Plan B was to hold another vote on Plan A (a very Brexit means Brexit move).

The strictest opposition from the House of Commons seems to be due to the backstop.

Many pro-Brexit and some pro-Remain MPs have expressed concern about whether the backstop would threaten Northern Ireland’s status within the United Kingdom; others have said that the backstop needs to be time-limited, which EU leaders have said would make the backstop entirely pointless.

With time running out before the 29 March, which is when the UK must legally leave the European Union, the UK government, the EU and Ireland are scrambling for solutions.

With reporting by Gráinne Ní Aodha and  © AFP 2019  

Read next:

COMMENTS (44)

This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
write a comment

    Leave a commentcancel