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Brexit could drive financial services companies out of Belfast and deter inward investment, TheCityUK chief warns

By John Mulgrew

Published 12/04/2016

Firms like Citigroup are trading with America and outside the EU
Firms like Citigroup are trading with America and outside the EU

International financial businesses based in Belfast could pull out of the city if the UK votes to leave the EU, a major City of London firm has warned.

Chris Cummings, chief executive of TheCityUK, claimed firms would "consider alternative locations" instead of Northern Ireland, and in particular Belfast, in order to ensure trading remains smooth and in the single market.

He also claimed a Brexit could put off new companies from investing in Northern Ireland.

"It might also make attracting new foreign direct investment more challenging," Mr Cummings added. "Firms, for example, may consider the benefits of other, rival financial centres.

"If the UK leaves the EU, international firms currently based in UK financial centres such as Belfast may consider alternative locations from which they could easily trade with the continent and access its single market.

"International businesses flock to cities across the UK like Belfast - a flourishing financial and related professional services centre - with access to the EU single market of 500 million consumers often topping their list of reasons for doing so. But we can't simply assume we will always stay on top - just ask the Venetian bankers of old.

"With the EU referendum on June 23 now within our sights, it is an ideal time to highlight the role EU membership has played in helping to make the UK the world's leading financial centre.

"This is important because the strength of UK-based financial and related professional services on the global stage helps to fuel industry jobs on high streets right across the UK.

"It also sees us pay more tax to the Exchequer than any other sector. Leaving the EU may not be ruinous for the UK economy, but it does risk damaging the UK-based industry, and as a consequence risks the loss of jobs from Belfast to Bristol and beyond."

Mr Cummings said the outcome of the EU referendum would be "keenly felt by financial and related professional services firms in Belfast and across the UK".

"Given the benefits the industry reaps from EU membership, with single market access and the ability to do business or sell services in all other 27 member states being just a couple of those, it stands to reason that an overwhelming majority of industry leaders - 84% of them - want to stay in a reformed EU," he added.

Earlier this year, a major study by Oxford Economics claimed Northern Ireland's economy would be hit harder by a Brexit than Britain's, partly because of our land border with the Republic.

The report said that "overall our modelling indicates that Northern Ireland's economy is likely to be relatively more vulnerable to the type of structural changes triggered by a UK exit from the European Union in comparison to the rest of the UK".

The study was commissioned by Stormont's Department of Enterprise, Trade and Investment to try and understand the economic implications of withdrawal.

The UK economy as a whole is predicted to shrink if it leaves the EU, but Northern Ireland could retract at a stronger rate.

Mr Cummings said two-thirds of his industry worked outside of London, including 18,500 in Belfast and 32,000 across Northern Ireland as a whole.

"Together, they contribute £2.3bn to the Northern Irish economy, and in Belfast alone account for 10.3% of the city's gross value added," he added.

But pro-Brexit campaigner Jeff Peel (right) of Quadriga Consulting said trade would continue between financial services companies and the EU in the event of a Brexit.

And he added: "In any event, many of the financial services firms in Belfast - such as Citigroup - are actively trading with America and outside the EU."

Just last week, it was revealed as many as 80 jobs are at risk in Belfast after stock exchange giant Euronext announced it was pulling out of the city.

The company has announced that it is closing its Adelaide Street office, which primarily deals with IT. It is also believed that the firm is moving its operations to Portugal. The closure of the office is a blow to Northern Ireland's burgeoning financial technology sector, which has been growing steadily over the past decade.

Belfast Telegraph

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