May vows 'open' Britain as banks shift jobs from London

United Kingdom Prime Minister Theresa May arrives for the European summit in Brussels, Belgium, 15 December 2016. Photo: EPA/Julien Warnand

LONDON - Prime Minister Theresa May told the world's elite on Thursday that Britain would become a champion for business and free trade despite Brexit, even as major banks said they planned to shift jobs out of London.

May, speaking on the eve of Donald Trump's inauguration as US president, sought to reassure the World Economic Forum in Davos that Britain's vote to quit the European Union did not signal a retreat into protectionism.

"The United Kingdom -– a country that has so often been at the forefront of economic and social change -– will step up to a new leadership role as the strongest and most forceful advocate for business, free markets and free trade anywhere in the world," May told a packed hall.

It was the same venue where China's President Xi Jinping on Tuesday delivered a clarion call for open markets and against protectionism, in the lead-up to Trump taking office.

May added that Britain will "seek the freedom to strike new trade deals with old friends and new allies right around the world".

London is already in discussions on possible deals with Australia, New Zealand and India, and has been seeking closer ties to China for years.

Finance minister Philip Hammond told AFP he hoped investors would be reassured after May "set (her plan) out so clearly today".

After her speech, May sat down in Davos with top CEOs of US banks including Goldman Sachs, JPMorgan Chase and Morgan Stanley, according to sources with knowledge of the matter.

JPMorgan chief Jamie Dimon said Thursday there "will be more job movement" out of the bank's London offices than the 4,000 it previously estimated. 

Business leaders gathered in Davos, anxious for clarity on how Brexit will affect them, expressed relief that May's negotiating strategy is taking shape -- though they said the proof will be in her much-trumpeted trade deals.

Murray Rode, CEO of US-based Tibco Software whose European headquarters are in London, said May clearly meant to convey that "Britain's going to be separate but global, so everybody calm down". 

"But it's the actions that follow that are going to matter," he stressed. 

Lance Uggla, president of financial analysis firm IHS Markit, said May had given "a very clear vision and stance" of how she intends to approach divorce negotiations following Britain's referendum vote last June to quit the EU.

But he added May had "not yet" provided enough details on what happens next to reassure nervous multinationals.


Apart from JPMorgan, several major banks said they plan to relocate staff from London's financial hub, to ensure that they can continue to do business across the EU with one operating licence.

HSBC says 1,000 of its investment banking jobs will leave the City of London for Paris.

UBS said it "will definitely have to move" some staff from London, while Goldman Sachs was reported to be halving its London staff to 3,000. 

Lloyd's bank was said to be considering Frankfurt as a new base, while Lloyd's the insurer said it was close to a decision on opening a European office to operate alongside its historic London HQ.

Those movements represent a potentially heavy blow for Britain, where financial services represent a tenth of economic output. 

London's mayor Sadiq Khan told AFP that rival financial hubs in New York and Asia would be the ultimate winners of banks deserting Britain -- rather than rivals in Europe.

"The reality is they'll probably go to Hong Kong, Singapore or New York. So a so-called hard Brexit could be a lose-lose, a lose for London and the UK, and a lose for the EU too," he said. 

May insisted in her pitch to the Davos crowd that Britain was "open for business", saying she would seek "an ambitious free trade agreement between the UK and the European Union".

Don't punish Britain

But Pierre Moscovici, European commissioner for economic and financial affairs, said Britain "cannot have all the advantages of being a member of the club when you are out of the club".

France and Germany, meanwhile, signalled a more conciliatory approach.

"The position from the German government has been from the very beginning that we will not punish the UK," Finance Minister Wolfgang Schaeuble told an audience in Davos, adding however that "we were not happy" about the Brexit decision.

France's Foreign Minister Jean-Marc Ayrault also said his country had no intention of "punishing" Britain.


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