It seems like the referendum was held only yesterday, and that the UK might still have had the chance to fix some of the scariest things that could be happening to the economy. But, as we all know, time passes and now we are facing a number of very painful truths. The first of these painful truths is the fact that the leader of the UK, at the moment is Boris Johnson.
The second inconvenient truth is that Boris is going for the no-deal Brexit. The third inconvenient truth, and the one we want to talk about, is the truth that the prediction of companies leaving the UK in case of Brexit was right, and the first signs of this happening are already pretty obvious. After all, just recently the news that 98 companies are relocating has been released. Now, we wait for more of these news.
The ones that are leaving
The reports of the leaving companies were released after the weekend. The report said that there are about 100 companies at the moment that are leaving the UK and relocating their main addresses to Amsterdam. They are doing so in order to be able to continue providing their services within the EU, the largest markets for some of these companies to operate on.
Some have been saying that out of the 98 companies that are leaving, some are the so called MailBox companies, meaning companies that simply register an address and then continue through the internet. But, while the majority of the companies are certainly such, an Australian casino news website has been reporting that some UK casinos that offer their services in Australia are already moving their offices to the EU and that the current situation of the companies leaving the country is only going to get worse over time.
They are not wrong. According to the Guardian, around 1 in 3 companies that they polled are reporting that they are planning on leaving the UK in order to move their main address to the EU, pre Brexit. In doing so, they are hoping to retain the EU markets and continue operations in one of the world’s largest economies unimpeded. Although, it seems that a significant number of said companies, while planning to leave the UK, is still planning to retain some of their offices and operations within the UK.
While some Brits are taking this as a sign that the UK companies have a lot of faith within the country, there are those within the country who are saying the decision has a little more to do with a rational approach to how the companies are dealing with Brexit. While they do want to continue providing their services to the EU, most of the staff hat the companies have hired are located within the UK as the companies continue to relocate to the EU in terms of the main address, the offices that are staffed are going to remain in the UK, for a while.
The reason for this is simple – companies do not have the resources to either relocate the entire staff with the address, and they don’t have the resources necessary to hire a large staff at once, once they do relocate. As a result, companies are choosing to take a staggered approach. Only those people who are highly skilled and indispensable will be kept on board and offered a way to relocate with the company, while those who are not highly skilled enough will be replaced in a staggered manner. The offices in the EU, as they become large and more reminiscent of the head offices, will start housing more and more workers that are going to be considered either the main staff or are going to be relocated from the UK.
A dangerous turn for the UK industries
While the Uk might still believe that there might be way to survive Brexit and flourish past it, if the businesses that support the economy start leaving en masse, there is not going to be much hope for the UK. Montreal experienced a similar event once upon a time in its history. During the wave of separatism that engulfed Montreal, businesses decided that it would be smarter to leave the area and relocate to Toronto. The process did not last long, and the sentiment of separatism died down a little after a while, but the damage had been done. Many businesses relocated from one city to the other and today, Montreal has turned into a less desirable city, while Toronto has become the most industrialized city in Canada.
The same is happening within the UK, and there is little that will stop it, even if Brexit is stopped. The more companies leave the UK, the more damage the economy will take, while the EU enjoys the benefits of additional companies, additional taxpayers and higher-paying jobs in the area. It would have been wise for the UK to stop the Brexit talk before the exodus of companies began, but now that the process has begun, it might be a little too late for Brexit to effectively stop it from happening.