Two out of five US firms based in UK considering relocating to European continent in wake of Brexit vote, says study

TWO out of five American companies with a base in Britain are considering moving out and relocating elsewhere in Europe because of Brexit, a report today suggests.

The research by international law firm Gowling WLG also showed that more than half of US companies which export to the EU are more likely to bypass the UK following the June referendum result.

The study of more than 500 executives of American firms, most having a UK base, showed differences in sectors, with those in food and beverage, life sciences and financial services most likely to consider relocating, and aerospace least likely.

Uncertainties surrounding Brexit, in particular the delay caused by issues such as Article 50, were threatening trading links between the UK and the US, said the report.

Bernardine Adkins of Gowling WLG, said: “The strong UK-US trade relationship that has been carefully nurtured over the past 50 years is in serious jeopardy. This is despite a wide consensus amongst US firms that the unique dynamics of the UK market and its access to the rest of the EU drive their preference for doing business here.

“Concerns that Brexit will have an effect on current investment decisions mean this needs addressing now, not later,” she added.

The report came as Universities Scotland called on David Mundell to make the “positive case” on immigration to ensure international talent could come to study in Scotland’s universities and remain after graduation to meet the skills gaps facing the nation’s economy.

The Scottish Secretary is due to give evidence on Brexit to the Commons Scottish Affairs Committee this afternoon at the same time as his Cabinet colleague David Davis will be cross-examined for the first time by the newly-constituted Brexit committee.

The SNP’s Pete Wishart, who chairs the Scottish Affairs Committee, has expressed frustration at Mr Davis’s refusal, thus far, to give evidence before it, saying it was “thoroughly disappointing”.

The UK Government has already rebuffed a call by Nicola Sturgeon for the Scottish Government to have more discrete powers over immigration.

Professor Andrea Nolan, Convener of Universities Scotland, said: “We need to see positive and meaningful change on immigration from the UK Government so we can restore our competitiveness in the recruitment of international students.”

She explained that universities were a key sector of the Scottish economy, contributing over £7 billion every year. “We need the UK Government to bring forward positive changes to its policy on student immigration,” declared Prof Nolan.

Commenting on suggestions that Whitehall wanted to halve the number of international students. She said university leaders were “deeply fearful” of such a prospect.

“A move to limit international student numbers would come at great cost to our universities and would compromise the kind of education we want our home students to experience; it would take a chunk out of Scotland’s export industry and put jobs at risk. I am at a loss to understand who or what would benefit from such a move,” added Prof Nolan.

Meantime, Guy Verhofstadt, the European Parliament’s chief Brexit negotiator, responded to Chancellor Philip Hammond’s suggestion that a transitional period after Britain left the EU might be necessary to guarantee a smooth and stable withdrawal.

Mr Verhofstadt made clear any such “transitional arrangement” should have a strict time limit.

“I have seen many times in politics that a so-called transitional agreement becomes an eternal, a definitive, agreement; that has to be avoided.”

A House of Lords report has warned of significant tariffs and other barriers to trade unless a transitional period was adopted.

Some UK Government ministers have privately expressed reservations about the idea while Nigel Farage, the ex-Ukip leader, told the BBC he feared talk of interim deals was part of “backsliding” and an attempt to “delay” the Brexit process.

Elsewhere, Alex Salmond, the SNP’s foreign affairs spokesman, is due to hold talks in Brussels with Jean-Claude Juncker, the European Commission. Earlier this week, the Commission made clear it would not negotiate a separate deal with the Scottish Government. “Negotiations will take place with the UK only,” it said in a statement. The former First Minister was unavailable for comment.

Go to Source