The Brexit vote has raised a question mark over the UK’s future ability to do business and, as a result many businesses, as part of responsible contingency planning, are considering relocating operations or headquarters, according to KPMG’s first ‘100 UK CEOs’ survey.
The survey of CEOs from companies with revenues ranged between £100 million and £1bn found that, both in the short term (the next year) and the medium term (the next three years), the majority are confident about the future growth of the country, the global economy and their own businesses. However, over half believe that the UK’s ability to do effective business will be hindered after leaving the EU.
Simon Collins, KPMG UK Chairman, commented: “Our research has highlighted a really positive message for the UK economy. We took a temperature check of the views of 100 CEOs from a broad range of businesses and found that they are confident about their own and the UK’s future growth prospects – a confidence reinforced in recent days by a number of important economic indicators. However, this confidence isn’t unbridled. CEOs are reacting to the prevailing uncertainty with contingency planning. In particular, the majority said they are considering relocating their headquarters or operations outside the UK. Over half believe the UK’s ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption.
“In our own work, we have seen international clients who had been considering basing European headquarters in the UK, opt for Ireland instead. Our latest analysis shows that this effect could be exaggerated by UK companies moving. Contingency planning is just that – a form of insurance – but it must not become ‘plan A’. Moving headquarters abroad is radical and hits the headlines but businesses could start shifting operations abroad with little public attention. We hear it time and time again that business needs certainty. Policy makers should be really concerned about a leaching of British business abroad and should engage with business early to understand what assurances they can offer and closely monitor any shifts overseas. Equally, businesses should be sharing their on the ground experiences to convene a unified voice into government.”