Brexit has already created 3,500 technology jobs in Brussels

Thousands of tech jobs have moved to Brussels from the UK due to Brexit with expectations of more to come once Britain leaves the EU, according to a sector leader.

As many as 3,500 roles have already been relocated to the Belgium capital, said Juan Bossicard, president of Microsoft’s Innovation Centre in the city.

The stream of tech workers leaving the UK began in the summer of 2016, Mr Bossicard told the New Statesman.

“Since Brexit began, 3,500 jobs have moved here from the UK and we expect far more to come after Brexit officially happens,” he said.

Mr Bossicard said Brexit offered a “huge opportunity” for Brussels, and added the city has a lot of offer UK companies, including single market access and good links to other European countries.

Ahead of the EU referendum, job losses linked to Brexit were forecast to be in the hundreds of thousands but since the vote these projections have been curtailed.

However, the Bank of England has said that Britain is set to lose 5,000 financial services jobs by 29 March next year, a prediction backed by the Treasury.

MPs are set to begin debating Theresa May’s Brexit deal, with a vote on the agreement due to take place in the coming days.

On Tuesday, an official at the European Court of Justice said Article 50 could be unilaterally revoked, sending the pound up against the dollar and the euro.

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London business confidence rises to highest since EU referendum

The balance of firms in the capital reporting they are optimistic about the prospects for their firm rose to zero per cent in the second quarter – a 10-point quarterly increase – the London Chamber of Commerce and Industry will say.

Larger firms were more confident than smaller businesses, for whom the confidence reading remained negative on balance.

The poll of more than 500 firms showed that expectations for both the London and the UK economy remain negative on balance, as they have done for two years. The survey was carried out before the Cabinet’s recent agreement on a Brexit negotiating position or the subsequent resignations of two ministers.

Colin Stanbridge, LCCI chief executive, said: “Despite an improvement in many of these figures much still needs to be done to ensure London businesses continue to prosper, now and in the future.”

More firms reported that domestic demand fell than increased during the second quarter, although the fall-back was somewhat compensated by an increase in export demand.

Meanwhile, firms’ reported capital investments remained in negative territory, in spite of an improvement over the quarter.

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Breaking News: A quarter of managing partners voted for Brexit

An overwhelming 82 per cent of UK-based lawyers voted to remain in the EU in the referendum, new data collected by Advisory Excellence shows.

However, a new survey of our readers also shows that over a quarter (26 per cent) of managing and senior partners voted for Brexit. This is a higher percentage than the average leave vote in the legal market of 18 per cent.

These results show how the vote in the legal market differed strongly from the general public’s attitude towards Brexit.

Within the professional services market, lawyers are the least likely to see the primacy of UK courts as important regardless of their vote in the EU referendum. Instead, they claim that the highest objective for Brexit negotiations should be free trade with the EU.

But that was not the only difference. Only 30 per cent of legal readers agreed that “we just need to get on with Brexit”, compared to a majority of 54 per cent of the general public. Some 56 per cent of readers disagreed with the statement compared to 14 per cent of the general public.

Two out of three of those surveyed by Advisory Excellence claim to want a second referendum to determine whether Brexit should go ahead. Of these, 19 per cent have already said that they would vote to leave should that referendum occur.

Advisory Excellence’s survey has also revealed that one in four readers voted for the Lib Dems in the last election. Lib Dem leader Vince Cable is the politician with the most popular views on Brexit within the legal sector, contrasting with the least popular views from Labour leader Jeremy Corbyn and Jean Claude Juncker.

The survey was conducted at the end of 2017, collating opinions from almost 3,000 respondents. Of these, 22.4 per cent worked in-house, 70.5 per cent worked in private practice and 5.6 per cent worked at the Bar.

Next month Advisory Excellence will release an exclusive report in collaboration with Thomson Reuters that explores how Brexit will impact firms in the UK and across Europe.

The in-depth analysis includes insight from over 300 senior lawyers in private practice, detailing how their clients and their own businesses will be impacted and their strategy to respond to Brexit.

Britain’s economy isn’t in freefall and that worries business

The false prophecies of an economic collapse, aired loudly before and in the days after last year’s referendum on EU membership, have boosted the confidence of hard Brexiteers. A group of them even says a “no deal” with the EU on future relations after the 2019 exit date isn’t a bad thing.

Others, including many in British business, are quietly sorry the economy hasn’t taken a hit – if only because to them a hard shock seems the one thing that can sway the politics around Brexit and push the government to strike a favorable trade deal with Europe. If a shock comes, it’ll now probably come “too late,” in the words of one former government insider. The likelier course, economists now believe, is a long-term economic slowdown.

With Brexit, “we didn’t drop the frog in a pot of boiling water,” Commerzbank chief UK economist Peter Dixon said. “It won’t be the big one-off hit that tipped the economy into recession like 2008, but it will be a slow strangling of the economy as activity that might have taken place otherwise does not.”

Fuzzy Numbers:

The evidence to support that pessimistic view isn’t always clear-cut. With inflation rising and employment strong, the Bank of England last week hiked rates for the first time in a decade, reversing the 0.25 basis point cut in August 2016 made on the back of their gloomy post-referendum forecast. But, and here’s the catch, instead of a sharp drop in economic activity, the BoE sees Brexit as a long-term drag that Governor Mark Carney said will bring a new, lower “speed limit” for growth.

“The short, sharp shock has simply not materialized and unless there is some incredibly destructive news, it’s very unlikely to,” said Amit Kara, head of macroeconomic forecasting at the the National Institute for Economic and Social Research (NIESR). The institute last Wednesday projected the economy over the next five years would slow by an average of a quarter percentage point annually – and only partly due to Brexit. Britain’s main problem is weak productivity growth.

There has been more worrying data. The CBI’s quarterly Industrial Trends Survey covering the three months before October found that optimism about business conditions fell for the first time in a year, investment intentions have deteriorated and spending plans for buildings are at their lowest since July 2009. Retail sales have slumped at their fastest rate since 2009. Household income is £600 lower than it would have been had Britain voted to remain in the European Union, according to the NIESR report.

“Growth will be 1.5 percent rather than 2 percent, that kind of thing. Over 25 years this will have quite a big effect on Britain’s living standards, but day-to-day it won’t be very dramatic,” said Nick Macpherson, the former head of the Treasury under Chancellor George Osborne. “The only thing which could change that is a very hard Brexit indeed. Lorry queues round the M25, planes grounded, that sort of thing. The problem then is it will be too late to do anything about it.”

No Doom Or Gloom:

So to most people today, Brexit has been an economic non-event. Growth in the third quarter of 2017 – the three months through September – was up slightly to 0.4 percent, beating expectations, but part of a trend in 2017 of slower growth than the long-term average of around 2 percent a year. Wages were up 2.2 percent – the highest since 2012 – but with inflation at 3 percent real incomes fell.

“Individuals don’t really notice the difference between an economy growing at 2 percent to an economy growing at 1.8 percent,” said a senior economic expert in one of the major business groups opposed to Brexit. “People notice when the economy goes into recession, but we are not in that territory.”

The absence of something closer to apocalypse is making it harder for proponents of a “soft” Brexit with Europe to get heard.

It’s “undeniable that the projections of doom and gloom have not materialized,” said Nicky Morgan, the Conservative chair of the treasury select committee who opposed Brexit, and argued the avoidance of recession doesn’t mean Britain’s out of the woods.

“There are two costs to Brexit,” she said. “There’s the economic cost – and there will be one. Businesses are clearly not investing as much at the moment because of the uncertainty. But there is also the long-term opportunity cost – the cost of lost opportunities. This will be hard for people to feel in their bank accounts. It’s the business which decides to invest but not in the UK That is hard to quantify.”

Morgan warned the government not to let the lack of a crisis allow them to become complacent about the dangers of a mishandled Brexit. “We must not undermine our economy and the last seven years of extremely hard work,” she said.

Morgan and the other Tory soft Brexiteers are in a minority in the party, but have strong allies in government, foremost Chancellor Philip Hammond, who is pushing to maintain as much access to European markets as possible. However, the Brexiteers, led by Boris Johnson, Liam Fox and Michael Gove, hold the power to bring down the government should the prime minister stray too far off their preferred course.

Theresa May is trapped in the middle, forced to find compromise between the two camps at every turn.

Business Political Calculus:

The big “downside risk” for the UK economy – acting as the caveat in all the forecasts of economic growth – is the uncertainty around the final Brexit package, according to the Bank of England chief Carney.

The main UK business groups, which meet the Brexit department, business department and Treasury every two weeks, are united in their demand for a time-limited transition period to be agreed with the EU by the end of this year so companies can plan for subsequent years with certainty.

Yet, the government has sent mixed signals. The prime minister and Brexit Secretary David Davis have raised the prospect of a transition deal on the same trade terms as Britain currently enjoys but that’s politically toxic for many backbenchers and some of May’s Cabinet, as it implies that Britain will de facto remain part of the EU beyond 2019. What is more, the EU side is yet to agree to even discuss these future arrangements.

May’s recent suggestion that this transition arrangement is dependent on settling Britain’s future trading terms with the bloc increased anxiety for British business, who want a legally-binding agreement within months to allow them to plan. To leave a transition deal to much later, business leaders warn in public and in private, would undermine the benefits of any such arrangement as they will have triggered contingency plans for a hard Brexit a long time before the final cut-off date.

In a statement, Catherine McGuinness from the City of London Corporation – one of the main lobbying organizations for the UK financial sector – said: “Clarification around a transition so late in the day will be like closing the stable doors once the horse has bolted.” Chancellor Hammond himself told MPs at a select committee meeting that the transition period was “a depreciating asset,” of increasingly limited value to business the longer it takes to agree.

The financial community in the City of London, in the meantime, has felt increasingly abandoned by the May government, City insiders said. Although a Brexit position paper on financial services was expected in September, it never emerged. And those position papers that have been published refrain from saying much about financial services.

“The UK services industry accounts for 80 percent of the British economy, serving customers across the country, the EU and globally,” said Miles Celic, CEO of the lobby group TheCityUK. “Financial and related professional services are a significant part of that. Regardless of how or when it is done, it is critical for both the UK and the EU to agree how this vital trade can continue and to do so as soon as possible.”

Without a transition agreed early next year there was “a chance” of a recession, one chief economist at one of the major business organizations said on condition of anonymity for fear of wading too far into the political row over Brexit, which has driven a wedge between big business and parts of the Conservative Party, it’s traditional backer. “If it happened very suddenly it would have a big impact. If there was a fundamental breakdown and there was no transition agreed by the summer or autumn then the financial markets could turn.”

‘No Deal’ No Big Deal:

Brexiteers in parliament sound emboldened, choosing to focus on the half full glass of Britain’s current economic picture.

Buoyed by record employment levels and continued economic growth, Cabinet ministers have in recent weeks begun talking down the problems associated with a “WTO Brexit,” the scenario in which Britain falls back onto the standard international trading rules set by the World Trade Organization.

Members of the Conservative Party’s hard-line European Research Group in parliament are privately lobbying British industry groups pushing the merits of a “no deal,” one business leader said. “They are trying to convince us that WTO is not bad, but that’s not what our members think,” said the business leader.

They’re also downplaying the threat to the City of London’s dominant position in European finance. “Do you know how many banks have left for Paris?” one Cabinet minister asked in private recently. “None. It isn’t going to happen.”

Another said: “I’m more confident that we made the right decision today than I was when I campaigned for Brexit in the first place.”

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John Bercow insists MPs have the ‘right’ to try and prevent Brexit

MPs have the “right” to try and delay or even block Brexit when they are given a vote on the UK’s withdrawal deal, John Bercow has said.

The Commons Speaker said it is an “opinion, rather than a constitutional fact” among hard-line Brexiteers that MPs have a “responsibility” to agree to whatever deal may be struck between the Government and the EU.

He said some MPs may want to oppose the deal if they are “not satisfied” with its contents and they are perfectly entitled to try and persuade their parliamentary colleagues to do the same.

His remarks are likely to infuriate Eurosceptics who believe it is the job of parliament to deliver on the outcome of last year’s EU referendum.

The Commons Speaker gave a speech and Q&A to the Hansard Society on Wednesday evening and he reportedly said: “There are actors on the stage who are very strongly supportive of Brexit who will tend to say the absolute responsibility now of members of parliament is simply to vote this through.

“But that is an opinion, rather than a constitutional fact.

“My sense is there will be a lot of people in parliament who will want to be able to vote on the deal.

“There will be some members of parliament who say ‘I want to be able at the end of all this if I’m not satisfied, to say No, to try to persuade other members of parliament to say No, and to hope that No might delay Brexit or prevent Brexit’.

“Do they have a right to argue that point of view? They absolutely do.”

Mr Bercow came under pressure in February this year after it emerged he told a group of students he voted Remain in last year’s EU referendum.

The admission prompted fury among Mr Bercow’s critics because parliamentary rules dictate that the Commons Speaker “must remain politically impartial at all times”.

Mr Bercow also told the Hansard Society that he has a more cordial relationship with Theresa May than he had with her predecessor David Cameron.

Politico reported that he said: “I don’t think it’s a disclosure of state secrets to say that I’ve got better relations with Prime Minister May than I had with Prime Minister Cameron.

“I always got on well with David when we were tennis partners together in the House of Commons tennis team — but things seem to have regressed somewhat after that.

“I get on much better with Theresa May. I do find her extremely courteous and decent and dignified.

“Our personal relations are very good — just as my personal relations with Jeremy Corbyn are very good. Jeremy and I have one particular thing in common, which is we are both fanatical Arsenal fans.”

UK-US trade deal could be ‘big and exciting’

The US President tweeted that a bilateral trade agreement with the UK after it leaves the EU in 2019 could be “very big and exciting” for jobs.

Mr Trump, who backed Brexit, also took a swipe at the EU accusing it of a “very protectionist” stance to the US.

The US President, whose officials are meeting British counterparts this week, has been accused of protectionist rhetoric by his political opponents.

The UK’s International Trade Secretary Liam Fox is currently in Washington discussing the potential for a UK-US trade deal after the UK’s withdrawal from the EU in March 2019. No deal can be signed until after then.

Mr Trump has said he would like to see a speedy deal although free trade agreements typically take many years to conclude and any agreement, which will have to be approved by Congress, is likely to involve hard negotiations over tariff and non tariff barriers in areas such as agriculture and automotive.

On Monday, Mr Fox published details of commercial ties between the UK and every congressional district in the US as a working party of officials met to discuss a future trade deal for the first time. Two-way trade between the two countries already totals £150bn.

Mr Fox is also discussing other issues, including the continuation of existing trade and investment accords, with trade secretary Wilbur Ross and the US Trade Representative, Robert Lighthizer.

At a breakfast meeting for members of the House of Representatives, Mr Fox said his twin objectives were to provide certainty for foreign investors ahead of Brexit and to expand the volume and value of trade with the US.

“The EU itself estimates that 90% of global growth in the next decade will come from outside Europe, and I believe as the head of an international economic department that this is an exciting opportunity for the UK to work even more closely with our largest single trading partner the US,” he said.

Sir Vince Cable, the new leader of the UK parliament’s fourth largest party, the Liberal Democrats, said a US-UK trade deal could bring significant benefits – but he called on the government to guarantee parliament would get a vote on it first.

“Liam Fox and Boris Johnson must not be able to stitch up trade deals abroad and impose them on the country,” he said.

“It is parliament, not Liam Fox, that should be the final arbiter on whether to sacrifice our standards to strike a deal with Trump.”