Britain remains an attractive market for foreign companies to invest in despite the fallout from Brexit, Britain's High Commissioner to Singapore Scott Wightman said on Wednesday (Aug 17), as he pointed to an array of factors, including the City of London's infrastructure, its world-class research institutions and its position as a hub for creative talent that investors can exploit.
There are fears that Britain's access to the European Union (EU) single market would be threatened following a referendum on June 23 that saw 51.9 per cent of Britons voting to leave the EU. Banks in Britain are currently granted a "passport" to offer their services across the EU from their UK base, and there are concerns that those rights may be taken away as a result of Brexit.
"There are many things that make the UK attractive for foreign companies to invest," Mr Wightman told The Straits Times Global Outlook Quarterly Briefing forum, the last in the series before the annual Global Outlook Forum in November. "We have the most flexible labour market in Europe, the position of the City of London, the strength of our universities and our world-class science and research institutions as well as the infrastructure that we've got and will continue to invest in,"he said.
"London itself provides access to the greatest concentration of creative talent on the planet, so I think there are many reasons for people to invest and access to the single market is only one of them," he added.
"While it remains to be seen what kind of single market access Britain will have going forward, I am deeply sceptical of the idea that lots of financial services companies are going to break out and move to Luxembourg or Frankfurt or Paris. People choose London because they want to do business there and because for more than 300 years, the city has shown itself capable of adapting to whatever shocks the planet has thrown at it," he said.
But while Mr Wightman was optimistic, another panellist at the forum, Mr Richard Jerram, the Bank of Singapore's chief economist, said there was potential for damage to Britain's financial services sector as a result of the vote.
"There is going to be damage to financial services because at the moment the City of London has the rights to operate freely in the EU and it is not clear if that right will continue. So banks will naturally put in place some hedging mechanisms to build overseas businesses in case that right becomes tarnished," Mr Jerram said.
The issue of Britain's attractiveness to businesses was one of several themes discussed at the forum, held in partnership with sponsor OCBC Premier Banking. The forum also discussed Britain's post-Brexit economic prospects, the difficult negotiations with the EU that loom ahead, as well as the impact of next year's elections in Germany and France on the departure talks.
Panellists at the forum included The Straits Times Foreign Editor, Ms Audrey Quek, and the paper's Assistant Foreign Editor, Ms Tan Dawn Wei, and was moderated by the paper's Managing Editor, Ms Fiona Chan.
Drawing on her experiences living in London and witnessing the strong Eurosceptic mood in places such as Boston in Lincolnshire and Romford in East London where she reported from, Ms Tan said the Brexit result would not have been much of a surprise in Britain's working-class strongholds.
Ms Quek spoke about the domestic and external factors that may influence the complicated Brexit negotiations between Britain and the EU, including whether the EU drives a hard bargain, the state of the global economy, the state of Britain's economy, and how British Prime Minister Theresa May handles the demands of a divided public.
Outside of Britain, next year's elections in France and German could also influence the Brexit talks.
Wednesday's forum followed two other briefings held earlier this year. The first quarterly briefing, held in February, dealt with the Jan 14 terror attack and turbulence in Indonesia. The second, in May, focused on China and its many challenges, from a slowing economy to rumblings in Hong Kong and discord with Taiwan's independence-minded President Tsai Ing-wen.
The Global Outlook Forum in November is expected to bring on stage senior journalists from ST's global network and some of Asia's sharpest minds to analyse regional trends. idayus@sph.com.sg
