Almost half of British firms considering move to Ireland

ALMOST half of British firms surveyed said they would like to move their organisation to Ireland.

Research from British think tank Policy Exchange also found that of the senior managers surveyed one in four have either considered or are currently considering whether to relocate their businesses out of Britain.

This compares with just 2% planning to add to their British operations.

More than one in 10 firms are actually planning to leave Britain in the next year. Younger professionals especially were interested in moving abroad, with Ireland cited as one of the most favoured locations.

Ireland’s 12.5% corporation tax rate is believed to be one of the main incentives for firms in deciding to locate here. The high living costs, poor quality of life, weak economic outlook and the tax burden were revealed to be the major factors why firms wanted to move from Britain.

The report’s author, Policy Exchange research fellow Ted Sumpster, said: “There’s nothing pre-ordained about London’s reputation as one of the best places in the world to do business. Financial services is a highly mobile, globalised industry where the key people and firms are able to move to wherever they can best achieve their goals.

“Britain is in danger of driving away talent. In other words, we could end up killing the goose that lays the golden egg.”

Some British firms have picked Ireland as a location to base their firm in the last few years. Zurich Financial Services has been in negotiations with regulators over its desire to centralise its European life assurance business in Ireland, with the British office becoming a branch of the Dublin headquarters, following a similar move in 2009 of its general insurance business.

Aviva, Britain’s second largest insurer, also established a single holding company for its European operations in Ireland and, while these latter two moves didn’t involve a substantial movement of personnel, the report said they illustrate that some businesses are seriously considering alternative domiciles for structuring themselves.

Other locations being considering include the Channel Islands and Switzerland.

The report said 24% of those planning to relocate will do so within the year, rising to 54% within two years.

“The evidence does not suggest we are on the verge of an exodus from the City, yet the reality is that businesses and individuals have already left and will continue to do so, leading inexorably to a slow, sad demise of the City as a premier world financial centre.

“Once the momentum starts, attracting talent back to London will be extremely difficult. If the UK wants to retain its pre-eminence in this sector, then the key is to lure more of those enterprising and globally mobile individuals and businesses, not fewer,” said Mr Sumpster.