71. Brexit Opportunities Abound

Peter Burke
Chair
Oxford For Europe

13 February 2022

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As you may have noticed Jacob Rees Mogg Esquire – as no doubt he would style himself – has invited the public to submit suggestions on the theme of Opportunities of Brexit. I could not resist replying. Could I possibly suggest that you, after reading this, do the same?

Dear Mr Rees Mogg,

Congratulations on your appointment as Minister for Brexit Opportunities and Government Efficiency (BOGEY). Thank you very much for asking me to name some of the many opportunities posed by Brexit. I’m surprised that you are still looking for these, six years after the referendum, during which time you have spoken of little else. However, if you still need informing, I shall take certainly take you up on your very kind offer.

Brexit presents so many opportunities that I do not really know where to begin. I will have time to mention only a few of them.

I will gloss over the alleged new found rights to put a crown stamp on pint glasses, or to eat fish and chips out of newspapers. Even if these were not spurious, I can hardly believe that these have changed your life for the better, any more than they have mine.

I will equally gloss over the right to establish freeports. This was entirely possible while in the EU, indeed many EU member states have them. They were abolished by the Conservative government of David Cameron because they appeared to bring no benefits to the UK economy. They do however create openings for money laundering, so without doubt they can be included on our list of Brexit Opportunities

What Colour Passport?!!

I will, however, mention the ‘iconic’ blue (well, black, but who cares?) passports, something of which the UK government have felt it necessary to boast. This would of course always have been possible, after all the Croats have had similarly coloured passports throughout their membership of the EU. But there is a very genuine change in UK passports. Until the end of transition, your British passport was just as valuable as my Irish one. It allowed you to live and work without let or hindrance in 32 countries. That number has now dwindled to two, the UK and Ireland. No wonder so many British citizens have been applying for passports from other EU countries, including I note the PM’s father. Your government has continued to boast about the loss of free movement, as if that were in some way a win. It has above all hit citizens of your own country. And for many, particularly those whose work took them into the EU, it has meant the loss of their livelihood.

Leaving this aside, the new UK passports have certainly provided new opportunities. Just ask the employees of the Franco-Dutch firm, Gemalto, who now manufacture them in a factory in Poland. This has of course been at the expense of workers in the De La Rue factory in Gateshead, who made the old burgundy passports.

So let us move on to other genuine opportunities, and there are many….

A grateful Amsterdam

Opportunities in EU financial centres: the city of Amsterdam is no doubt extremely grateful to you and your colleagues. On the first Monday in January 2021, £1.3 trillion (yes, £1,300,000,000,000) worth of euro denominated business was taken away from the City of London and relocated to Amsterdam. But as we now know, this was just the start. The financial centres of Paris, Frankfurt and Dublin are profiting from business previously located in London. So, ironically, is New York. So far the EU has declined to grant long term equivalence to the City of London in the majority of areas of finance, and it will do so only where it is in its own interest. In other words, the UK, at one time the EU’s most powerful financial centre and indeed the base for the European Banking Authority, is now at the mercy of decisions made in Brussels – as in so many other respects. The more it departs from the much criticised EU rules and regulations – which Lord Frost tells us is a ‘National necessity’ – the less it will be able to compete in the European marketplace. Like all other service industries the financial sector was tragically neglected in negotiations on the Trade and Co-Operation Agreement. Lord Frost and his friends devoted all their energies to the fishing industry, which is of the order of 1% of the size of the financial sector. And incidentally I need hardly remind you how that worked out. Just ask the fisherman of Hull, where the country’s largest trawler, the Kirkella, previously responsible for 10% of cod and haddock eaten in the country, is now standing idle as a result of loss of EU markets, and is likely to be sold abroad. So yes, another massive opportunity – for the fishing industries of Norway and the EU, and for whoever buys that trawler at a knock-down price.

The Kirkella (Wikimedia Commons)

Countless British companies have had to establish trading hubs to Ireland and other European countries because the non tariff barriers to exporting between the UK and EU are so substantial. Some have had to relocate entirely – and indeed been advised to do so by HM Government. This has meant phenomenal opportunities to people employed in EU countries and to those who supply them. Not of course that the benefits of offshoring accrue to any more than a very tiny minority of UK residents. But I certainly do not need to remind you, as co-founder of Somerset Capital Management, with its new operations base in Dublin, about this. I’m quite certain that it is an art in which you could give me lessons.

The various shipping lines travelling between Ireland and France are grateful to you. There has been a 3-fold expansion on those routes, at the expense of the landbridge across England and Wales. In the process Holyhead and the Pembrokeshire ports have lost something like a third of their business, but since we’re talking here about opportunities I probably should not even mention such collateral damage, after all you and your colleagues have never done so.

There’s been an increase in opportunities for anybody holding an EU passport. Just one example: British film companies are now preferentially employing dual nationals as opposed to British nationals, because there are far fewer difficulties posed for them in working on shoots in continental Europe.

Crime pays

There are massive new opportunities for the criminal fraternity. With the departure from Europol and the loss by the British police of real time access to European criminal databases, cross border crime has become a great deal easier. And of course we have been told that there is a shortfall of 50,000 customs officers to enforce the import controls which became mandatory on 1st of January. The government is very cagey about telling us how many of these vacancies have been filled, but clearly success has been limited so far, indeed there is an air of desperation. What better opportunity could you imagine for dishonest people who are not averse to a little gentle bribery?

Opportunities for people smugglers (Sandor Csudai) 

There are new opportunities too for people smugglers: they can confidently assure their passengers that, once they have managed to make the perilous crossing over the channel, there is little or no likelihood of them being seen sent back to France. While previously the EU’s Dublin III regulations provided for repatriation to the first safe country, this is no longer the case, France and other EU countries have the right to refuse to accept migrants back, and the numbers repatriated have dropped from several hundred per year to a tiny handful. You may express surprise at the increase in asylum seekers crossing the channel, but this is quite simply a direct consequence of Brexit. While I personally believe that we owe a duty of care to the many people who arrive in this country in a state of distress, I’m not sure this was something which was explained to the people who voted for Brexit.

Inward migration from outside the EU has provided huge opportunities. While overall net migration has remained stable, that from the EU has declined by over 100,000, and there has been a concomitant increase from outside it. You can be quite certain that in trade negotiations Mr Modi and others will wish to ensure that it is residents of their countries which fill the massive staffing gaps created by Brexit. And good luck to them, but again not something which was explained before the referendum.

Manufacturers and traders within the EU are seeing new opportunities. Because of non tariff barriers, their British exporting competitors are in many cases now priced out of the market, and they can trade uncontested on their home territory. Not only that, but they can also continue to compete on reasonable terms in the British market, because this government has been so slow to implement import controls: a full year has passed before they have even begun to do so. This asymmetric trading situation has been as beneficial for our European neighbours as it has been fatal for British industry. And before you say “yes but it is just non tariff barriers” please remember that this applies only to goods of local origin. The UK had in the past been a major centre for transit shipment of third country, eg Chinese, goods. Where they are re-exported to the EU they are also subject to tariffs, making them even less competitive on the continent. I note your call for trade barriers to be lifted, but you seem to forget that, as a choice of this Government, that is no longer a matter over which you have any leverage.

Other third countries can certainly see opportunity. We were told before the referendum that Brexit would open opportunities for ‘global Britain’ to trade with the world outside Europe. There are indeed many new trade deals in place. However all but three are direct cut and paste replicas of the deals the UK had already via its membership of the EU. In the case of some of these it is even worse than that: because of poor proofreading there are treaties which continue to mention EU requirements and bind the UK to them. This is of no possible interest to the third countries in question, but it would be of enormous interest to those satirists who care to look for evidence of gold plated incompetence on the part of British negotiators.

The three exceptions are Japan, Australia and New Zealand. In the Japanese case the differences from pre existing treaties are mainly cosmetic. In the case of Australia and New Zealand, however, it is those other countries which are the net beneficiaries. Liz Truss, when in her previous post, negotiated in haste and desperation, producing deals which allow preferential access to the UK market, without requiring Australian / NZ exporters to adhere to the environmental and animal welfare standards which bind British farmers. No wonder those British farmers are feeling angry that they are being treated as second class citizens in their own country. The much vaunted trade deal with the USA is no nearer to happening than it ever was. On the contrary, Biden’s America is working hard to deal preferentially with the EU. It has now lifted steel tariffs from the EU but not from the UK. So yes, big new opportunities for steel manufacturers around the world to profit from the UK’s discomfiture.

Lucky Northern Ireland

It may or may not surprise you to reflect that one of the net beneficiaries of Brexit is Northern Ireland, despite the howls of discontent emanating from your former friends in the DUP. As has been pointed out in the past by some of your ministerial colleagues, Northern Ireland is in the unique position of benefiting from membership both of the United Kingdom market and of the European single market and customs union. This has given businesses in Northern Ireland a competitive advantage relative to those in Great Britain, and in the medium to long-term it will become a very attractive destination for British enterprises to relocate to. You may well ask yourself why it is that Great Britain has chosen to walk away from a similarly advantageous position.

As a doctor, I myself have been a beneficiary of Brexit, though not in a way I would welcome. The already ruinous staffing crisis in the NHS has become significantly worse since something like half of my medical colleagues of EU origin, who used to constitute about 10% of the medical workforce, made the decision not to stay in a country in which they no longer felt welcome. This, at a time of phenomenal crisis caused by the pandemic, has made it almost impossible for GP practices to recruit, and therefore I, as a retired partner and now locum, find myself inundated with offers of work, on a scale which was previously unthinkable. It is an opportunity but it is one which I would very much rather not have, as I believe firmly in the NHS and I am greatly pained to see it brought to its knees in this way.

Skills shortage based opportunities are occurring, as we know only too well, in many other occupations. To name but a few, veterinary, haulage, agriculture, and abattoir work. The effects on the British public have been substantial. Just one of many examples is the fact that 100,000 pigs are in the process of being incinerated rather than finding their way to the dinner table. Another is that for the first time this Christmas, we were eating imported turkeys, solely because there were not enough suitable workers to process the UK’s normally sufficient output. But yes, an opportunity for turkey farmers outside the UK.

The Elections Bill, currently before the Lords

This government has certainly gained some new opportunities. With very little public scrutiny it is managing to roll out one piece of repressive legislation after another, all calculated to strengthen its hold on power. The Police, Crime, Sentencing and Courts Bill, the Elections bill, the Judicial Review Bill and the Nationality and Borders Bill all contain provisions which give this government the ability to stifle opposition and to diminish citizens’ rights. And furthermore, now being outside the EU, Mr. Johnson does not have to put up with unwelcome scrutiny or pesky interference from Brussels as his new best friends, Mr Morawiecki in Poland and Mr Orbán in Hungary do. You may welcome this, but I am not sure that many of your fellow citizens have reason to.

But of course the real prize goes to Mr Putin. He now finds himself amply rewarded for his hard work in 2016 in smoothing the path for Brexit. Not only has this led to a man being at the centre of British power whom he can manipulate, not only is he seeing his friends being given seats in the House of Lords, but he is looking west to a European alliance which is divided and diminished and whose members are devoting as much energy to bickering among themselves as they are to dealing with the threats he is posing. He has managed to distance the UK not only from its former allies in Europe, but, as a bonus, from Biden’s America. No wonder he has such new found confidence that he can threaten to walk into Ukraine with virtual impunity. As for sanctions – see below. Opportunity indeed!

You might say that..

The only MP to be pictured recumbent in the Commons – the image screams ‘see if I care!’

Yes, you will say, but is all this not compensated for by the early rollout of the Covid vaccine, which would have been impossible without Brexit? The reality is that that happened in 2020, at a time when the UK was still living under the rules and regulations of the EU. It would have been open to any other member states to act in the same way, as has been confirmed by Dr June Raine, chief executive of the MHRA – however, in an act of solidarity they chose not to.

Next you will no doubt tell me of the UK’s freedom to abolish VAT on fuel. But even if this is true, of what benefit are such freedoms unless they are exercised? And if they are not exercised at a time of unprecedented rises in fuel prices, when will they ever be?

And perhaps you will tell me that the UK is now free to exercise an independent sanctions regime. The whole point of international sanctions is that they place unified pressure on errant regimes. They require negotiation and agreement, and foreign states who choose to exercise their own discretion are going to be set against each other and picked off one by one. This is no benefit, it is a handicap. Once again, Mr Putin is a happy bunny.

You may tell me that the UK is now free to go back to the use of imperial measures. Those who hanker after imperial days ignore the fact that metric units are not just a European phenomenon. They are now used throughout the Commonwealth. The EU never prevented the UK from continuing to use its pints and miles, indeed I’m sure our competitors around the world are delighted by the way in which British industry is still hampered by the need to use dual units. This is a non benefit if ever there was one.

You may wish to remind me that the UK is no longer bound by the EU’s CE mark and can implement its own UKCA mark. Have you however wondered why it has been necessary to postpone the introduction of this measure, or why it has been producing howls of protest from right across British industry? Perhaps it has some connection with the CE mark being not only European but a world standard, and with the fact that British manufacturers, half of whose output goes to the EU, will still have to adhere to European standards regardless, so will have not one but 2 regimes to worry about?

Real Benefits?

In short, the benefits of Brexit are multiple and widespread, and I have chosen only a small sample. What they have in common is that none of them either directly or indirectly benefit the average resident of the UK. This was made clear, should you need reminding, by the recent report of the Public Accounts Committee. I need not tell you that the committee is far from being a nest of Marxists or Europhiles. Nine of the 16 members, including the redoubtable Mark Francois, are conservative MPs. While they might have felt reluctant, under the beady eye of the then Leader of the House, to speak their minds in parliament, they have been forced in a more honest less adversarial environment to admit that for the UK economy Brexit is a lose-lose game. They found no reason to quarrel with the government’s own estimates, through the OBR, that Brexit would shrink the UK economy by 4% relative to an alternative course of action. If you have not already seen it, I would recommend looking at the Davis Downside Dossier, which at the time of writing lists 531 harms caused by Brexit, balanced against 18 benefits. Should you think this is a rather biased selection, I would refer you to the Tory party’s house newspaper, the Daily Telegraph, which wishes you “good luck searching Brexit opportunities”.

A Failed Experiment

Even the blindest of observers must now recognise that Brexit is a failed experiment and that the way forward is not to pretend that the UK would benefit from greater and greater isolationism, but rather to accept the stark reality and do what can be done to mitigate the damage.

It is difficult after all these years to eat humble pie and change course, but in the words of Margaret Thatcher – who incidentally was the founder of the Single Market and would never in her wildest imaginings have chosen to leave the EU – there is no alternative.

Yours,

PB

If you want to tell him what you think, try:
Jacob Rees-Mogg, House of Commons, London SW1A 0AAEMAIL: jacob.reesmogg.mp@parliament.uk (yes, he does have an email address!)


Please also keep an eye out for our regular series of meetings featuring brilliant speakers. Upcoming: 24th February. Details here.

See Also:

https://www.facebook.com/OfEcomms

https://www.facebook.com/oxfordstays

Twitter: @Oxfordstays

European Movement petition: Let’s move on from Frost: click here to sign.

The views stated here are those of the author, and not necessarily those of Oxford For Europe

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One thought on “71. Brexit Opportunities Abound

  1. Great letter. But, as I am sure you know, JRM is really aiming to make the UK a low tax, low public spend, low regulation country. This will benefit the rich at a cost to those less well off. The rich can always buy themselves an EU passport if things get too bad. In the meantime they are free to bleed the country dry.

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