It has been a hectic week for Brexit. The Government made an enormous breakthrough in our negotiations with the EU, both reaffirming our realistic red lines for withdrawal and the joint resolve by the UK and EU Governments to find a solution.
I am positive as ever that a positive negotiated settlement will be reached that will enable the UK to leave the EU (including the Single Market and Customs Union) in an orderly fashion, enabling us to both trade with the EU and strike trade agreements with countries across the world.
Since the beginning of the negotiations the UK Government has said that, for the sake of continuity, there were some areas we should participate in for the remainder of the EU’s five year budget cycle and that there were some other areas the EU wanted us to pay that were entirely unreasonable.
For example, the EU neglected to insert break clauses into the rental contracts for the buildings of EU agencies located in the UK and thought that we should pay for their relocation. On these areas the EU rowed back on.
The agreement also raised the possibility of the UK opting in on certain programmes, subject to a proportion of the costs, which in some areas, such as science and technology, is entirely reasonable and worth looking into the UK being a third party contributor. After all, 7 of the top 10 European universities are located in the UK, and the only European university located outside the UK in the world’s top 10 is Swiss.
The most important area of this negotiation was retaining the rights of families and individuals who moved either to or from the UK under the assumption they could spend the rest of their lives there. Indeed, it was considered so important by the UK Government that we wanted to negotiated it as soon as possible before anything else, unlike the EU who would rather cynically use this is a bargaining chip.
Whilst it’s a pity that the EU cause unjust delay for these families, it must come as a relief that the agreement has been reached. But this was also a very nebulous area. For example, how to deal with security? The UK negotiating position was that both sides must be able to conduct systematic criminality and security checks on EU citizens applying for settled status, and this was something that the EU reluctantly accepted. UK citizens living in the EU will not lose access to the European Health Insurance Card (EHIC) scheme.
The UK also achieved significant compromises to prevent EU citizens from being treated more favourably than British citizens when it comes to bringing a future spouse into the UK. Had these compromises not been included then I fear it would have been extremely unconducive to building a society at ease with itself over immigration.
The most important compromise made by the EU in the area of citizen’s rights was the role of the European Court of Justice. The EU wanted the ECJ to have complete jurisdiction over interpreting these rights in perpetuity, something clearly incompatible with leaving the jurisdiction of the ECJ. Instead, the ECJ will have an advisory role and British courts will remain in control.
Finally, the Irish border. This was always likely to be the most contentious issue, but I have seen a lot of hyperbole from Eurosceptics and pro-Europeans. To clarify: this does not mean we are remaining in the single market or customs union. Nor will we be accepting laws from the EU wholesale after Brexit.
Instead, the agreement recognised that in some areas that support North-South co-operation, such as tourism and transport, we shall have to find individual solutions. This does not mean that Northern Ireland will be cut off from the UK internal market. Indeed, much of this legislation is devolved already.
Moreover, the UK’s position has always been that the Irish border cannot be discussed without moving talks onto trade. At the beginning of the process the EU was insisting that trade talks can only begin once the UK has left the EU. Thankfully, the subject has now moved on to trade 18 months before the 24 month time limit before we leave the EU and with a transition deal, which will likely be around another 2 years in duration.
The majority of people I speak to who voted Remain in the referendum did not do so out of any extraordinary love for the EU and its manifold institutions, but instead out of concern of a slowdown in trade or even worse, though the UK Government has always been clear that it wishes to avoid it, a no-deal scenario.
All of the signals coming out of Britain at the moment gives me confidence that Brexit will create opportunities, not signal Britain turning inwards.
Since the referendum, which would supposedly cause a year long recession, we have seen the employment rate shoot to record highs. In just 18 months we have seen all sorts of announcements from major companies looking to expand their presence here:
- Deutsche Bank committed to an expanded 25 year renewed lease in its London HQ
- Jaguar Land Rover hired 5,000 extra staff
- Ikea created 1,300 new jobs
- McDonald’s moved their non-US tax base to the UK
- Apple moved its HQ to a newly refurbished Battersea base
- Google committed to a massive £1bn London HQ
- Facebook created 500 new skilled jobs in London
A report by Colliers International found that the UK is the most attractive European country for employers and staff. It ranked London as the best city in the world for business, with 5 other UK cities in the top 20.
London was also found to be the 6th most reputable city. By contrast, New York was 23rd, Paris was 24th and Frankfurt was 26th.
Another ranking in which the UK has outstripped all other major economies is the number of new businesses being established. Last year we saw a year-on-year increase of 6%. Other major economies, such as France, Germany, Italy, Japan and the USA, saw an average two per cent rise. This shows the enormous capacity that business in this country has to adapt to new and quickly circumstances.
There is a particular worry that our exit from the EU will spell an end to Britain’s position as the best place in the world for fintech and financial services. This is a perfectly reasonable concern, given that the financial services constituted 10.7% of our GDP and paid 11.5% of all taxes last year.
However, in the recently updated Z/Yen Global Financial Services Index not only did London remain the best place in the world for financial services, but the gap between London and second place New York extended to the widest level that the index has ever recorded.
The reason for that is primarily our approach to regulation: light touch, ambitious and innovative. Firms know that our regulators seek to support, whereas others seek to control. This is particularly the case in the example of finance, as our banks are also profoundly pro-innovation and seeking to partner with FinTechs, unlike the parochial banking culture in the rest of the world.
The UK will not qualify for equivalency with EU regulations in these areas is absurd. After exit day our standards will be not only equivalent, but identical.
However, one factor just as important as regulatory equivalence is access to talent. This is particularly the case in an industry such as FinTech which is brimming with start-ups. Only recently the Government doubled the number of exceptional talent visas from 1,000 to 2,000. As we leave the EU and its rigid rules of freedom of movement for 500m people of any level of age or degree of skill, I fully expect the number of Exceptional Talent visas to grow yet further and for our applicants to be coming from further afield than Europe.
And that is only focussing on maintaining old opportunities, not opening up new ones. As a Prime Minister’s Trade Envoy I have travelled across West Africa, discussing possible new ambitious trade and investment partnerships.
The UK, is a world leader in so many sectors. But more importantly, we are the location for some cutting edge firms in precisely those areas that rapidly growing economies in Africa and Asia are seeking service-led expertise, such as Technology, Finance, Creative industries and Agri-technology. We are the perfect partners to trade, support and mutually prosper from the developing world’s success.
For many months the Government has given us its assurance that Parliament would be given a vote on the final deal. Whilst I considered this enough assurance, a majority of 4 in the House of Commons chose to enshrine this in the EU (Withdrawal) Bill. Though I do not think that this will change the process of withdrawal, I do hope that this assuages the fears of some that a final deal would be passed without Parliament’s approval.
The final vote Parliament will have to decide on will be between the final deal negotiated between the British and EU Governments, or leaving the EU without a deal. Whilst it is true that no deal is better than a bad deal, I do believe that the progress announced on Friday is proof that we can leave with a comprehensive deal ensuring a continuing close relationship between the UK and EU.
The amount of time that the Government has devoted to Brexit is almost without precedent. After the final day of debating amendments next Wednesday, the EU (Withdrawal) Bill will have been through 64 hours of debates across 8 days, covering nearly 200 pages of amendments. I am confident that it will go through its final stages in a timely fashion.
One step closer to Brexit
With Article 50 having already been triggered, there was never any question that every day brings us closer to leaving the European Union. However, I hope that the progress made in the past week will bring reassurance to those concerned about our withdrawal from the European Union.
The fact that the EU has been willing to make considerable concessions is proof that a positive outcome to these discussions is likely and that a ‘no-deal’ scenario is unlikely.
The fact that discussions have already begun on trade just 6 months into a 4 year process should also bring reassurances to businesses on both sides of the Channel that both sides are committed to an orderly trading relationship after the UK has left the EU.
The next year will be hellish in terms of the public negotiations with hardened Remainers constantly sniping and scaremongering, but the future looks bright for a long term partnership with our EU trading friends and allies. It also looks bright for Britain’s re-entry into the dynamic wider world beyond EU borders.
Note to editors
- Adam Afriyie is the Prime Minister’s Trade Envoy to Ghana.
- He has a strong background in science, technology and innovation.
- He is currently Chairman of the Fintech APPG, Parliamentary Office of Science and Technology (POST) and President of the Conservative Technology Forum (CTF).
- He was shadow Minister for Science from 2007-2010 and has a background in the information services and technology sector.
- To sign the N3R Coalition pledge please download and sign the document here and email it to RunwayConsultation@dft.gsi.gov.uk.
- Adam has opposed a 3rd Runway at Heathrow consistently since he first became an MP in 2005. To read more about is campaign please click here.