Brexit – We DO want to hear from experts!!

Tonight, 11KBW hosted a Brexit event entitled “Where Next?” with a fabulous panel of experts.

Indeed, given the short notice planning of the event, and the large attendance, it is clear that we have NOT had enough of experts, particularly not now!

Here are some highlights of what was said.

Miriam Gonzalez opened the session, and identified 3 pillars that the UK needs to focus on:

The relationship with EU

It is vital to understand what the model will look like, and what the new UK Prime Minister is looking for. We need to know hat the template will look like. There are several models, and they are more complex than they look. For example, most exclude fishing. And customs rules are also complex depending on the model.

Whichever existing model we might choose there are “prices” to pay.

Renegotiations of EU bilateral trade agreements

This is related to the first item, and depends on the model, we may simply be able to negotiate these agreements on our own.

Participations in some international organisations, such at the WTO

Agricultural subsidies etc. will be challenging, but on goods and services, there will be complex technical work, but can be done relatively easily.

Lord Warner of Brockley focused on the implications for the NHS, and was clear that the £350 million pounds is not the starting point. He paints a sickly picture of the NHS, having become wedded to acute hospitals, when the majority of hospital care is actually for the elderly not needing “acute” care.

Money is a real issue, but the question is what does the government do.

But the other question is workforce. We have never been self-sufficient on NHS workforce, and we are increasingly reliant on doctors from the EU. We don’t have a way to plug the gap.

We were in a mess, and it gets worse. The real challenge of Brexit is whether the NHS can change business model to cope.

  

Giles Williams of KPMG talked about the implications for financial services. Approximately 80% of the capital markets work of “the 27” is executed in London.

Financial services in London is a conduit to the whole economy across the EU. Large businesses use London to hedge their exposure in a number of areas. Our strength is that “we have good systems”. We did not have meltdown post the referendum. But we also a strong legal system.

Most EU regulation is embedded into UK law, without gold plating in most cases, and will remain.

If you are dealing with the Commission, if you have real substantive evidence to take to the debate, that makes a real difference.

The real danger is that if we don’t get it right, the EU loses access to the capacity we have in London to support their economies and it may decamps to New York, from where it will never come back.

While financial services is perhaps not the most popular sector with the public, it is crucial in putting oil into the UK economy.

Dr Wendy Piatt of The Russell Group talked about the implications for research-intensive universities.

Funding

The Russell Group received £0.5 billion in EU funding last year, more than France of Germany. We may retain this under the new model, but it is doubtful we would do as well as we do. The allocation now is on merit. Without us at the table the formula may change to being on population, say. That would harm the UK.

Wendy also talked about movement of people, and the challenges of bringing and retaining the best talent in the UK.

But she raised a few positives, including that Brexit could result in relaxation of the VAT rules that disincentivise certain collaboration with commercial businesses on research.

Professor Keith Ewing of King’s College London tackled the thorny subject of Article 50.

He talked about the debate at the time of the signing of the treaty, when it was decided that signing was a matter for government, not Parliament.

So they logical conclusion would be that Article 50 can be involved by the Government, without further Parliamentary action. Indeed, he believes that Parliament has already had its say in the Referendum Act.

Rory Stewart MP started by asking for a show of hands from those willing to say they votes “Leave”. Two hands went up. Rory then concluded that everyone else voted “Remain”, which is clearly a false conclusion, and perhaps shows up part of the problem with polls!

He then went on to say that it has been quite convenient being able to defer all issues on the environment to Brussels.

“We need to reassure the world, and we need to surprise it!”

There are 100 countries asking “can we rely on Britain?” and meaning different things.

We need to be everywhere. To be at every table we can be. We need to rebuild the capacities of our government. If we are going to have an international role, we need to mean it. That might mean doubling the budget of the Foreign Office, say.

But there are huge opportunities too. There are very rigid rules and regulations where science has changed, and the law doesn't change as you need too deal with 27 other Member States.