After Brexit ... the chaos will continue
The best radio station in the UK is the BBC World Service. You may disagree with me and cast your vote for some other station, but you’d be wrong. There are two reasons why I think the World Service is such a brilliant station to listen to. First, it covers political developments that typically are ignored in mainstream media. If you want to know what is going on in Africa, for example, and how China and Western countries are indirectly competing for influence on that continent, then the World Service is the station to listen to. Second, the World Service, because it is intended for listeners all over the world, tends to provide a truly international perspective on developments in the UK. And this provides a valuable perspective that many politicians and investors here in the UK miss. One of my favourite programs and podcasts to listen to is their weekly economic roundtable “In the Balance” and last weekend they had a fascinating discussion about Brexit and the world after the UK has left the EU. It is a far more substantial conversation about the mess the current government has made of the Brexit negotiations than the polemic editorial in Politicothat caused a lot of waves last week – though the complaints about the British political class are similar.
If you listen to “In the Balance” you can almost hear the representative of the German Chamber of Commerce and the Dutch journalist covering UK politics shaking their heads about the lack of preparation for a post-Brexit world. One statistic that really drove home the difference in preparation between the UK and the rest of Europe was the number of customs officials that the Netherlands have hired in order to prepare for additional workflow after Brexit. The Dutch are hiring 1,000 additional customs officials to be able to handle up to 10 million additional checks per year.
I then looked up how many customs officers other countries are hiring to prepare for Brexit. It turns out that Germany and Ireland have been hiring and training roughly 1,000 customs and veterinary officials since summer, while France has been hiring roughly 700 people. And in the UK? First, the Home Office was unable to say how many customs officials were employed in the UK to begin with. Then it turned out that it has hired only 300 customs officers so far. The government is in the process of spending another £2bn on no-deal preparations in the New Year, but that is almost too late. After all, it takes time to hire and then train customs officials and I wonder if it can all be done in three months or less.
But who cares about Brexit. No matter what happens after the 29 March 2019, the next step that nobody is talking about so far are the negotiations between the UK and the EU on a trade deal for the time after the UK has left the Union. Brexit enthusiasts claim that the UK could strike trade deals with the US and other countries and even become kind of a European version of Singapore – a finance and trading hub thanks to liberal trade laws and – let’s say – “more flexible” corporate and tax laws. How unlikely this is going to be can be inferred from the comments made at the end of the World Service show where the German representative was adamant that Germany – and by extension the EU – will insist on “equivalence” of UK laws and regulations with EU laws and regulations before agreeing to a free trade deal. In other words, the free trade deal with the EU will only come to pass if the UK implicitly agrees to implementing EU standards domestically. Turns out taking back control is going to be a lot harder than many people think.
Number of customs officials hired for Brexit
Source: Reuters, The Independent, German Customs Authorities.