Brexit — What does the UK need to do immediately beyond negotiating with the EU?
With Brexit now a reality, the UK needs to move urgently to preserve its competitiveness and influence while gaining leverage in any EU negotiations. Apart from finding and appointing mature leadership to navigate the process — a hard enough task — the UK needs to do a number of things immediately to take full advantage of Brexit and mitigate its risks beyond waiting for EU negotiations to be completed.
Go on a free trade agreement signing frenzy: The biggest gain the UK has in leaving the EU is the ability to bilaterally negotiate treaties. The greatest opportunity lies with Asian countries (especially China and India) the EU has been unable to work with due to internal bickering among its members. Getting a US pact up and running after President Obama’s departure should also be a priority. While American domestic political priorities would be an issue, the UK is generally viewed as the “right sort of country” to share a trade deal with by even the most anti-free trade sections of society. These actions would swiftly restore confidence in the UK’s importance and relevance for business, and allow for much needed negotiation breathing room with its former EU trading partners.
Focus on Ireland and the London financial industry: London remains the top financial hub destination in the European continent, not only because of its “EU passport” but also due to its ecosystem and lifestyle. While Frankfurt and Paris are looking to sweep in, the fact remains that world trades today are being executed electronically, and banks only need to keep a “regulatory office” somewhere in the EU — a role easily assumed by the much more flexible and business friendly Ireland. With a few changes in the law and under-the-table cooperation of the Irish, the UK could easily retain much of its financial industry. Frankly, no one in the financial services industry is clamoring to run off to a socialist and taxing France, or to the unfortunately dreary Frankfurt (Berlin would have been another matter). A sweetheart deal with Ireland would allow the UK to keep most of its financial dominance intact while Ireland could create thousands of jobs and gain new sources of revenue.
Reap the benefits of being out of EU regulations as early as possible: A massive and comprehensive reform package that cuts out the most disliked EU regulations, and preserves the best of EU regulations, needs to be adopted early on to restore business confidence and set a framework for any FTA negotiations. Emphasizing great regulatory frameworks would encourage businesses to set up in the UK to take advantage of superior regulatory assurances. This is not an easy process, and therefore the quicker it is started, the better for all the stakeholders.
Keep the “valuable immigrants”: Countries such as Canada and Australia have developed legal immigration systems that benefit their societies and economies. With more than half a million EU immigrants in the UK, the government needs to urgently figure out who are the most desirable and then create a policy to give them assurance and certainty. This would mean creating a points system based on profession, qualification, and economic contribution. Such a system would seek to keep the most qualified EU residents by offering immediate British permanent residency, leading to citizenship. A measured and compassionate exit plan for all EU nationals not considered a priority would have to be in place for the rest. Accusations of classism and racism will be raised, and many who are qualified will fall through the cracks. If the UK can manage the process well, however, it would be able to create and expand its deep pool of talent, and keep its promise to the “leave” camp on immigration.
Get the young to work: The youth unemployment rate is 14.4 percent compared with 5.7 percent (2015 numbers) in the UK. A large number of these entry-level jobs in the rest of the EU have been taken by immigrants who are willing to work longer hours and under worse (but not terrible) conditions compared with the local populations. Britain’s youth also face a serious alcohol and pot problem — much higher per person that almost every other comparable country. The UK has the opportunity to drastically reduce youth unemployment if it can properly figure out a way to put this segment to work. If the above suggestion on immigration were implemented, a large number of entry-level positions would presumably become available to young British citizens and residents. Short training programs — and rehab assistance, if needed — with the most affected industries (tourism, for example) taking the lead would go a long way toward showing a positive Brexit outcome.
Brexit will be traumatic, but as it’s been said, never let a crisis go to waste. The UK has a short opportunistic window to reinvent itself and make the most of the mandate given by its people.
The author is a serial family business entrepreneur, an educationist, and an armchair philosopher. At some point he published a national best-selling book (fiction), and more recently is known for his work in cloud computing and design think.
