London Daily

Focus on the big picture.

Welcome to the Bright Side of Brexit

Welcome to the Bright Side of Brexit

Regardless of whether or not there’s trade deal, leaving the EU could help some U.K. industries. Here’s a brief guide.

Britain’s exit from the European Union’s single market is expected to cause significant disruption and cost. Yet the upheaval is also supposed to yield opportunity.

The case for Brexit, which convinced a majority of voters in the 2016 referendum and helped Prime Minister Boris Johnson win power, leaned heavily on the purported long-term benefits of being outside the now 27-member EU. They range from new regulatory freedoms, an independent trade policy and a stricter immigration system to reinvent the labor force.

There’s been plenty of gloom since then, not least because the coronavirus pandemic has already sent the economy into a tailspin. Even ardent Brexit-supporting economists acknowledge the likely pain before any gain as businesses struggle to get to grips with how to export to a continent they’ve had largely unencumbered access to for decades.

As Britain and the EU try to thrash out a trade deal by the year-end, here’s some of the potential opportunities for businesses—from fishermen to airlines and insurers.

Rules and Taxes


The U.K. will have more power to shape its regulatory environment and cut taxes. It already has one of the lowest rates of company tax in Europe, but the country could go further. The government could also expand the “patent box,” which reduces taxes on profit from patented inventions to foster research and development. It was constrained by EU rules on state aid.

“Europe is worried the U.K. will set up near-shore competition to the continent,” said Mark Price, former deputy chairman of retailer John Lewis Partnership Plc and a former trade minister. The right tax regime would make the U.K. a lot more attractive as a base to export into the EU, he said.


Britain would have the ability to cut air passenger duty on some domestic flights.


In emerging industries, such as genetically modified foods and genome technology, Britain can take a more permissive approach than the EU, according to Julian Jessop, former chief economist and now a fellow at the Institute of Economic Affairs in London. He noted data protection and regulation of the Internet as other areas where the U.K. would be able to diverge.

In aviation, Britain would have the ability to cut air passenger duty on the return leg of domestic flights, which is currently prevented by a European Commission ruling. Reducing the levy has long been a demand of airlines, which say it would mean cheaper flights.


Financial Services


Insurers may soon fall outside European rules known as Solvency II if a government review started this month is implemented. Companies like Aviva Plc and Legal & General Group Plc would benefit from potential changes permitting them to invest in a broader range of assets while allowing them to take more risk, according to Steven Findlay, head of prudential regulation for the Association of British Insurers.

Brexit could also boost the market for initial public offerings by removing the 8 million-euro ($9.4 million) EU ceiling on the amount companies can raise from individual investors without having to issue a prospectus, said Andrew Chapman, head of investment banking at Peel Hunt. “The U.K. government could look to raise that threshold so that we have a much more liquid and free-moving market,” he said.


Insurers like Aviva Plc could be outside Solvency II European rules.


Outside the EU’s customs union, the U.K. can sign its own trade agreements. Its biggest deal to-date is an accord with Japan. While Britain already benefited from a pact with Japan through EU membership, it says the new agreement is superior in areas such as financial services and data.

Fintech firms such as TransferWise Ltd. and Revolut Ltd., for example, will no longer be restricted by data localization rules, meaning they could expand operations into Japan without needing to build servers in the country. The trade pact will help TransferWise “support Japanese customers with cheaper, faster and more convenient services,” said Venkatesh Saha, the company’s head of expansion for Asia-Pacific.

Fishing


The U.K. will control its fishing waters post-Brexit and British fishermen will be able to expand their catch. Though it accounts for only 0.12% of Britain’s economy and employs 24,000 people, the industry is symbolic after membership of Europe’s single market precipitated its demise.

For a sense of how Britain could make the most of its fishing gains, Iceland provides a model. Fish and associated industries make up 6% of the Nordic country’s gross domestic product, with fish left-overs being used in pharmaceutical and beauty products while fish skin is used to treat injuries.

Food and Footwear


A trade agreement with the U.S. could cut tariffs on products like Scotch whisky, cars and ceramics, and also create more opportunities for exporting services, which make up 80% of Britain’s economy. It could also lead to greater variety and cheaper food by opening up the domestic market to U.S. agricultural products.


WTO tariffs on EU products such as citrus fruit could be dropped.


The U.K. could choose to drop World Trade Organization tariffs on products that are currently taxed to protect the interests of EU countries. Citrus fruit, wine, footwear and clothing would be candidates.

“There are so many products where we currently pay import duties to protect industries in other parts of Europe,” said Simon Wolfson, chief executive officer of retailer Next Plc. “There is very little point having tariffs on these.”

Domestic Industry


Extra costs when trading with the EU will encourage U.K. manufacturers to source more of their inputs locally, said Andrew Underwood, a Brexit supply chain and procurement consultant at KPMG. That will particularly apply to just-in-time manufacturing, he said.

“It’s clearly something organizations are starting to think more about because of the potential impact of delays,” he said. “They can’t afford to wait.”

To help develop domestic production, the U.K. will be able to set its own state-aid rules, meaning it could expand the amount of financial support it gives to promote specific industries. Increasing government intervention in the economy could also help Johnson fulfill his goal of rejuvenating poorer parts of Britain and “level up” the economy.

Red Tape


One industry that’s about to flourish is bureaucracy. From 2021, companies will need to comply with a wave of new red tape to move goods between the U.K. and EU. An extra 400 million customs declarations are expected to be required annually, at a cost of about 13 billion pounds ($17 billion), even if the two sides agree a trade deal.


Warehousing providers may benefit as companies stockpile goods.


As well as customs brokers and logistics specialists, providers of warehousing may benefit as companies stockpile goods in anticipation of border disruption-if they can find the space. The vacancy rate in Greater London is already below 3%, with low levels of availability across the southeast, Manchester, Birmingham, and Bristol because of demand for online retail sales, according to a report by Knight Frank on Oct 8.

Regional ports also may see a boost. With the government warning of 7,000-truck-long queues toward the Channel in a reasonable worst case scenario, goods could be re-routed through Plymouth, Hull and Grimsby.

Unshackling Investment


Whatever happens, at least there will be clarity. That could prompt some companies to ditch investment plans for good. Others may revive them.

“Simply getting Brexit done is going to be a positive because it will lift some of the uncertainty that’s been hanging over the economy and investment in particular,” said Jessop at the Institute of Economic Affairs. “Having independence over trade policy and regulatory policy is a good thing.”

Newsletter

Related Articles

London Daily
0:00
0:00
Close
Unelected PM of the UK holds an emergency meeting because a candidate got voted in… which he says is a threat to democracy…
You Are So Beautiful
Rob Schneider explains California reparations legislation.
Postmodern Jukebox European Tour Version
Who knew badminton could get so intense?
An old French tune (by Georges Brassens) Pomplamoose ft. John Schroeder
Farmers break through police barriers in Brussels.
Sattahip Motor Show 20
London's Iconic British Telecom Tower Sold To Become Hotel
SONATE AU CLAIR DE LUNE - Moonlight sonata
Ukraine Arrests Father-Son Duo In Lockbit Cybercrime Bust
A kiss to build a dream on
US Offers $15 Million For Info On Leaders Of Cybercrime Group Lockbit
Wonderful Tonight - Eric Clapton (Boyce Avenue acoustic cover)
Russia Claims UK Cultural Agency Spied for Ukraine
Mean Blues
Apple warns against drying iPhones with rice
La Chansonnette
Alexei Navalny: UK sanctions Russian prison chiefs after activist's death
Pattaya Addicts
German economy is in 'troubled waters' - ministry
Franz Liszt - Liebestraum - Love Dream
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Dream a little dream of me
New video
Unchained Melody sung like you've NEVER heard!
Tucker Carlson says Boris Johnson wants "a million dollars, in Bitcoin or cash, from Tucker Carlson to talk about Ukraine.
Dave Brubeck - Take Five
Russia is rebuilding capacity to destabilize European countries, new UK report warns
Édith Piaf - Non, Je Ne Regrette Rien (Sofie)
EU Commission wants anti-drone defenses at Brussels HQ
Rondo Alla Turca
Von der Leyen’s 2nd-term pitch: More military might, less climate talk
Kiss of fire
Global Law Enforcement Dismantles Lockbit Ransomware Operation
Tom Jones - I´ll Never Fall In Love Again 1967, 1989, 2001
Prince William Urges End to Gaza Conflict
Israel Cachao López - Guajira Clásica
UK court to hear Assange's final appeal against extradition to the US, where he faces charges related to his journalistic work—the publication of a classified video in 2010 that exposed US war crimes against humanity.
Edward Maya - Stereo Love (feat. Vika Jigulina) (Extended Mix)
About 50-60% kids either chose to be YouTuber or influencer
Strauss - Radetzky March - Karajan
A viral video of Nationals MP Barnaby Joyce lying on a Canberra footpath is celebrated by his media mates.
La vie en rose
European Countries React to Navalny's Death by Summoning Russian Diplomats
The Temptations - My Girl (Smokey Robinson Tribute) 2006 Kennedy Cent
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
Orlando Cachaito Lopez Redencion
English farmers to be offered ‘largest ever’ grant scheme amid food security concerns
Edith Piaf - NON, JE NE REGRETTE RIEN
Cameron government knew Post Office ditched Horizon IT investigation
RADETZKY MARCH-2008-Wien, New Year Concert
EU Calls for Immediate Ceasefire in Gaza Conflict
Only you (And you alone)
EU Vows To Hold Putin "Accountable" After Meeting Alexei Navalny's Wife
Strangers In The Night
EU Launches Probe Into TikTok Over Child Protection Under Digital Content Law
Charles Aznavour - La Boheme
The EU Initiates Naval Mission to Defend Red Sea Trade Routes
Summer time
EU and UK Announce Joint Effort on Migration
Sting and Stevie Wonder - Fragile (from Sting's 60th birthday concert)
Brazil's Lula Likens Gaza Operation to Holocaust, Israel Says "Red Line" Crossed
Aux Champs Elysees
Ministers Confirm Proposal to Prohibit Mobile Phone Usage in English Schools
Stand By Me - Ben E. King (Boyce Avenue acoustic cover)
Microsoft-backed OpenAI valued at $80bn after company completes deal
La Mer (Beyond the Sea) – Avalon Jazz Band
‘Alexei would want to tell Russia not to give up fighting’
She
Rwandan Footballer's Dismissal Sparks Concerns Over UK Asylum Plan
Nathalie Song by Enzo Petrachi Stjepan Hauser Cello
Whisky Challenges China's Baijiu Market During New Year Celebrations
Shape of My Heart - Sting (Boyce Avenue acoustic cover)
Avdiivka - Symbol Of Ukrainian Resistance Now In Control Of Russian Troops
Radiohead - Creep
Putin Critic Alexei Navalny's "Killers" Refusing To Hand Over Body, Say Allies
Quizás,Quizás,Quizás - Andrea Bocelli - Jennifer Lopez
"Historic Step": Zelensky Signs Security Pact With Germany
Perhaps, Perhaps, Perhaps - Multi-Couples
"Historic Step": Zelensky Signs Security Pact With Germany
Pentatonix Havana
20 Tech Giants Sign Effort To Fight AI Election Interference Across Globe
Paula Cole - Autumn Leaves
Joe Biden Accuses Putin of Causing Navalny's Death
Oscar Benton Bensonhurst Blues
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
OH NANANA vs ABUSADAMENTE
Tucker Carlson grocery shopping in Russia. This is so interesting.
Nina Simone - ”I Put A Spell On You”. Vezi aici cum cântă Jeremy Ragsd
Julian Assange's Wife Warns of His Death if Extradited to US
NIGHTWISH - The Phantom Of The Opera
‘A lot higher than we expected’: Russian arms production worries Europe’s war planners
Motorshow 2016 Tanjay Negros Oriental
Greece Legalizes Same-Sex Marriage and Adoption Rights
Monica Bellucci - Ti Amo
Hungarian Foreign Minister: Europeans will lose Europe, the Union's policy must change drastically
Michael Jackson - Billie Jean Milena The Voice France 2018
In Britain Homeowners are receiving CPO’s (Compulsory Purchase Orders) so their homes can be redistributed to migrants
Michael Buble (Help Me Make It Through The Night) feat Loren Allred
Memories Canon In D - Maroon 5 (Boyce Avenue piano acoustic cover)
Matteo Simoni - Marina
Maroon 5 - One More Night
Maroon 5 - Memories
Mark Knopfler - Brothers In Arms (Berlin 2007 Live)
Mark Knopfler & Emmylou Harris - Romeo And Juliet (Real Live Roadrunni
Marina, Marina - The LUCKY DUCKIES intimist live concert at Guimarães
Major Lazer & DJ Snake – Lean On Mauranne The Voice France 2016
Love Theme from Romeo and Juliet - Joslin - Henri Mancini, Nino Rota
LoLa & Hauser - Love Story
Linkin Park Jay-Z - Numb Encore (Live 8 2005)
Hallelujah Mennel Ibtissem, The Voice France Leonard Cohen
Leonard Cohen - Dance Me to the End of Love
Leonard Cohen & Natasha Rostova - Dance me to the end of love
La casa de papel - Bella Ciao
La Camisa Negra
L'italiano (Toto Cutugno) - The Gypsy Queens
Juanes - La Camisa Negra
Jonathan and Charlotte - Britain's Got Talent 2012 Live Semi Final - U
John Powell - Assassin's Tango
Joe Cocker - You Can Leave Your Hat On (LIVE in Dortmund)
Joe Cocker - Unchain My Heart 2002 Live
Joe Cocker - A Whiter Shade Of Pale
Jay Z & Alicia Keys - Empire State of Mind LIVE
Jason Mraz - Im Yours (live)
Jarrod Radnich - Bohemian Rhapsody - Virtuosic Piano Solo
James Blunt - You're Beautiful
James Blunt - You're Beautiful & Bonfire Heart (Live at The Nobel Peac)
If You Go Away - Helen Merrill & Stan Getz (Tribute to Virna Lisi)
I'LL BE MISSING YOU
I Say a Little Prayer
Hotel California ( Eagles ) 1994 Live
Historia de un amor - Luz Casal. Vezi interpretarea Biancăi Sumanariu
Here Comes The Sun - The Beatles (Boyce Avenue acoustic cover) on Spot
Heart - Stairway to Heaven Led Zeppelin - Kennedy Center Honors
HAVANA by Camila Cabello Zumba Pre Cooldown TML Crew Kramer Pastra
HAUSER and Señorita - I Will Always Love You
HAUSER - Waka Waka
HAUSER - Sway
HAUSER - Lambada
HAUSER - Historia de un Amor
HAUSER - Despacito
Great Pretender
Georgia May Foote & Giovanni Pernice Samba to 'Volare' - Strictly Come
Gary Moore - Still Got The Blues
GIPSY KINGS VOLARE Penelope Cruz
Fugees - Killing Me Softly With His Song
French Latino - Historia de un Amor
For A Few Dollars More The Danish National Symphony Orchestra (Live)
Flashdance • What a Feeling • Irene Cara
Filip Rudan - “Someone You Loved” Audicija 4 The Voice Hrvatska Sez
Eric Clapton - Wonderful Tonight
Enya - Only Time
Enrique Iglesias - Bailando (English Version) ft. Sean Paul
Enrique Iglesias - Bailamos
Elena Yerevan Historia de un amor
Ed Sheeran - Shape of You (Official Music Video)
Ed Sheeran - Perfect Symphony [with Andrea Bocelli]
Ed Sheeran - Perfect (Official Music Video)
Easy On Me - Adele (Boyce Avenue 90’s style piano acoustic cover) on S
ERA - Ameno
ELENA YEREVAN- Cancion Del Mariachi-IN STUDIO-2017 DPR
Dust In The Wind - Kansas (Boyce Avenue acoustic cover)
Don't Let Me Be Misunderstood
Despacito x Shape Of You - Pentatonix
Deep Purple - Child In Time - Live (1970)
David Foster When A Man Loves A WomanIt's A Mans World (SealMichael Bo
Dance me to the end of Love ( Pi-Air Design )
Coolio - Gangsta's Paradise (feat. L.V.) [Official Music Video]
Conquest Of Paradise (Vangelis), played on Böhm Emporio organ
Cielito Lindo
Chico & The Gypsies - Bamboleo
Canción Del Mariachi - Antonio Banderas, Los Lobos • Desperado
Camila Cabello - Havana (Audio) ft. Young Thug
Camila Cabello - Havana ( cover by J.Fla )
California Dreamin' - The Mamas & The Papas José Feliciano (Boyce Ave
Buster Benton - Money Is The Name of The Game
Hallelujah Pentatonix
Bobby McFerrin - Don't Worry Be Happy (Official Music Video)
Bob Dylan - Knockin' On Heaven's Door Emilia The Voice Kids France
Besame Mucho - Cesaria Evora
Ben E. King - Stand by Me Sax Cover Alexandra Ilieva Thomann
Bella Ciao
Bella Ciao - INSTRUMENTAL
Beautiful in White x Canon in D (Piano Cover by Riyandi Kusuma)
Bad Romance - Vintage 1920's Gatsby Style Lady Gaga Cover ft. Ariana Savalas & Sarah Reich(1)
BELLA CIAO 2020 - KARAOKE ITALIANO
BAMBOLEO - Gipsy Kings • Antonio Banderas, Katya Virshilas
BAILANDO (original)
Awesome Ukrainian yodeler - SOFIA SHKIDCHENKO (with English subtitles)
Avicii - The Nights
Atom - The Great Gig in the Sky
Aretha Franklin - (You Make Me Feel Like) A Natural Woman (Official Ly
Antonio Banderas - Cancion del Mariachi (Desperado)
André Rieu - Zorba's Dance (Sirtaki)
André Rieu - Can't Help Falling In Love
André Rieu & Mirusia - Ave Maria
Andrew Reyes Elton John - Don't Let The Sun Go Down The Voice 2020 (
Andreas Kümmert Whiter Shade Of Pale The Voice of Germany 2013 Showd
And I Love You So
All About That Bass - Postmodern Jukebox European Tour Version
Alan Walker - Faded (Piano Cover)
Ain't No Sunshine -- Bill Withers (cover by Canen 12 y.o.)
African music
Adriana Vidović - “Creep” Audicija 4 The Voice Hrvatska Sezona 3
Adriana Vidović - “Believer” Nokaut 3 The Voice Hrvatska Sezona 3
A Fistful of Dollars - The Danish National Symphony Orchestra and Tuva
4 Beautiful Soundtracks Relaxing Piano [10min]
2CELLOS - Whole Lotta Love vs. Beethoven 5th Symphony [OFFICIAL VIDEO]
2CELLOS - Smooth Criminal (Live at Suntory Hall, Tokyo)
2CELLOS - Smells Like Teen Spirit [Live at Sydney Opera House]
2CELLOS - Despacito [OFFICIAL VIDEO]
13 Year Old Girl Playing Il Silenzio (The Silence) - André Rieu
094.All About That Bass
00 - SADNESS PART 1
(Ghost) Riders In the Sky (American Outlaws Live at Nassau Coliseum, 1
(Everything I Do) I Do It For You - Bryan Adams (Boyce Avenue ft. Conn
What a wonderful world
Moon river
×