On the 23rd of June 2016, approximately 48% of the UK (including myself) voted to remain in the EU. 52% voted to leave. As of writing, we’re still not out of the EU, and much “doom” and “gloom” is portrayed. But is it really that bad?
Forecasts of Post Brexit Britain
First things first, majority (if not all) forecasts focus on the opportunity cost of not being a part of the EU almost entirely. In other words, the forecasts are based on how much the UK would grow if it was “business as usual”. That is, if it remained in the EU.
Many forecasts, including the Office for Budget Responsibility’s (OBR) Economic and fiscal outlook – March 2019 – do not fully incorporate the impact of new trade deals.
This is not an accident, however. Because ‘predicting’ the impact of these new trade deals accurately is perhaps impossible. We could venture ‘educated guesses’, but that’s about it.
It’s true that negotiating trade deals is a tall order. Most deals take anywhere between 4 and 8 years according to the OBR’s report. But that is based on historic averages. Sure, they’re reasonably good indicators of the future, but by no means are they certain predictors.
For instance, the estimate of 4 – 8 years per trade deal does not incorporate:
- The reduction of lead times by using technology that hasn’t even been invented yet.
- The dependency of a country on UK’s help for aid or military assistance because of an unforeseen crisis / emergency.
- The possibility of UK introducing “fast track” trade deals which are mutually beneficial.
- What happens if governments adopt lean /agile methodologies to managing trade deals.
- The fact that the UK might be a particularly good export market for certain goods / services, relative to other countries.
Importantly, all of the points above are assumptions. Not certainty.
There is of course every possibility that it will take the UK 4, 6, 8, 10 years to secure good trade deals with non-EU countries. But, there is also every possibility that it might take considerably less time for some non-EU countries.
The UK’s investment in the developers of tomorrow.
The UK started – and is continuing to run – what the FT has described as “arguably the world’s largest government experiment in computing education.”
The investment in helping and empowering kids to learn how to code will reap benefits no forecasting model can predict. Most of the technology we see today has been developed by people who started learning to code in their early teens, maybe just a tad bit earlier.
Today, in the UK, kids are learning to code as early as 5-6 (maybe even earlier).
Can you imagine what they will create?
And create they will. Easily. Because the UK’s one of the easiest places to set up and run a business.
Ease of Doing Business
I tried finding a credible source for the “cost of setting up a business, by country”, but couldn’t really find one. The best I could find was a site called the Global Economy which has a pretty nifty comparison of the cost of setting up a business relative to GNI (or Gross National Income).
According to their site, the UK is ranked last. Meaning it is the cheapest place to set up a company, relative to the GNI.
Do you know how much it costs to setup a company in UK? If you don’t, take a guess. Go on.
Twelve pounds sterling.
Well, strictly it’s £13 since you’ll need to have a minimum share capital of £1.
You can set it up online here. And your company will be incorporated between 24 hours and 48 hours.
Customs Queues in a No Deal Scenario
There’s been a lot of chatter about long queues for Customs checks in a no deal scenario.
If the UK needs to conduct customs checks between Calais (France) and Dover (UK), here’s one way which involves no additional time.
Goods are transported either by train or by ferry.
The travel time by train across the English channel is approximately 30 minutes. That’s more than enough to conduct the customs checks.
The travel time by ferry is longer still, and that means there’s even more time to conduct customs checks.
If they haven’t already announced it by the time you’re reading this, you can bet sooner rather than later, they’ll start doing customs checks in the trains / ferries. Either that, or they’ll likely avoid doing any Customs checks at all, or implement randomised checks.
And if for whatever reason, the delays are from across the channel, it’s not very difficult for the UK to change the port it deals with. There are plenty of ports in the Netherlands! In fact, since Calais port is almost certainly operated by a private company, we can visualise a standard / textbook case of incentives and optimisations.
For the company to maintain or increase its revenue, it’d have to make sure it takes all the necessary steps to ensure the lorries pass smoothly, and any Customs checks that are required are done swiftly.
Failure to do so will mean the business will be taken elsewhere. In other words, the power of competitive forces will step in to ensure that in due course, Customs queues and waiting times will get shorter.
Intelligence and Data
In a world with increasing unknowns, a robust and reliable Intelligence Service / System is priceless. The UK has MI5, MI6, and GCHQ – and God (and HM Government) only knows what else. These 3 alone are some of the most renowned intelligence agencies in the planet.
While there’s talk about the UK losing access to crucial EU crime databases in the event of a no deal scenario, the media appears to have conveniently ignored the fact that the EU would lose access to the UK’s database, too.
The optimal course of action for the UK and EU would be to continue sharing the databases. If this doesn’t happen, it’s likely that these databases will be rented to one another for some price. Rationally, it would appear that excluding each other from accessing the database is in neither’s interest.
Intelligence aside, the UK also often sets the benchmark on how to work with data well. And how to use data to deliver great solutions. Take the primary government website (gov.uk). That framework has been replicated in Australia, New Zealand, and Canada as can be seen by going to any of their Government websites.
It looks almost deceptively simple – “just a bunch of links”. But it’s no accident that you get to exactly what you’re looking for so quickly, and easily.
The UK Way of ‘Doing’
If you’ve ever worked with a Brit, then you’ll know how meticulous the planning and execution of their projects are.
It is no accident / coincidence that buildings created by Brits centuries ago continue to stand tall and strong even today. Britain’s narrow roads are also deliberate. Traffic and gridlock traffic jams appear to have a strong correlation with the number of lanes on roads.
The same is true for example, how the bus you’re waiting for in London just “happens” to arrive within a minute or two of you exiting a tube station.
And indeed, it is no accident that when you lost your luggage at the airport, it just magically arrived at your doorstep free of charge with just one phone call.
What’s common among all these seemingly unrelated examples is the fact that “things just work”.
Of course, they work because of meticulous planning and precise execution – not because of hopes for the best case scenario.
It’s likely that at the time of writing, teams in the Cabinet Office are working on a battery of scenario based analysis, ripping apart every single assumption from scratch, one at a time. They’re rigorously analysing multiple variants of each outcome, and making data backed decisions about how to deal with no-deal.
Why aren’t we hearing about it? Because we don’t need to, just yet.
And we probably won’t hear about all the scenarios either – just the ones that materialise into reality.
Subtlety and “need to know”
The subtle way of operating – be that in Government, business, or even private life – means that we often only hear about things if and when we need to.
While there are many examples that demonstrate this, I figured 2 make particularly useful examples.
Mass Transit: UK vs. Other Countries
Just think of how the flow of information is inside any of London’s tube stations. That’ll give you a pretty good idea of how the Government is likely operating.
King’s Cross is the busiest underground station in London. Here’s all the lines that operate from / to it:
- Hammersmith & City
- National rail
- International rail
As you make your way into any platform in the station and get off the train, you’ll find that you’re easily able to navigate to wherever you want to get to. Even though this might be the first time you’ve visited UK.
I’ve travelled to 21 countries, and used mass transit / public transport systems everywhere.
I’ve yet to see a system that even comes close to the simplicity and functionality of the London Underground.
In contrast, consider the metro in Paris. Unless you’re in the first or last carriage of the metro, you’ll need to walk to either end of the station just to figure out which station you’re at, and how you can switch to another line!
Demonetisation: India vs. UK
On the 8th of November 2016, India announced it will no longer accept Rs500 and Rs1,000 notes as legal currency. Overnight, about 80-90% of the country’s monetary notes were void. People literally died during this “project”. There were queues at local cashpoints akin to what you’d see at a popular restaurant in Central London or Manhattan.
The UK also carried out its own “demonetisation”. It replaced and voided its £5 and £10 notes.
The difference? No one died. No one queued. And no one knew any better.
People carried on with their day-to-day lives. They didn’t need to do anything.
40 Years vs. Several Centuries
The UK’s been part of the EU for about 40 years. It’s existed – and thrived – for centuries before.
It has seen challenges our generation will struggle to even imagine let alone comprehend.
It’s designed and built on a robust system that’s far more powerful than any individual or group of individuals.
It has an unwritten constitution which allows it to preserve culture and history whilst leveraging change.
So the next time you read about more “doom” and “gloom”, take it with at least a tad bit of a pinch of salt.
Because while Britain might well have some of the biggest challenges since the Great War ahead of it, we can trust that she will make it work.