by Ivan Botoucharov

Two and a half years on and the realities of Brexit are more daunting than ever. The uncertainty surrounding the future relationship between the UK and the EU has left businesses in the unenviable position of trying to guess the outcome of a convoluted political chess game which appears to have come to a draw. Many have decided to ‘up sticks and go’ by setting up headquarters in Ireland, Germany, France, The Netherlands and other EU member states.

Most recently Panasonic has announced that it is moving its European Headquarters from Bracknell to Amsterdam. They are just one of many Japanese companies which have taken the decision to move away. Among the major brands alone, massive retailer Muji is said to be organising a move of its European headquarters to Germany, while renowned banks Nomura and Daiwa are already setting themselves up in Germany. 

But even more disturbing for those Brexiteers hoping to make the UK a tax haven, is the reason Panasonic has decided to move. As reported by the BBC, “Panasonic’s decision was driven by a fear that Japan could start considering the UK a tax haven if it cuts corporate tax rates to attract business”, Mr Abadie [Panasonic Europe’s chief executive] told the Nikkei Asian Review newspaper.

If Panasonic ends up paying less tax in the UK, that could render it liable for a bigger tax bill in Japan.

Mr Abadie told the Nikkei Asian Review that Panasonic had been considering the move for 15 months, because of Brexit-related concerns such as access to free flow of goods and people.” 

In addition, the realities of the situation have already exposed many of the misrepresentations of the Leave campaign. Their unofficial tagline stating that ‘Once we have settled our accounts, we will take back control of roughly £350m per week’, was publicly derided as “a clear misuse of official statistics” by Sir David Norgrove, Chair of the UK Statistics Authority in this letter. The issue is that the £350m is a gross figure and it doesn’t take into account the money that Britain gets back from the EU or our rebate on top of that. Leaving that aside the negative influence on the economy from trade changes following Brexit will likely be much, much bigger than savings from our EU contributions. 

In an even more dramatic turn of affairs, following a referral by the Election Commission the National Crime Agency is to investigate claims of criminal offences by Arron Banks, the man who made the biggest donation in British political history to the Leave.EU campaign. The Electoral Commission stated that it suspects Mr Banks was not the “true source” of loans to the campaign and that the funds had come “from impermissible sources”. In addition to Banks others being investigated are the Leave.EU campaign, Elizabeth Bilney, who chaired the campaign, and Better for the Country (the company used to finance Leave.EU), as well as other associated companies and individuals. Banks and Bilney have rejected any wrongdoing. 

Meanwhile the British pound has lost over 10% of its value since the referendum. In addition various calculations state that the result of the referendum has already cost Britain between £20bn and £40bn. On top of all that the trade deficit rose to the second highest since records began. 

British businesses and British people more than ever need stability, transparency and clarity on what the future holds. Taking into account the realities of Brexit we are now experiencing, it is no surprise that at least 53 MPs, including 8 Conservative MPs such as The RT Hon Dominic Grieve MP, have called for a second referendum. With Parliament deadlocked, the results of Brexit now more evident than ever and public opinion changing rapidly that may well be the best solution. 

05 February 2019
This text was published in Bullseye issue 75