30 January 2024 (Lloyd's List) - FOUR years after Britain's departure from the European Union, none of the most dramatic predictions made by either side in the prolonged and frequently acrimonious national debate on the decision seem to have materialised.
Treasury forecasts that unemployment would hit 6.6% and that house prices would decline by 10% were demonstrably mistaken. Indeed, joblessness has fallen and house prices have continued to rise.
However, Remainers can fairly point to increased border delays and additional paperwork for UK exporters, a bureaucratic burden especially onerous for smaller businesses. That has led to increased costs, reduced economies of scale and an adverse impact on inward investment.
The Brexiteer prognosis also proved wide of the mark. Few of the promised rash of free trade agreements have materialised, and the ones that have been reached with Australia and New Zealand have been widely criticised.
For true believers, the fact that FTAs have not yet been signed does not prove that FTAs will not one day be signed. Hope springs eternal.
Britain at least has membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which the government hopes will boost gross domestic product by 0.08% in the long run.
Unfortunately, the big prize of a deal with the US still looks elusive, irrespective of whether Joe Biden or Donald Trump wins the race for the White House this November.
There is limited upside for divergence from EU regulation if there is to be any hope of continuing to sell goods into the single market, which perforce has to include Northern Ireland.
Where does that leave everything? One widely held analysis suggests Brexit has seen a net economic loss for the UK, equivalent to between 4% and 6% of GDP. But there are too many variables, not least the impact of the pandemic, to proclaim that with any real conviction.
The hard truth, which may be equally unpalatable to hardliners in either camp, may well be that it hasn't made a qualitative difference either way.
What is clear is that no other country has followed Britain's lead. While the issue is being pushed by some rightwing parties in Europe, few polls express widespread popularity for such a move. Frexit and Dexit won't be happening any time soon.
For the Lloyd's List readership - made up of shipowners, port operators, marine insurers and shipping lawyers - the outcome has been similarly nuanced.
Nobody's business seems to have collapsed as a result of EU withdrawal, and as with all counterfactuals, it is impossible to say where things would be if Brexit hadn't happened.
Among the maritime commentators who pitched in to the controversy eight years ago was Anthony Woolich, a partner at law firm HFW, who wrote an article for Lloyd's List in the run up to the Brexit referendum in June 2016, setting out the potential consequences of a 'No' vote.
While he did not explicitly call on readers to back the Remain position, Woolich made fairly plain he did not think Brexit was a great idea. So we recently asked him to revisit his predictions, in the light of what has transpired afterwards.
Woolich's first argument was that Britain would lose trade. It's unclear if it did. The latest research briefing from the House of Commons library found that total UK exports for goods and services combined to both the EU and non-EU countries were lower than their 2019 levels in both 2020 and 2021.
In both cases, exports exceeded 2019 levels in 2022. But these are raw data and pricing has not been adjusted to account for inflation, which was substantial for this period. The verdict is that trade may either be up or down, but we do know it hasn't cratered.
"I'm sure we have lost trade," insisted Woolich. "As a result of Brexit, the EU has introduced various checks on the border which impose costs and delays.
"There are UK businesses, especially smaller ones, that have stopped trading with the EU. It's too difficult, it's too burdensome. The documentation is just too much for them, it's not worth it."
What also hasn't helped is ongoing shilly-shallying on the introduction of controls and inspections on EU imports, which have been put back several times over, most likely because of frank recognition that the UK is not physically ready to handle them yet.
Port congestion - particularly at Dover, which handles much of Britain's goods trade with mainland Europe - has persistently been severe and sometimes acute.
All of this has enraged trade associations such as the British Ports Association and the UK Major Ports Group, whose members have spent upwards of £100m on control infrastructure, only to see the government continually move the goalposts.
As things stand, animal and plant controls are supposed to be introduced from April 30 and safety and security declarations will be needed for all EU imports from October 31. But further delays are not precluded.
White-collar shipping services providers, principally marine insurers, have seen the loss of so-called passporting rights to trade anywhere in the EU, a development Woolich predicted in 2016.
UK-based P&I clubs found a workaround by setting up affiliates in European Economic Area countries, most of them having the fallback in place even before the referendum.
Standard and the old North Group chose Dublin, the UK Club Rotterdam and the London Club went for Cyprus, while West of England was already legally domiciled in Luxembourg. The new entities have, on all accounts, been faring well.
Britannia also set up shop in the Grand Duchy, with chief executive Andrew Cutler describing the move at the time as "very swan like, serene on top but a bit of work beneath the water."
We asked Cutler whether that was still the case. He responded: "The 'swan like' comment referred to the early days of Brexit and our move of domicile to Luxembourg.
"Since then, notwithstanding an expected degree of additional operational complexity, we have moved to a business-as-usual approach. For our members worldwide, there has been no material change. They continue to receive excellent service from our offices around the world, Brexit having had no impact on that."
Woolich's contention is that while companies and marine mutuals have come up with structures to get around the barriers, the barriers are still there. It will always be possible for the European Commission and national authorities to pull the plug.
"It can take a variety of forms. Lloyd's set up an office in Brussels with about 20-30 people and managed to persuade the authorities there to grant them a licence.
"Other countries like Luxembourg have granted licences to entities with fewer people than that," he said.
"How long those workarounds will be allowed to operate by the European Commission is another matter. But yes, structures have been put in place which allow trading to continue."
Euro derivatives trading - which is an important financial services business - is still allowed to take place in London, on a transitional basis. But a lot of people in member states are pushing for a reversal of that stance. If that view prevails, a lot of jobs will be lost.
Another consequence of Brexit, which Woolich also foresaw, is that UK-flag vessels have lost cabotage rights in EU coastal waters and inland waterways.
That is now all gone. But the caveat is that few UK owners were engaged in such trades anyway. Such business was not strictly speaking non-existent, with at least one British owner serving French river ports. But it was not far off it.
"I don't say that is a huge loss to the British economy, because it was limited," Woolwich commented now.
The sole advantage identified in his 2016 article was state aid, from which British shipping companies and ports can now theoretically benefit.
The emphasis here is on the word 'theoretically', as little financial support is likely to be on the table at a time when 'no money left' has become a mantra for both major parties.
"One of the first things the government did when we left the EU was to revoke the EU state aid rules, so those no longer apply.
"We now have the Subsidy Control Act 2022 and that is a much more liberal regime than the old EU state aid regime, in the sense that if the government had any money, it would be able to grant support to British industry, including the maritime and ports sector."
That said, there are still stipulations incumbent on Britain resulting from membership of the World Trade Organisation. But these are a lot weaker.
The Competition and Markets Authority would have to review certain aid schemes, but progress would not be dependent on CMA approval.
Tonnage tax rules could also change and have subsequently been slightly altered, but not on account of Brexit.
"I don't think it's all that significant," Woolich concluded. "The fact that we're not in the EU anymore probably gave us the flexibility to tweak them, but I don't think it's made a massive difference."
Woolich believes he largely got things right. But he is not among the so-called Rejoiners, who want to see Britain back in the EU as soon as possible.
"Rejoining is out of the question for at least a generation. What may happen is that the deal we have with the EU will get softened.
"We'll be politically separate from the EU, economically we will try to become closer to it, so these barriers will in time be reduced. But there's no appetite to have another referendum."
