Europe Who benefited from Brexit?

[Maciamo]

One of the main arguments for Brexit was that Britain would be able to negotiate its own trade deals with other countries on its own. Nearly 5 years after Brexit has come into effect the UK has only negotiated trade deals with Japan, Australia and New Zealand, and as this video explains none of them are particularly good deals for Britain. With Trump preparing to impose import tariffs of 10% or 20% on all countries, the British economy is going to suffer even more.

The most surprising is that the new British Prime Minister, Keir Starmer, despite being an opponent of Brexit, doggedly refuses any discussion to rejoin the EU, or even to join only the Single Market (like Norway and Iceland).

That made me wonder whether anybody in the UK actually benefited from Brexit. I asked ChatGPT. Apart from the obvious fact that British companies are sourcing more goods domestically, which has bolstered local supply chains, I could only find one sector of the economy which apparently benefited from Brexit: the fishing industry.

The UK government reports that quotas for British fishermen are set to increase over five years by an amount equal to 25% of the value of the EU catch in UK waters, estimated to be worth £146 million. That's a very meagre sum though, make riverland to a bit more than £2 per British citizen. To put this in perspective, the average Briton was nearly £2,000 worse off in 2023 as a direct result of Brexit.

So after doing my research I couldn't find any evidence that any sector of the British economy (besides fishing) actually benefited overall from Brexit. It's all negative.

 

[Maciamo]

I think I've finally figured out who really benefited from Brexit. Funny how the mainstream media failed to mention it, although there is little doubt that this is the main reason why the conservative party pushed for Brexit and resorted to all kind of lies to deceive the population. That's also why Keir Starmer is so reluctant for the UK to rejoin the EU. He must have a lot of pressure from powerful people.

Before Brexit, the European Union was actively pursuing initiatives to combat tax evasion and money laundering, which included measures that could impact the UK and its Overseas Territories (OTs). The EU’s efforts were focused on increasing transparency and curbing the use of jurisdictions with lenient tax and regulatory systems for illicit financial activities. These measures would have likely made it harder for the UK and its territories to shield financial activities from scrutiny.

Here is a summary from ChatGPT:

Key EU Initiatives Targeting Tax Havens and Financial Transparency:

1. Tax Blacklist:
- In 2017, the EU established a list of non-cooperative tax jurisdictions, targeting countries and territories with weak tax transparency, harmful tax regimes, or low corporate tax rates.
- Some UK Overseas Territories, like the Cayman Islands, Bermuda, and British Virgin Islands, faced scrutiny and were temporarily added to this list for not complying with EU standards.
- The UK was pressured to ensure its territories met the EU's transparency requirements.

2. Public Beneficial Ownership Registers:
- The EU required all member states to adopt public beneficial ownership registers, which disclose the ultimate owners of companies.
- This regulation also applied to overseas dependencies linked to EU member states. The UK faced pressure to impose similar rules on its territories, which had traditionally resisted public disclosure.

3. Anti-Money Laundering Directives (AMLDs):
- The EU passed successive Anti-Money Laundering Directives, which demanded stricter due diligence and transparency from financial institutions.
- These rules included reporting on suspicious transactions, automatic exchange of information between tax authorities, and stricter requirements on trusts and shell companies—a common feature in many UK territories.

4. Country-by-Country Reporting:
- The EU pushed for country-by-country reporting (CBCR), requiring multinational corporations to disclose profits, taxes paid, and activities in each jurisdiction. This initiative aimed to reduce profit shifting to tax havens, a practice facilitated by some UK OTs.

Implications for the UK and Its Territories:
- Pre-Brexit UK Stance:
The UK, as an EU member, often resisted stricter rules on tax havens, lobbying for a more lenient approach to protect the financial services industry in London and its overseas territories.

- Potential Impact on OTs:
The EU’s measures, if fully implemented, would have likely pressured British Overseas Territories to align with EU standards on financial transparency and tax cooperation, reducing their appeal as tax havens.

Brexit as a Shield:
Brexit removed the UK's obligation to comply with new EU regulations. Post-Brexit, the UK has more freedom to set its own financial transparency rules and to decide how much pressure to place on its Overseas Territories. Some critics argue that Brexit allowed the UK and its territories to avoid stricter EU-led financial regulations.

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It's hard to estimate how much money is hidden in tax haven in British overseas territories but the estimates I found range from £5 trillion to £50 trillion ($63 trillion). The upper estimate would be the equivalent of $1 million per British citizen! Of course a lot of this money belongs to people from all over the world not just British citizens.

That would explain why the current Labour government does not even want to consider rejoining the Single Market like Norway and Iceland.

According to chatGPT:

Certain EU laws, such as anti-money laundering (AML) and financial transparency regulations, also apply to EEA countries to ensure fair competition and financial integrity.

While the UK would not be legally bound to impose EU financial transparency rules on its OTs as part of the EEA, there would be significant political pressure:

• Access to the single market requires cooperation on financial crime and tax evasion.
• The EU might demand stricter oversight of the OTs as a condition for the UK's market access, especially given the reputation of some territories as tax havens.
• Similar pressure was applied to Switzerland, another non-EU country with financial ties to the single market, which has adopted some EU financial transparency measures.