We often hear about the supposedly dire effects that leaving the EU will have on British industry – and all too rarely the other side of the story.
In fact, Brexit offers us the opportunity both to protect the interests of some of our world-leading businesses and to create an even more attractive environment for attracting investment from around the world.
Take pharmaceuticals as an example. Just like banking, which we have written about previously, this industry has no incentive to leave the UK after Brexit. Why? Because our world-leading universities and scientific research facilities aren’t going anywhere – and can’t be easily replicated by would-be rivals on the continent. Even Sajid Javid, the Home Secretary and a Remain supporter, says as much.
It’s very easy, in the heat of the argument over our EU membership, to lose sight of the fact that for businesses and investors there is much more to consider. Regulation and market access are both important, but so is access to first-rate facilities, strong institutions, and large pools of skilled labour. Switzerland has the largest pharmaceutical sector in Europe by market capitalisation – not what you’d expect if the EU were vital to the industry – and in the run up to the vote representatives of leading companies such as Eli Lilly and Bayer UK and Ireland dismissed claims that a Leave vote would damage the sector.
In fact, in areas where Brussels does make a difference surveys suggest that investors would prefer the UK to have a looser relationship with Europe. This isn’t surprising when you consider that excessive EU regulations helped to drive BASF, the world’s largest chemical manufacturer, shifting operations to the United States, or the huge burdens on testing new products imposed by the bloc’s Clinical Trials Directive.
Time and again, the EU has sent clear signals that high technology and cutting-edge research is not a priority in Brussels. In 2015, just a year before the vote, it “plundered” – in the words of the European League of Universities – €2.2billion from Horizon 2020, its programme “funding research, technological development, and innovation”. And don’t forget that Jean-Claude Juncker, the President of the European Commission, fired the EU’s Chief Scientist for political reasons!
Back in 2013, the Government warned that the sheer complexity of EU regulations was holding business back, especially small and medium-sized enterprises which can’t afford the expensive legal experts needed to navigate Brussels’ red tape. Even George Freeman, a rebellious pro-EU Conservative MP, admitted before the referendum that European attitudes towards regulation risked ushering in a ‘dark age’ when it comes to investment in cutting-edge technology and science.
None of this means that sensible collaboration with our partners in Europe isn’t hugely important – just that EU membership isn’t actually a very good way of going about it. In fact, so much of this happens outside Brussels’ structures, and involves so many countries which aren’t EU members, that attempts to claim Brexit is a threat to future cooperation are deeply implausible. We’ll have a closer look at how the UK will be able to work and trade with our neighbours in a future article.