Brexit? It’s the UK’s golden op­por­tu­nity

Au­thor and com­men­ta­tor says leav­ing Europe is Britain’s chance to strengthen its eco­nomic ties with China

China Daily European Weekly - - LAST WORD - By ANDREW MOODY an­drew­moody@chi­nadaily.com.cn

Liam Hal­li­gan be­lieves Brexit of­fers an op­por­tu­nity for the United King­dom to deepen its eco­nomic and trade re­la­tion­ship with China.

The 48-year-old eco­nomics com­men­ta­tor says the main ad­van­tage will be in en­abling it to strike a trade deal over ser­vices, with the UK be­ing Europe’s largest ex­porter of fi­nan­cial ser­vices.

“We can only cut trade deals at the mo­ment as part of the Euro­pean Union, and the EU is not go­ing to em­pha­size ser­vices be­cause it is more in­ter­ested in em­pha­siz­ing other stuff, like agri­cul­ture and Ger­man man­u­fac­tur­ing,” he says.

Hal­li­gan, speak­ing in a cafe in Mill­bank at the heart of Lon­don’s West­min­ster, is the au­thor — with Ger­ard Lyons — of a new book, Clean Brexit, which ar­gues the case for the ben­e­fits of the UK leav­ing the EU.

He says too much has been made of the abil­ity of the EU to strike trade deals us­ing its eco­nomic clout, when its track record of be­ing able to do so is quite poor.

“There is no trade deal be­tween the EU and China. There is no trade deal be­tween the EU and the US — and th­ese are the two big­gest economies in the world, that count for a huge slice of global trade,” he says.

“Peo­ple say the EU has trade deals with 64 coun­tries, but the re­al­ity is more like 30, be­cause many have not been rat­i­fied or are not op­er­a­tional. A great many of them also are with mi­crostates, re­ally tiny places, like Jer­sey, Guernsey and the As­cen­sion Is­lands, for in­stance.”

The com­men­ta­tor, who is now a res­i­dent pan­elist on the CNN pro­gram

CNN Talk, be­lieves that leav­ing the trade bloc will en­able the UK to build on its “golden era” re­la­tion­ship with the world’s sec­ond-largest econ­omy, which was forged on Pres­i­dent Xi Jin­ping’s state visit to Britain in Oc­to­ber 2015.

“I cer­tainly think there will be a lot more scope for Britain to sell its ser­vices in China. The Bank of Eng­land has al­ready got a swap fa­cil­ity with the RMB, one of the first out­side China to be set up,” he says.

He be­lieves there is a nat­u­ral part­ner­ship be­tween the UK and China be­cause of the for­mer’s long­stand­ing ties with Hong Kong.

“We ob­vi­ously have, you know, un­par­al­leled links with Chi­nese fi­nance, given the his­tor­i­cal legacy of Hong Kong. We ob­vi­ously have gen­er­a­tions of Bri­tish pro­fes­sion­als in fi­nance and law, in­surance and ship­ping liv­ing in that part of the world, where we are known and re­spected.

“So there is tremen­dous scope for the City of Lon­don and fi­nan­cial ser­vices and pro­fes­sional ser­vices in gen­eral. It is some­thing we are world­class at.”

Hal­li­gan says he de­cided to write the book with Lyons, an in­ter­na­tional econ­o­mist and for­mer eco­nomic ad­viser to For­eign Sec­re­tary Boris John­son, when John­son was Lon­don mayor, be­cause there was a need to scotch some of the false ar­gu­ments about Brexit, such as the City of Lon­don los­ing its pre­em­i­nence as a fi­nan­cial cen­ter, with all of the jobs go­ing to Frankfurt and else­where.

“Frankfurt is like the num­ber 29 fi­nan­cial cap­i­tal of the world, Paris is num­ber 34, ac­cord­ing to the data in our book. We are not com­pet­ing with Frankfurt and Paris but with Hong Kong and New York, and maybe even­tu­ally it might be Shang­hai, I don’t know,” he says.

“The City (of Lon­don) is a glob­ally pre­em­i­nent fi­nan­cial hub, and that is not go­ing to change af­ter Brexit. Even though the UK is not in the euro, Lon­don is the eu­ro­zone’s bank­ing cap­i­tal. When eu­ro­zone mem­bers want to raise fi­nance, they come to the City.”

Hal­li­gan, who is well known in the UK as a colum­nist for the Daily Tele­graph news­pa­per, and for be­ing the eco­nomics ed­i­tor of Chan­nel 4 News, one of the UK’s flag­ship TV news pro­grams, for nearly a decade, ad­mits he is at odds with other lead­ing eco­nomics com­men­ta­tors on Brexit.

He cer­tainly takes a view that is dif­fer­ent from the unashamedly pro-re­main Fi­nan­cial Times, where he was po­lit­i­cal cor­re­spon­dent in the 1990s.

“They think I am com­pletely in­sane. I think they’re ashamed that I was on the staff there, with hun­dreds and hun­dreds of by­lines. The pa­per, you know, is ab­so­lutely de­ter­mined that Brexit won’t hap­pen, what­ever they say pub­licly. Their re­port­ing of th­ese Brexit ne­go­ti­a­tions has done enor­mous dam­age to the UK’s in­ter­ests.”

The son of a work­ing-class Ir­ish im­mi­grant builder, Hal­li­gan does not have the nor­mal back­ground of many among the com­men­tar­ial elite.

He won a schol­ar­ship to John Lyon School, an in­de­pen­dent boys’ school in north­west Lon­don, which trans­formed his op­por­tu­ni­ties and where he is now a gov­er­nor.

“It was a huge cul­tural chasm for me to leap, but I was good at foot­ball and fast-talk­ing and, for the most part, the teach­ers were gen­er­ous and when I left I was head boy,” he says.

He went on to Warwick Univer­sity (near Coven­try in the West Mid­lands), where he took a first in eco­nomics, and then to Ox­ford, where he got a master of phi­los­o­phy de­gree be­fore em­bark­ing on his ca­reer, first as an eco­nomics re­searcher and then as a top-flight jour­nal­ist.

He be­lieves his work­ing-class back­ground gives him more of an in­sight into the way or­di­nary peo­ple think about the Brexit is­sue.

He cer­tainly has no time for the elite who look down on those who voted to leave as some­how in­tel­lec­tu­ally in­fe­rior.

“They are try­ing to tell me that their vote counts for more than a lorry driver from Scun­thorpe (English north Mid­lands town), and the peo­ple I grew up with — who I know are as shrewd as any­one I’ve met in West­min­ster — are thick, when they are not. Don’t equate ed­u­ca­tion and brains,” he says.

He says im­mi­gra­tion was clearly a fac­tor in the Brexit vote for many peo­ple in Britain, par­tic­u­larly those do­ing lower-paid jobs.

“I am the son of an im­mi­grant and have ar­gued that it (im­mi­gra­tion) is a good thing for the UK my en­tire adult life. When, how­ever, you move from net im­mi­gra­tion of 50,000 in 1997 to 350,000 in 2016, don’t tell me that the wages of lower-skilled work­ers haven’t been ham­mered.”

Hal­li­gan says one of the main ad­van­tages of Brexit will be for the UK to break free of Euro­pean reg­u­la­tion and hinge it­self to the faster­grow­ing emerg­ing economies, par­tic­u­larly China.

“You can’t ig­nore the mas­sive eco­nomic ex­pan­sion in China and the fact it has more (for­eign ex­change) re­serves than any other coun­try, or the fact that it is the world’s big­gest cred­i­tor. It is in­creas­ingly chal­leng­ing US hege­mony. What hap­pens will de­pend partly on the Chi­nese and how the big Western coun­tries re­spond,” he says.

“You can’t con­tain China. It is stupid, jin­go­is­tic and naive to think you can and, as some­body who has kicked around emerg­ing mar­kets, the most im­por­tant thing — and his­tory shows this — is to trade. Be­cause when coun­tries trade, that is when the chances of con­flict are at their min­i­mum.”

NICK J.B. MOORE / FOR CHINA DAILY

Liam Hal­li­gan be­lieves that leav­ing the Euro­pean Union will en­able the UK to build on the “golden era” re­la­tion­ship with China that was forged on Pres­i­dent Xi Jin­ping’s state visit to Britain in Oc­to­ber 2015.

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