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
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.”
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.