- 21 Jul 2016 1:00 AM
Nothing will change overnight as a result of this decision. We’re committed to ensuring the best possible outcome for the British people now that decision has been made. What happens in the long term very much depends on the negotiations, although we’re confident we’ll be able to reach an agreement protecting the rights of British citizens in Europe. Securing such an agreement will be a priority for the new PM in our EU negotiations.
Q2. What does Brexit mean for British business in Hungary, and Hungarian business in the UK?
Much of course will depend on the terms of the negotiations – what happens on the single market will clearly be a factor. I do not foresee that we are going to see much change in relation to British companies coming to Hungary. The reality is that the referendum vote notwithstanding, Hungary is an attractive market for British companies.
It is also an attractive location, with skilled and talented workforce, particularly young Hungarians with good language skills. Which is why you’ve got British companies here like Diageo and British Telecom who use this place as a shared services centre for either the region or the whole of Europe. So I don’t think that Brexit makes much difference to that.
Clearly in the terms of Hungarian companies coming to the UK, some people might be thinking what the future of economic relationship going to be. But I suppose the other reality is that Britain even when out of the EU is the second largest economy in Europe. And Britain will remain important for the EU, in the same way that the EU will remain important for Britain. Hopefully that’s something the people in charge of the negotiations will keep in the forefront of their mind. We are still a major player.
Q3. Any chance of a second referendum? Is it possible that the UK doesn’t leave the EU?
All I can say is that the British government has said it accepts the result of the referendum, and there is no suggestion from the government of a second referendum. The Foreign Office response to the EU-referendum e-petition states that the EU Referendum Act set out the terms under which the referendum would take place but did not set a threshold for the result or for minimum turnout. Parliament will debate the petition on 5 September 2016.
As Prime Minister Theresa May has made it clear several times “Brexit means Brexit and the United Kingdom is going to make a success of it”. This was a once in a generation decision, and the decision has been made. Obviously one can’t tell what may happen over the next couple of years, but it seems pretty clear that the British government has accepted the referendum vote and the Prime Minister [David Cameron] resigned. The negotiations will start and what happens thereafter depends upon the negotiations, but we will want the best possible deal for the UK.
Q4. Do you feel there was any failure by the Government to adequately prepare for a Leave outcome?
The Government made it very clear that the one thing that they had to prepare for – given their assessment that there would be economic and financial market volatility in the event of a vote to leave – was to prepare contingency plans. The former Chancellor and the Governor of the Bank of England have said that they had been planning for this and took steps to calm down the markets. Both of them made clear that financial market volatility in the aftermath of a leave vote was to be expected; what they are concerned about is the longer term economic consequences to the UK of leaving EU.
In terms of other contingency measures, as Government ministers have stated there was no ‘plan B’, because the government felt that there was a strong case to remain. If there had been contingency plans beyond the financial volatility aspect, and had those leaked it would have damaged the government’s credibility. So there was a feeling that there should be ‘no plan B’.
Q5. As you come from Scotland yourself, may we ask you if the Brexit vote means Scotland should have another chance to consider independence?
There was a referendum two years ago in Scotland and the majority of the Scottish people – in terms of the share of the vote of 55 / 45, a greater gap than the referendum we just had – voted to stay in the UK. It was made very clear at the time that we should see this not as a ‘neverendum’, it was once in a generation decision. By the terms of the Edinburgh Agreement both sides – the British Government and the Scottish Devolved Administration – agreed that they would abide by the outcome.
It has also been made clear by the Government that the economic rationale for [Scotland] leaving the European Union would now appear to be weaker given that when the campaign for independence kicked off, oil was at 100 US dollars a barrel. Oil is now south of 50 US dollars a barrel. The Scottish economy depends upon oil and gas, so I do not think you need to be a rocket scientist to work out that actually the sums now would be more difficult to add up.
We will ensure that the interests of all parts of our United Kingdom are protected and advanced, so as we prepare for a new negotiation with the European Union we will fully involve the Scottish, Welsh and Northern Ireland Governments. Theresa May’s first official visit as PM was to Scotland.
Q6. Naturally expats are looking for certainty about their home, business, pension in the EU – how do you see the future for expats in Hungary?
I’m not a business consultant for expats, and many people will be in many different situations. I can only just repeat again that there is going to be no immediate change. We’ve got two years to negotiate once Article 50 is invoked, and we do not know exactly when Article 50 will be invoked. The PM has said it will not be this year. So it’s still some time before we will see any changes. And of course we do not know what changes those will be - it will depend on the negotiation.
The British Government has already made it clear that the position of expats in the EU is an important factor for the Government as we go into the negotiations. Philip Hammond, [former Foreign Secretary, now Chancellor], has said that we cannot give guarantees on the position of EU citizens in the UK until we have got guarantees on the position of British citizens in the EU. We are all hoping for the best possible outcome for both given that EU workers in the UK have contributed to the UK’s economic growth and British workers and citizens contribute to the prosperity of the EU countries in which they live.
Bear in mind that there are 3 million EU workers in the UK and we have the second lowest unemployment rate in the EU. In some parts of the country we are getting close to what economists regard as full employment. So European workers are playing an important part in our economy, as they do to their countries back home in terms of remittances. And not just financially; in terms of adding skills, experience, qualifications, nous for those in the business that they then bring back to their own counties, whether it be Poland, Hungary, Germany or France. But also, British citizens make a contribution throughout Europe in the same way in terms of bringing their skills and talents or putting money into the local economy.
All over Europe people from different countries add value to other countries, and on the basis that we want as good as possible a relationship between Britain and the EU after we leave. The EU remains incredibly important for Britain, and Britain as the second largest economy in Europe and the fifth largest in the world, remains incredibly important for the EU. I think it is self-evident that it is in our mutual interests to end up with a relationship and a deal that is mutually beneficial.
Q7. Will British expats need a visa to stay in Hungary, and how does this change their permission to work here?
Again, there’s no immediate change, what happens after we conclude the negotiations will depend on those negotiations.
Q8. I heard we are short of negotiators, is that true?
In terms of negotiating trade agreements, that is not a specialty we have had to have for the last 43 years because we’ve been part of the single market, part of the EU, and so the EU negotiated on behalf of the member states. But, across government we have a wide network of staff with the right skills needed to negotiate at European and international level.
Which I think goes back to the point that Britain is still a major player globally. To some extent we may see this whole process forcing Britain to be even more global than it has been. Just to give you an example, when I was working in Hong Kong, dealing with our trade and investment operation, I was always gobsmacked to see that we sold twice as much to Belgium as we sold to China. We sold three times as much to Sweden as we sold to India. Now looking ahead, you would say that’s all very nice, but looking to the future of these rapidly growing economies we need to be selling more to these economies of the future.
I think there is no doubt that there has been an element that Europe has been a very easy backyard market for British exporters, and one of things that this will force British exporters to do is to start looking for global markets, which in the long term will inevitably be far more important and far bigger than Belgium, Sweden or Switzerland.
Some of our Hungarian friends have said to us that they envy the fact that we can actually escape from Brussels’ rule and create a new context for ourselves. But there is no doubt that all the economic analysis before the referendum was that it would come at least at a short term price, which in due course I believe is recoverable. This is not the end of the world, not the end of civilization as we know it - we have to make the best of it, we have to get the best possible deal we can with the European Union and then start to sort out our relationship with not just Europe but also the rest of the world, particularly on the trading side.
Q9. What about British passports with the words ‘European Union’ on the cover, how will expats be affected, do they need to get a new passport?
Again, there is no immediate change, and we have to wait and see the outcome of the negotiations to see what would happen in relation to travel within Europe, and travel outside Europe. Bear in mind that Britain is not part of Schengen, so actually our global visa agreements are made by the UK not by the EU. So our visa agreements are not dependent on being members of the EU, and many are on the basis of reciprocity. There are plenty of places where people have access to the UK but will not have access to the rest of EU. Maybe a few cases the other way round, but not so many.
Q10. Lastly about students, an important sub-group of expats, what does Brexit mean for UK students in Hungary, and Hungarian students in the UK?
Again, there is no immediate change, and we have seen some statements from UK colleges reassuring students going to the UK now that there is no change. We are still members of the EU. EU rules, regulations and laws still apply, until the day we leave. That is still at least two years away. At this stage it is hard to see anything being retrospective. That is not the way things usually work – usually new rules and regulations are brought in applying to new applicants or things happening after a date and not happening on a retrospective basis. But for the detail of that we will have to see.
Interview by Stephen Linfitt & photos by Russell Skidmore for XpatLoop.com