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Contents

Introduction - how we got here .............................................................................................................. 3

London – A World City ............................................................................................................................ 5

Events industry.................................................................................................................................... 5

London’s Financial Sector and International Trade & Investment ..................................................... 6

Innovation and Technology ................................................................................................................ 7

Biosciences and medical research ...................................................................................................... 7

The Timescale for Brexit .......................................................................................................................... 9

So, what is the next step? ................................................................................................................. 10

The Coming Years – A Snap shot ....................................................................................................... 11

Key Considerations ................................................................................................................................ 11

Entry and Exit – Moving Goods and People ...................................................................................... 11

The movement of goods for Exhibitions and Events ........................................................................ 12

Exchange Rates ................................................................................................................................. 13

The UK and London Economies ........................................................................................................ 15

Key Sectors: Financial Services and the Square Mile ........................................................................ 16

Key Sectors: Science, Research and Innovation ................................................................................ 18

Key Sectors: Technology ................................................................................................................... 19

Key Sectors: the UK events industry and visitor economy ............................................................... 20

Freedom of Movement vs Access to the Single Market ................................................................... 22

What are the options? How likely are they? .................................................................................... 23

Option 1: The Norway Model ........................................................................................................... 23

Option 2: The Switzerland Model ..................................................................................................... 23

Option 3: Going it alone (under WTO rules) ..................................................................................... 24

Option 4: The Canada Model ............................................................................................................ 24

Option 5: A UK Model? ..................................................................................................................... 24

What is the most likely outcome? .................................................................................................... 24

Speculation on countries (outside EU) that are interested in establishing trade deals with Brexit

Britain .................................................................................................................................................... 25

Brexit – the political context ................................................................................................................. 26

Europe – wider instability ..................................................................................................................... 26

Conclusion ............................................................................................................................................. 28

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Introduction - how we got here

For most of the past forty years, Brexit has been almost unthinkable. When the UK Independence

Party (UKIP) was set up in 1993 with the sole mission of bringing about a British exit from the EU, it

was considered a laughable fringe movement. Yet on the 23rd June 2016, Britain voted to leave the

EU by 52% to 48%, ushering in the most important constitutional shift in British politics so far this

century. The decision lead to a change of Prime Minister followed by an early general election in the

UK. It has also had repercussions across Europe and beyond.

So, how did we get here?

Britain’s attitude towards a united Europe has

rarely been straightforward, alternating between

indifference, enthusiasm and opposition. In the

immediate post war period, Britain was

supportive of plans to create a ‘United States of

Europe’, but viewed it as a continental matter, did

not plan to be a participant and was therefore not

one of the founding six nations that formed the

European Community in the 1950s. By the 1960s

things had changed – as its own international

influence waned, the UK became more

enthusiastic about membership of the European

Economic Community (as the embryonic EU was called) but other member states – most notably the

French – had cooled on the idea of the UK joining, and vetoed Britain’s application in 1963. By 1970

attitudes on the continent had shifted again and negotiations recommenced, leading to the signing of

accession treaties and, following a UK referendum (in which 67% of the public backed membership)

in 1975, Britain finally joined.

During the 1980s and 1990s the EEC gradually became the EU, seeking a larger membership and ever

closer integration of member states, including economic union and a single currency. Many in Britain

began to become uneasy at what they felt was the creation of a more federal entity, the loss of

national independence, and the impact of increasing amounts of European regulation on the British

economy - all stoked, in no small part, by the attitude of the British press. Whilst the UK remained a

member state, it did not join the single currency and a growing anti-European movement within the

UK began to gain ground, eventually spawning its own political parties (the Referendum Party and

then UKIP) and putting pressure on the traditional Westminster parties.

How we got to the point of holding a referendum on continued membership, is the simplest question

to answer. One of the consequences of the Conservative Party’s surprise win in the 2015 General

Election was that the newly returned majority Government would have to go through with its

manifesto commitment to give the people of the UK a referendum on our continued membership of

the European Union – making Brexit a possibility for the first time since 1975.

Cynics have suggested that the then Conservative leader, David Cameron, only made this pledge for

three reasons: to pacify his own backbench MPs (many of whom were staunchly Eurosceptic); to fend

off an electoral challenge from the rabidly Eurosceptic UKIP (who had been eroding the Conservative

vote in recent years); and because he expected to come out of the general election once again sharing

The Six Original Members of

the European Union:

France

Germany

Belgium

Italy

Luxembourg

The Netherlands

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power with the Liberal Democrats, a staunchly pro-European party that could be relied upon to stop

him holding the referendum. But, whether the manifesto pledge was based on conviction or short-

term calculation, once the Conservatives secured a majority there was no way that the referendum

could be un-promised.

Much has been written on the respective success and failure of the Leave and Remain campaigns with

views differing depending on source and editorial slant. Regardless of political leaning, there are a

number of widely accepted reasons that the British voter opted for Brexit. These can be summarised

as:

- a desire to distance ourselves from the perceived failed economics of the EU project, and end our

financial contribution to the EU bureaucracy

- a desire to bring back sovereignty to Parliament

- a feeling of discontent with the ‘establishment’ over immigration and unemployment, leading

many to see Brexit as a protest vote against the status quo

Immediately following the referendum, there were wide reports of Brexit ‘buyer’s remorse’ where

some regretted voting Leave and many claimed they had not fully appreciated the implications of their

vote. A petition to hold a second referendum gained over 4 million signatures. However, Theresa

May’s very first act as the new PM was to reassure the country that their voice had been heard, and

that ‘Brexit means Brexit’. Prominent Leave campaigners, such as David Davis, were appointed to key

Cabinet roles and are leading the Brexit negotiations.

After a brief period of Parliamentary ping pong, as the House of Commons and House of Lords batted

back and forth a very short piece of enabling legislation, Theresa May dispatched a senior diplomat to

hand over a formal letter to the President of the EU announcing the UK’s decision to invoke Article 50

of the Rome Treaty and extract itself from the EU. The formal period of negotiations began and the

final date for the UK’s separation from the EU was set as 29th March 2019.

There was of course one final twist in the tale. Following a period of reflection on an Easter walking

holiday in Wales, the Prime Minister decided that an early General Election was needed. She argued

that she needed a clear mandate from the British people for her negotiating stance and a strong

parliamentary majority for her chosen form of Brexit. Others have argued that she was seeking to take

political advantage of a weak opposition that was polling particularly badly, but one way or another a

General Election date was set for the 9th June 2017, three years earlier than had been promised and

widely expected.

At the time of writing the election result is not settled but very few commentators expect anything

other than a clear Conservative majority in the next Parliament and as a result steady progress towards

Mrs May’s preferred form of Brexit.

Here we investigate what the different options for Brexit might look like, and what impact they are

likely to have on the London economy and the events sector.

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London – A World City

Since 2012, London has consistently retained its place as the world’s best city for business, innovation

and culture, ranking ahead of New York, Tokyo and

Singapore in the Global Power City Index.

Post Brexit, all indicators point to a bright future for the

London economy. London always has and always will be a

great place to live, work and do business. Even outside of

the EU, London’s advantages as a world city - its time

zone, access to cutting edge technology and innovation, a

competitive business environment, transport

connectivity, its economic dynamism, its strength in

financial services, the availability of a highly skilled

workforce, and its innate entrepreneurial spirit – will

ensure that the capital will not just survive but thrive in

the global economy.

This is due in no small part to a large number of sectors where London is a world leader, and which

are well placed to remain resilient to any Brexit shocks.

Events industry

The UK has a considerable events sector,

which is the nation’s 16th biggest industry and

contributes £42.3bn to GDP while directly

employing more than 530,000 people.

London especially has a thriving and vibrant

events industry and visitor economy.

In 2016 London increased the number of

overseas visitors and amount spent, (19.88

million people spending $19.8 billion

compared to 18.8 million people spending $13.2 billion in 2015). London was second only to

Bangkok in Mastercard’s Global Destination Cities Index.1

London’s attractiveness to visitors is based on a wide and varied offering, from London’s West End

which is the top retail destination in Europe, to a thriving arts, culture, music and theatre scene, to

some of the best restaurants in the world and unparalleled historic attractions and museums.

1 https://newsroom.mastercard.com/wp-content/uploads/2016/09/FINAL-Global-Destination-Cities-

Index-Report.pdf

London increased the number of

overseas visitors in 2016, attracting

19.88 million people spending a total

of $19.8 billion.

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This broad offering has also contributed to London becoming one of the world’s top destinations for

conferences and events. In 2015, London was ranked joint fifth with Madrid in the ICCA [International

Congress and Convention Association] rankings of the best cities in the world to hold international

meetings and conferences. This represents a rapid rise for London - ranked 19th in the 2008 ICCA

rankings - and reflects London’s position as a global city that is increasingly relevant on the world

stage.

ExCeL London itself has played an important role in the city’s rapid climb, with the addition of the

International Convention Centre (ICC) giving limitless scope to the types of events that can be held in

London. ExCeL alone contributes £4.2bn to the UK economy, and supports 33,157 jobs across the

capital. Historic moments such as the Olympics 2012, which ExCeL London co-hosted, also showcased

London’s ability to put on world leading events and cater to visitors’ every need.

London’s position as a global leader in many industries already makes the Capital a tier 1 destination

for international events. In particular, the thriving financial, innovation and technology and the

biosciences and medical sectors, will continue to attract world leading events to London, including the

likes of Sibos, The ESC (European Society of Cardiology) Congress and HPE Discover London.

London’s Financial Sector and International Trade & Investment

London’s economic importance cannot be underestimated, and this can be directly linked to the

thriving financial sector which is the lifeblood that underpins a large proportion of London’s economic

activity. With the growth in globalisation, in international trade and in emerging markets such as the

BRICS economies, the global financial system is no longer fixed transatlantically. The timezone of a

financial centre is important to have substantive global reach. Unlike New York, London's working

hours overlap with those of centres all around the world, emerging and developed, from Chicago to

Singapore to Shanghai and Tokyo. Even in this day of electronic and algorithmic trading, ongoing

human input and communication is still necessary for the finance industry to function.

Coupled with English trust laws, strong

libel laws, a strong historical

commercial culture and an ability to

attract the world’s top talent – London

has become the natural home for

financial institutions not just in Europe,

but in the world. 251 foreign banks are

located in London, 20% of the world’s

foreign equity market is listed in

London, and 41% of global foreign

exchange turnover takes place in

London, worth $2.7trn per day. In

addition, the UK has the largest

insurance industry in Europe, worth $330bn.

In February 2017 Wall Street giant Bank of America Merrill Lynch announced that it was embarking on

a search for a vast new London office, in what has been seen as a major vote of confidence in the

capital as the UK prepares for Brexit. The bank has asked property agents to track down sites in London

as big as 500,000 square feet – roughly the same size as its current premises, which serve as the bank’s

European headquarters. Other institutions have opened continental offices, such as Lloyd’s of London

• 251 foreign banks are located in London

• 20% of the world’s foreign equity market is

listed in London

• 41% of global foreign exchange turnover

takes place in London, worth $2.7trn per day

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opening a new Berlin branch to deal with Eurozone transactions, but are retaining their UK

headquarters.

As well as this attractiveness to financial institutions, there is a parallel effect on international trade

and investment. In 2015 London brought in more foreign investment and created more jobs than any

other city in the world according to the Institute for Business Value’s annual Global Location Trends.

For the eighth year in a row, London also topped the rankings by attracting over 175 foreign

investment projects from companies relocating and expanding overseas. London has more

international headquarters than any other European city.

Innovation and Technology

London also leads on innovation and

technology, with the Silicon

Roundabout second only to California’s

Silicon Valley for investment in tech

start-ups. Nearly one-third of all

European venture capital funding

consistently comes to the UK, and we

now have the second highest levels of venture capital invested per capita in the world, after the US.

As a result, the UK digital economy is growing 32% faster than the wider economy and is creating jobs

2.8 times faster. Of Europe’s tech “unicorns” – young companies valued at over a billion dollars –

almost 40% are based in Britain. They include the London-based FarFetch and Blippar, the Hut Group

in the North West, and Edinburgh-based FanDuel and Skyscanner.

The location of these companies and growth in jobs also attracts the world’s top talent and best minds

in tech.

Biosciences and medical research

The UK has a thriving pharmaceutical and biosciences sector. London is at the heart of the so called

‘Golden Triangle’ of medical and life sciences research, which links the capital’s leading research

institutions such as the Francis Crick Institute and University College Hospital, with Oxford and

Cambridge. London’s City Hall has also recently invested in creating ‘MedCity’, a biotech cluster for

London that brings together corporate funding, third sector involvement such as Cancer Research UK

and academic research to spearhead the next generation of drug development.

This thriving sector is worth £50bn to the UK

economy annually, and employs 170,000

people. According to the New York Times,

approximately 20% of the world’s best-

selling drugs are manufactured in the UK.

As well as its contributions to the economy,

this thriving biosciences sector helps make

the UK one of the world’s leading medical

hubs, with some of Europe’s and the world’s

foremost experts practicing both privately

and in the expansive NHS system.

UK digital economy is growing

32% faster than the wider economy

and is creating jobs 2.8 times faster

Biosciences and medical research is

worth £50bn to the UK economy

annually, and employs 170,000 people.

20% of the world’s best-selling drugs

are manufactured in the UK.

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While it is now certain that the regulatory body, the European Medicines Agency, will be relocated

from London, this does not seem to have halted investment in the medical research sector by private

companies. There have already been several significant new investment announcements in 2017.

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The Timescale for Brexit

While the British public has voted in favour of leaving the European Union, it is important to remember

that Britain has not left yet. For the time being it is very much business as usual and until the final

terms of departure are agreed, the existing rules and regulations that govern trade with other

members of the EU remain in force.

What we do now have is a clear time table for the separation. The UK government initiated “Brexit”

by invoking the agreement called Article 50 of the Lisbon Treaty. This was done by the delivery of a

letter on the 29th March 2017 from the British Prime Minister Theresa May to the EU Council President

Donald Tusk. Theresa May was keen to stress that 'We are leaving the EU, but we are not leaving

Europe.' She made it clear that the UK would seek to negotiate the terms of a new, positive trading

relationship alongside the negotiations for leaving formal institutions of the EU.

Now that Article 50 has been invoked, the EU and the UK have two years in which to negotiate a withdrawal agreement and the UK’s future relationship with the EU. In addition to the UK, there are a further 27 EU member states, and any agreement being accepted by the EU requires the assent of a “qualified majority,” which means that 72% of the member states, must vote in favour of the agreement.2

If an agreement is reached, the treaties that currently govern the relationship between the EU and the UK (as a member state) will expire. If no agreement is reached, the treaties will automatically expire two years from when Article 50 was invoked unless every one of the remaining EU states agrees to extend the negotiations, although this seems politically unlikely, on both sides of the negotiations.

The timetable is as follows

29th March 2017 Article 50 was triggered

30th March 2017 The Great Repeal Bill White Paper was published.

7th May 2017 Second Round of the French Presidential Election.

8th June 2017 UK General Election

Early June 2017 Start of formal face to face talks

24th Sep 2017 German Federal Elections

Late December 2017 EU Chief Negotiator Michel Barnier expects initial discussions to conclude

2 https://hbr.org/2016/08/a-definitive-guide-to-the-brexit-negotiations

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Early 2018 Great Repeal Bill likely to receive Royal Assent

September 2018 Target date of EU negotiator to wrap up Brexit terms

Late 2018 – Early 2019 Both UK Houses of Parliament and the Council and Parliament of the EU will have a vote on any deal

March 2019 Two year negotiating window closes and the UK will leave the EU with or without an agreement

The Great Repeal Bill

This somewhat overenthusiastically named piece of legislation will set out to automatically transfer

EU legislation into UK law so that there are no unseemly problems caused by the UK withdrawal. The

bill will then allow the UK to repeal, amend or alter legislation as it wishes over the coming years after

the UK’s departure in 2019. It has been the subject of some controversy as it is expected to use so-

called “Henry VIII powers” which will allow Ministers to make certain legislative changes without

consulting the UK Parliament. In reality however, most of the EU legislation is expected to survive

unscathed as most UK businesses are used to operating under it and are not calling desperately for

any urgent changes. Indeed the legislation will probably need to remain intact as part of the conditions

for any future trade agreement between the EU and the UK. The Great Repeal Bill, when it is published

after the General Election, will be given a different official title as parliamentary officials are not keen

on value-laden terms such as ‘great.’

So, what is the next step?

The UK General Election is not expected to have significantly delayed the process of negotiating the

UK’s exit. French and German elections were expected to mean that the negotiations would not start

in earnest until October 2017. With the elections completed, the main players will have a clearer view

of the key issues and bargaining positions and an agreement will inevitably emerge, after all the usual

theatricals familiar to those who follow international summits.

The UK general election and those in Germany and France will provide ample opportunities to

rehearse the arguments about how Brexit should be implemented. More detail will emerge about

Theresa May’s negotiating position and the nuances of the new relationship will gradually become

clearer.

Meanwhile businesses in the UK and Europe are carrying on as normal, planning for the new

challenges and opportunities that will emerge.

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• The EU Council of Ministers will issue directives to the Commission to steer the exit negotiations. Each will be subject to increased Eurosceptic pressures in their home nations

• Negotiations will cover issues including: residual EU payments between Britain and the EU; the acquired rights of UK citizens living and working in Europe and EU citizens in the UK; pensions of British EU civil servants, and the future home of EU agencies currently based in the UK

• If no trade deal is agreed, the UK will move to a standard WTO relationship, with the risk of new tariff and non-tariff barriers to exports

Key Considerations Entry and Exit – Moving Goods and People

Until the two-year negotiation period is over, free movement will continue as normal. The European

Health Insurance cards also remain valid. The UK Visas and Immigration have stated that when the UK

does leave the EU “we fully expect that the legal status of EU nationals living in the UK, and that of UK

nationals in EU member states, will be properly protected.”3 Free movement of people from the EU

3 https://www.gov.uk/government/news/statement-the-status-of-eu-nationals-in-the-uk

Carolyn Fairbairn, CBI Director-General, recently said:

“Many businesses are still working through exactly what a vote to leave may

mean for them, but in the meantime are getting on with providing stability and

jobs in their communities. To support this goal, businesses want the government to

focus on domestic priorities, including a swift decision on new airport capacity,

while setting a clear plan and timetable for the negotiations.”

Article 50 says:

“Any member state may decide to withdraw from the union

in accordance with its own constitutional requirements.”

It specifies that a leaver should notify the European council of its intention, negotiate a deal on its

withdrawal and establish legal grounds for a future relationship with the EU. On the European side,

the agreement needs a qualified majority of member states and consent of the European

parliament.

The only real quantifiable detail in the article is a provision that gives negotiators two years from

the date of article 50 notification to conclude new arrangements. Failure to do so results in the

exiting state falling out of the EU with no new provisions in place, unless every one of the remaining

EU states agrees to extend the negotiations.

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to the UK could be extended after Brexit, Theresa May has suggested that there would be an

"implementation" phase once an exit deal had been struck, with business and governments needing

a "period of time" to adjust to any new restrictions. She said: "Once we've got the deal, once we've

agreed what the new relationship will be for the future, it will be necessary for there to be a period of

time when businesses and governments are adjusting systems and so forth, depending on the nature

of the deal - but a period of time when that deal will be implemented."

The movement of goods for Exhibitions and Events

At present goods for exhibitions coming into London from the EU is subject to minimal controls and

documentation as part of the benefits of the Single Market. Goods for exhibitions coming in from

outside the EU, but from countries who are part of the ATA Carnet chain, which facilitates their entry

into the UK, benefit significantly. There are 75 countries in the Carnet chain, including the 28 member

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states of the EU, USA, Japan and a majority of major UK trade partners. Goods for exhibitions coming

into London from non-EU and non-Carnet chain countries are subject to temporary import

procedures, duty and VAT deposits. If these are not followed then suspensions are likely to be

implemented.

The London Chamber of Commerce and Industry believes it is possible that, whatever arrangements

are made as part of the Brexit negotiations, it may include similarly minimal controls as now for

temporary imports. However, if this is not the case the UK will still be a Carnet convention signatory

(possibly having had to re-sign) and so those looking to temporarily import goods for exhibitions will

benefit from the Carnet as they currently do and the same will apply for the remaining 27 member

states of the EU. Under these circumstances, those who are currently outside of the EU and not a

signatory of the Carnet will still be subject to temporary import procedures, as they are at present.

Exchange Rates

There is no doubt that the referendum result sent UK financial markets into a tail spin. In the two days

following the referendum, the pound suffered an eight per cent fall against the dollar in a single day

and then fell a further 3.5 per cent fall the next day. However, although exchange rates have remained

The ATA Carnet

Jointly administered by the World Customs Organization (WCO) and the International Chamber of

Commerce through its World Chambers Federation, the ATA Carnet is an international customs

document that permits the tax-free and duty-free temporary export and import of goods for up to

one year. The Carnet eliminates the need to purchase temporary import bonds. So long as the

goods are re-exported within the allotted time frame, no duties or taxes are due. Failure to re-

export all or some of the goods listed on the Carnet results in the payment of applicable duties and

taxes. Failure to remit those duties results in a claim from the foreign customs service to the

importer's home country.

ATA Carnet Brexit Overview

Current Situation: as a member of the Carnet chain and the EU, goods for exhibitions coming

into the UK from Carnet chain countries are not subject to import procedures, duty and VAT

deposits. Transfer is quick, easy and unobstructed by red tape.

Post Brexit Situation: the UK will 100% seek to remain a member of the Carnet chain. Following

exit from the EU, goods for exhibitions coming into the UK from EU and other Carnet chain

countries will still not be subject to import procedures, duty and VAT deposits.

Exhibitors from EU and Carnet chain countries will continue to experience quick and easy

transfers of their goods for exhibitions, unobstructed by red tape.

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at a comparative low over the summer, they have largely avoided repeating the massive single day

falls that were seen immediately after the referendum result. According to Simon French, Chief

Economist at Panmure Gordon, a falling off in volatility (as implied by future markets) "suggests

sterling is no longer the heavily geared trade it was in the run up to and immediately following the

referendum." Societe Generale's Kit Juckes echoed this view, but warned against complacency, saying:

“while measures of volatility have "quietened down" to their lowest levels in recent months, they are

still up on last year's average, implying heightened uncertainty among traders.”4

Overall, many experts believe that exchange rates will react to further news or developments

regarding Brexit but should be less volatile overall. As Nina Skero, a senior economist at the Centre for

Economics and Business Research (CEBR), has said: "The overall tendency for currency markets to

overreact and then adjust has been the case for much longer than the referendum… We can still

expect some volatility. If there's an event, currentcy markets will tend to react very quickly. However,

we aren't expecting any major announcements [in terms of the Brexit negotiations] so there probably

won't be quite as many news stories or events for currency markets to react to,"5

It is important to note that the referendum result is not the only thing that has driven down exchange

rates – the Bank of England’s announcement of further monetary stimulus at the start of August also

had a drastic impact.

Deutsche Bank, said Theresa May’s decision to call a general election was a "game-changer" for the

currency, and that it would raise its forecasts for the pound. Analysts at the bank said May's move

should result in a larger and more stable majority in parliament and reduce the likelihood of a so-

called "hard Brexit."6

Whilst a low exchange rate is bad news for British

importers and holidaymakers, they are good

news for exporters and overseas tourists visiting

the UK. According to Gordon Clark, managing

director for the UK and Ireland at Global Blue

(one of the world’s largest tax-free shopping

networks): "Though the weaker pound following

the referendum was initially unwelcome news, it

has proved perfect timing for tourists visiting the

UK; enjoying British leisure, luxury and cultural

offerings during the summer season. The cash

injection we have seen off the back of this has

been hugely beneficial for our tourism

economy”.7

Research by Global Blue found that travellers from the US increased their shopping by 22 per cent and

accounted for seven per cent of July’s total tourist spend, shelling out an average of £734 per person.

4 Cited in “Have we seen the end of volatility in the currency markets?” in CityAM, 27 July 2016 - http://www.cityam.com/246335/have-we-seen-end-volatility-currency-markets 5 Ibid. 6 http://www.nasdaq.com/article/sterling-soars-to-highest-since-december-after-pm-calls-early-election-20170418-00758#ixzz4fRxuln2B 7 Cited in “The weaker pound sent Chinese and US tourists on a spending spree in the UK last month” in CityAM, 22 August 2016 - http://www.cityam.com/247953/weaker-pound-sent-chinese-and-us-tourists-

spending-spree-uk

"Though the weaker pound following the

referendum was initially unwelcome news, it

has proved perfect timing for tourists visiting

the UK; enjoying British leisure, luxury and

cultural offerings during the summer season.

The cash injection we have seen off the back of

this has been hugely beneficial for our tourism

economy”

Gordon Clark,

managing director for the

UK and Ireland at Global Blue

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US travellers were outspent only by Chinese travellers, whose visitors account for 32 per cent of the

total yield. Chinese tourists’ average spend rose by six per cent, to £840 per person.

Additional research – by Hotels.com – found that more than four in 10 Americans have said they are

more likely to visit the UK for a holiday as the dip in sterling continues to favour the dollar.8

Further proof was also provided by travel researcher ForwardKeys , who found a Brexit bounce in air

bookings to the UK. Bookings were boosted by 4.3 per cent in the 28-day period following the

referendum compared to the year before. ForwardKeys attributed this surge to favourable exchange

rate movements for the euro, with bookings from Europeans up five per cent after the vote, which

the company said was "very likely due to the sterling depreciation against the euro"9. Nor is this boom

limited to the summer. Bookings for travel to London rose from October 2016, following the exchange

rate reaction to “hard Brexit” concerns. Visitor arrivals also increased from November 2016 and the

trend looks set to continue. The fastest growing market according to ForwardKeys over this period has

been North America.10

The UK and London Economies

Despite the doom-laden predictions of many of those who campaigned for Remain during the

referendum, the UK economy has not collapsed in the wake of the vote for Leave. There was

turbulence on the financial markets in the days that followed the referendum, but the FTSE duly rallied

and a succession of economic indicators – covering a range of sectors and industries – have duly shown

the economy outperforming expectations.

The Confederation of British Industry’s (CBI) monthly Industrial Trends Survey – a key barometer for

manufacturing performance – showed that export order books have risen to the highest level in over

three years, while expectations for growth are at their highest level for twenty years11. The latest

employment figures, showed the number of people in work climbed to its highest on record (at 31.8m)

in the first quarter of 2017 - an employment rate of 74.6% per cent.12

Other measures of economic performance also indicated that the UK economy is defying expectations:

Retail sales grew at their fastest pace since September 2015 in the year to April 201713; inflation (as

measured by the Consumer Price Index) was stable in April 2017 at 2.4% slightly above the Bank of

England’s target of 2%14; Government borrowing is at its lowest level since the 2008 banking crisis

8 Ibid. 9 From “Brexit boost to UK-bound air bookings as pound plummets” in CityAM, 8 August 2016 - http://www.cityam.com/247071/brexit-boost-uk-tourism-pound-plummets 10 From ForwardKeys Webinar: Forward London https://forwardkeys.com/revenue-

management/article/forwardlondon.html 11 CBI Press Team News 21 March 2017 Export order books improve markedly http://www.cbi.org.uk/news/export-order-books-improve-markedly/ 12 Recruiter – Employers Need to Get Creative as Employment Rate Rises http://www.recruiter.co.uk/news/2017/04/employers-need-get-creative-employment-rate-rises 13 Cited in “Retail sales growth quickens…” City AM 27th April 2017

http://www.cityam.com/263701/retail-sales-growth-quickens-but-stores-and-analysts-remain 14 Cited in UK inflation rate remains at 2.3% BBC Online 11th April 2017

http://www.bbc.co.uk/news/business-39564885

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having fallen by £20bn to £52bn in the 2016-17 financial year15; and credit ratings agency Moody’s

predicted that the UK would slow down modestly, but would not enter a recession. 16

Key Sectors: Financial Services and the Square Mile

The financial services industry is the backbone of the UK economy and the biggest driver of growth

for London. The industry was also one of the biggest and most vocal supporters of a Remain vote.

There has therefore been considerable speculation about whether or not many of the larger banks

will remain headquartered in the UK.

The British Bankers’ Association (BBA) – which represents the UK banking sector - has said it has not

abandoned hope of the UK having full access to the EU market, but admitted a bespoke deal similar

to Switzerland’s will be necessary. Plans are currently being drawn up by representatives from the

financial services sector which set out proposals for the UK’s access to the European financial market.

The BBA said a bespoke deal was important, and compared trade agreements which are currently in

place with Switzerland.

A spokesman from the association told the UK press that the BBA had not strayed from its campaign

for the UK to have single-market access, adding this factor was “extremely important” when

negotiating with the EU. A task force of City grandees, chaired by Shriti Vadera, the chairman of

Santander UK and a former Labour minister, is close to embracing this judgment. The group has

already been provided one blueprint, a 110-page document prepared by the British Bankers'

Association, advised by Clifford Chance and Global Counsel (the advisory firm founded by Lord

Mandelson, the Labour peer and former EU Commissioner).

Anthony Browne, the Chief Executive of the BBA, said: “There needs to be a bilateral deal providing

as full two-way market access as possible. Both sides have an interest in making this work, as it is not

in the interests of the other EU countries to be cut off from their main financial centre, especially at

a time they are all seeking to boost economic growth.”

Martin Wolf, chief economics commentator at the Financial Times, has concluded: “London will

remain an important financial centre under any plausible circumstances. It survived the 1930s and two

world wars. It will survive Brexit. Yet, within the EU, it was emerging as the undisputed financial capital

of Europe, as well as one of the world’s two most important financial centres. After Brexit, it is likely

to become an offshore centre, relatively more vulnerable to policy decisions, especially regulatory

decisions, made elsewhere, particularly by the eurozone.”17

15 Cited in UK government borrowing at lowest level since 2008 financial crisis The Guardian 25th April 2017 https://www.theguardian.com/business/2017/apr/25/uk-government-borrowing-lowest-level-

financial-crisis 16 Cited in “Brexit boom: The five charts which show Britain has escaped an economic apocalypse” in Daily Telegraph, 19 August - http://www.telegraph.co.uk/business/2016/08/19/what-brexit-apocalypse-no-

sign-of-economic-woe-after-the-referen/ 17 http://www.ft.com/cms/s/0/63e937b0-44fd-11e6-9b66-0712b3873ae1.html#axzz4I9Rs9SsB

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It is too early to quantify the long term effects of the EU referendum, but Ernst and Young’s Financial

Services Brexit Tracker indicates that the immediate impact of the referendum result has not been as

stark as many initially feared.18 40% of the largest insurance companies operating in the UK publicly

said that the Brexit vote will not have a material impact on their business, with over 10% identifying

potential positives and opportunities for the companies. Only 16% have voiced concerns over the

potential negative impact on their business performance. Only a fifth (21%) of the major investment

banks tracked by EY voiced concerns over the future or highlighted a negative influence from Brexit

on their financial performance in recent earnings statements. Indeed, 15% of investment banks

consider the impact to be neutral or did not anticipate dramatic repercussions for the company,

adopting a ‘business as usual’ approach.

18 http://www.ey.com/UK/en/Newsroom/News-releases/16-08-22---Public-statements-allay-concerns-about-immediate-impact-of-Brexit-on-Financial-Services--but-negotiation-priorities-vary-across-sectors

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Barclays chief executive Jes Staley, said the strength of the City came from the "intellectual capital" of

its workers. For that reason, Google's decision to expand its presence in London was potentially "the

most important economic announcement post-Brexit." Speaking at a Brexit event in London he added

that banks would benefit from the calibre of workers that Google attracts after it made London its

second most important development hub outside of San Francisco19.

While the financial services world is investing heavily in lobbying the government to prioritise their

sector in Brexit negotiations, it is not yet clear whether this lobbying has had the desired effect. Unlike

many in the Cameron and Osborne clique, Theresa May and her allies have never shown much

enthusiasm for the City. But the sheer size of the sector will likely mean that it is prioritised in

negotiations, no matter the personal views of the politicians involved.

Key Sectors: Science, Research and Innovation

The UK’s science sector can be

viewed through the two basic

factors that drive all scientific

endeavour: funding and skilled

workers. On the former, the

government will have to dig deep

to replicate EU funding, and has

already made commitments in this

area. On the latter, a new post-EU

immigration system could boost scientific expertise in the UK.

Big pharma’s share prices have held their value, although ostensibly British firms such as AstraZeneca

and GlaxoSmithKline are in fact global enterprises with the majority of their drug sales in the US.

Pharma shares are defensive investments that tend to hold their value in times of turmoil, and are

recession-proof (diseases do not stop during a downturn).

UK science is disproportionately reliant on EU funding – The Economist reports that 10 percent of

university research is EU funded, and that while UK government science grants have dropped 6

percent in the last three years, EU funding has gone up by 60 percent.

The government is aware that it will need to replace some of this EU funding. Already, the Chancellor

of the Exchequer has announced that the Treasury will cover funding under the EC’s Horizon 2020

innovation funds, even if the UK leaves the EU before the current round expires in four years’ time.

Phillip Hammond said that:

“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive. Structural and investment funds projects signed before the Autumn Statement [2015] and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave.”

This was echoed by Business and Energy Secretary, Greg Clark, who said that underwriting the Horizon 2020 grants showed “the extent of our commitment, standing squarely behind our researchers and

19 http://www.bbc.co.uk/news/business-39716732

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scientists as they continue working with their European partners to develop new technologies, discover life-saving medicines and pioneer every day innovations”.

The Budget in March 2017 saw more positive news for UK science as the Chancellor announced £300 million to support the brightest and the best research talent, including support for 1000 new PhD places and fellowships, focused on STEM subjects. He also allocated £270 million to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles.20

In terms of private sector investment, the falling value of Sterling will help keep the UK attractive, but

only to a point. Science investors consider many factors other than cost. The underlying reasons that

science has been attracted to the UK in the past, including its transparent legal system and excellent

universities, have not changed.

Skilled scientists, laboratory technicians and business managers are key to a thriving research hub.

The sector has complained that talented Indian, Chinese and US scientists are being denied visas by a

system that restricts non-EU immigration. The industry now has an opportunity to benefit from a new

visa regime that entices global talent to the UK. There is also the chance to move past EU regulations

that have held science back, such as the 2001 European Commission directive on clinical trials, which

has been blamed for pushing up costs and delaying research, leading to a 25 percent drop in clinical

trials, and research moving to Asia and the US.

Ultimately, the UK’s position as a science hub will depend on continued investment and maintaining

a cluster of world-class scientific minds, whether British or international, who choose to live and work

in the UK. So far the investments have continued. In January 2017, Danish pharmaceutical giant Novo

Nordisk announced £115m worth of science infrastructure investment in Oxfordshire.

London is on track to remain a global biosciences hub, with investment continuing into world leading

research facilities, such as the state of the art Francis Crick Institute that brings together some of the

world’s leading research organisations including: the Medical Research Council, Cancer research UK,

Wellcome Trust, UCL, Imperial College London and King’s College London. Regardless of the kind of

Brexit we pursue, institutions such as these will continue to play a big part in ensuring that the UK

remains an attractive place for science. The European Medicines Agency is now confirmed to be

leaving London for a new headquarters (Paris, Amsterdam and Milan are competing to host the

regulatory body) but this does not seem to have dented private sector investment in London’s science

base.

Key Sectors: Technology

Investment in UK tech start-ups:

Data collected this by the investment database Pitchbook for London & Partners, the promotional

body for the London Mayor’s office, shows UK tech companies have attracted $200m of funding

across 42 deals since the EU referendum.21

Since the turn of the year, venture capitalists have invested £395 million in firms based in the

capital, up from £245 million in the preceding three months. In the months following the

20 https://www.gov.uk/government/speeches/spring-budget-2017-philip-hammonds-speech 21 http://www.ft.com/cms/s/0/e538e27a-5001-11e6-8172-e39ecd3b86fc.html#axzz4I9Rs9SsB

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referendum to leave the European Union, London tech firms have received more than £1 billion in

funding, over 70 per cent of the total £1.59 billion invested into UK tech during that period.22

This is further proof that London leads the way when it comes to technology and, because of its diversity and entrepreneurial spirit, continues to attract investment from across the globe,” said London mayor Sadiq Khan. “Investment in the capital shows that London is open for business, open for new ideas and will continue to welcome the best talent from around the world.”

Key Sectors: the UK events industry

and visitor economy

The capital’s visitor economy has

continued to boom since the EU

referendum. Hotels, airlines and

attractions all reported a dramatic

spike for London bookings in July, with

British “staycation” visitors put off

travelling abroad by the increased cost

of holidays on the Continent also

contributing to the surge. Tourism Alliance chairman Bernard Donoghue said initial research by his

organisation suggested there are 18 per cent more foreign visitors and 11 per cent more British

22 http://www.wired.co.uk/article/investment-tech-london

Room-rental company Airbnb reported a

24% increase in London visits since the

Brexit referendum. These visitors are

coming from more than 164 countries,

and have made London the third-most-

popular city in the world for Airbnb guests.

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tourists this July compared with the same month last year. According to an article in the Evening

Standard, Europe’s biggest flight booking website Opodo said travel from the Continent to London

was up by 42 per cent in the four weeks after the referendum, with the biggest increases seen in

travellers from Denmark, Latvia, Estonia and Norway23. According to the Business Insider, room-rental

company Airbnb reported a 24% increase in London visits since the Brexit referendum. These visitors

are coming from more than 164 countries, and have made London the third-most-popular city in the

world for Airbnb guests.24

London’s retail offering is a further draw for both foreign and domestic visitors. The 2016 Global Retail

Destination Index revealed that London’s West End is ranked as the top retail destination in Europe.

According to Mastercard – who compile the index - London attracted 18.8 million overseas visitors

spending a total of £13.2 billion (US$20.2 billion). This influx of international tourists alone has raised

London’s, and the West End’s, attractiveness to retailers as a place to trade. Nor is there any sign that

Brexit will undermine London’s lead. According to the New West End Company, sales hit £400 million

in the capital’s shopping heartland in July, 4.9% higher than the previous year. The post-Brexit bounce

was put down to opportunistic tourists cashing in on the pound’s slump in value since June’s European

Union referendum. Spending by Chinese tourists was up 21% year-on-year, with the average spend at

£1410 per visitor25.

Discussing the referendum’s impact on her sector, British Hospitality Association CEO Ufi Ibrahim said:

“The UK hospitality and tourism business remains open to welcome visitors from home and

abroad. Most people will have already made their holiday plans before the Brexit vote but in the mid-

term the fall in value of the pound should encourage more foreign tourists, and those already here

may spend more”. 26

23 http://www.standard.co.uk/news/uk/londons-tourism-bonanza-after-brexit-vote-a3307491.html 24 http://uk.businessinsider.com/airbnb-reports-24-increase-in-london-visits-after-brexit-2016-8 25 http://www.standard.co.uk/business/west-end-retailers-wary-despite-influx-of-tourist-cash-since-brexit-vote-a3326406.html] 26 http://www.bha.org.uk/bha_news/bha-ceo-ufi-ibrahim-talks-industry-impact-post-brexit-vote/

Minister says Brexit could lead to abolition of VAT on tourism – obviously he has left post now but: John Whittingdale, Secretary of State for Culture, Media and Sport, speaking at a British Hospitality Association (BHA) summit in London said: “If we wanted, for example, to abolish VAT on accommodation or attractions, we could now do so. We couldn’t have done when we were in the European Union”.1

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In a vote of confidence in the UK’s tourism industry, Heathrow’s overseas backers have pledged

£650m in investments for major projects at the London airport, which deals with more than 75m

passengers every year. The cash will be spent on a variety of projects but are thought likely to

include the expansion of Terminal 2 and a new southern access tunnel for road traffic to the airport.

Freedom of Movement vs Access to the Single Market

Determined that ‘Brexit means Brexit’, Prime Minister May has encouraged her cabinet to ‘seize the

opportunity’ presented by the decision to leave the EU to confirm Britain’s place as ‘one of the great

trading nations of the world.’

Although the Prime Minister has been reluctant to show her hand ahead of the formal talks with the

EU Theresa May’s negotiating position has become very clear over recent months. The UK will leave

the single market. This is the price that had to be paid in order for the UK to regain full control over its

borders, the key issue in the referendum campaign. Although, throughout the referendum, many of

those campaigning in favour of Brexit argued that it would not mean leaving the single market, it has

very quickly become clear that would not be possible without agreeing to the freedom of movement

for EU citizens. Access to the single market and the free movement of people has gone hand-in-hand

since the inception of the EU.

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This clarity from Theresa May would

appear to have brought to a resolution

the apparent differences of opinion

within the UK cabinet. It removes what

would have been an impossible

negotiation hurdle and will allow the

diplomats and civil servants more time to

focus on an alternative trading

arrangement.

The UK Government’s credibility rests

squarely on the economy’s strength and

it is politically invested in maintaining its

position as one of the great trading

nations, and London’s place as the global

capital of commerce.

What are the options? How likely are they?

Option 1: The Norway Model

- Joining the European Economic Area (EEA) - Would minimise the trade costs of Brexit - But would mean paying 83% as much into the EU budget as the UK

currently does - Members of the EEA:

o Must implement EU rules concerning the single market including legislation regarding employment, consumer protection, environmental and competition policy

o Are not obliged to participate in the monetary union, the EU’s common foreign and security policy or the EU’s justice and home affairs policies

o Do not participate in the Common Agricultural Policy (CAP) o Are not part of the EU’s customs union, which means they can set their own external

tariff and conduct their own trade negotiations with non-EU countries o Pay a fee to be part of the single market – do this by contributing to the EU’s

regional development funds and costs of EU programmes in which they participate - Would require keeping current EU regulations (but without having a seat at the table when

the rules are decided) - Becoming part of the EEA would not generate substantial fiscal savings for the UK

government - Would allow the UK to remain part of the single market while not participating in other,

deeper forms of European integration

Option 2: The Switzerland Model

- Negotiating bilateral deals with the EU - Switzerland still faces regulation without representation, and pays about

40% as much as the UK to be part of the single market in goods - Swiss have no agreement with EU on free trade of services (an area

where the UK is a major exporter)

While we are leaving the institutions of the

European Union, we are not leaving Europe.

We will remain a close friend and ally.

We will pursue a bold and ambitious free

trade agreement with the European Union

that allows for the freest possible trade in

goods and services between Britain and the

EU’s member states

Prime Minister Theresa May 29th March 2017

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- Allows flexibility to choose the EU initiatives in which it wishes to participate - Almost no influence over the design of the EU programmes in which it participates, makes

an in or out choice but no ability to shape it

Option 3: Going it alone (under WTO rules)

- If UK leaves EU without putting in place any alternative arrangements like those above, then trade with the rest of the world would be governed by the World Trade Organisation (WTO)

- Under WTO rules each member must grant the same ‘most favoured nation’ (MFN) market access including charging the same tariffs, to all other WTO members

- As a WTO member the UK’s exports to the EU and other WTO members would be subject to the importing countries’ MFN tariffs, and compared to EU or EFTA membership this would raise the cost of exporting to the EU for UK firms

- UK’s services trade would also be subject to WTO rules, since the WTO has made far less progress than the EU in liberalising trade in services, this would mean reduced access to UK markets for UK service producers

- WTO has no provisions for free moment of labour, therefore free labour mobility between UK and EU would cease

- Would give the UK more sovereignty - Price would be less trade and a bigger fall in income - Trouble with this option is that certain UK sectors (agriculture, cars, chemicals, etc.) will be

hit with tariffs

Option 4: The Canada Model

- Comprehensive Economic and Trade Agreement (CETA), which is not yet in force, gets rid of most tariffs on goods, but excludes some food items and services, it stipulates the need to prove where goods are made

- Gives Canada preferential access to the EU single market without the obligations that Norway and Switzerland face, eliminating most trade tariffs

- Some sensitive food items (including eggs and chicken) are not covered - Canadian exporters will have to prove their goods are entirely made in Canada, which

imposes extra costs, to prevent imports entering the EU through a “back door” - Services sector only partially covered by CETA - This type of deal would not give UK financial services the EU market access they have now - Hard for London based banks to get “passporting” rights for their services ion the EU, which

they hugely value now

Option 5: A UK Model?

A one-of-a-kind deal is what the UK government will push

for, but it would be foolhardy to think that any UK deal will

ignore precedents or allow London to get all of what it wants

without significant concessions in other areas.

What is the most likely outcome?

?

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The Government has accepted that it would be very unlikely to be able to negotiate a

comprehensive trade agreement by 2019. The Canada agreement took seven years to negotiate in a

situation where there was considerable good will. The UK economy is more complex than the

Canadian one and there is an absence of good will at the moment. The front runner in the French

Presidential election, Emanuel Macron has indicated that the UK should not be offered a particularly

favourable deal as it would encourage others to leave the EU as well.

Theresa May has publically stated that, from her point of view, “no deal is better than a bad deal.” In

which case the most likely option is that the UK would, at least initially, operate under WTO rules,

perhaps with a few small concessions added on. If negotiations go well, and more special

arrangements are added on then it may be possible for Theresa May to claim to have achieved her

ambition of a “Red, White and Blue Brexit.”

Speculation on countries (outside EU) that are interested in

establishing trade deals with Brexit Britain

Whitehall confirmed a list of ten economic powerhouses, including India, China, Japan, Australia and

Canada have already committed informally to forming strong trade deals with the UK.27

27 http://www.telegraph.co.uk/news/2016/07/16/theresa-may-plans-for-brexit-trade-deals-with-the-usa-and-austra/

US: “Indeed, the Republican Speaker of the House of Representatives of the U.S. Congress

has said that he is interested in starting negotiations with Britain as it negotiates Brexit.”

China: “In many respects, Britain and China have complementary strengths and needs in

their economies. China is seeking expertise in services and high tech industry, which

Britain can offer.”

Gordon Bajnai, a former Hungarian Prime Minister

“To prevent the bloc from unravelling, EU countries may seek to punish

Britain, so others dare not follow its exit path. “They would try to make

it as painful as possible, be it financially painful or politically

painful…The UK would face a hostile Europe.”

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Australian Prime Minister Malcom Turnbull confirmed he wants to complete a free trade deal with

Britain as he called Prime Minister Theresa May to offer his congratulations on her appointment.28

Brexit – the political context

The result of the EU referendum was a huge shock to the markets, the media and the political

establishment both in the UK and internationally. It has led to a new Prime Minister, dramatic changes

in the Cabinet and a surprise general election. However, now that the initial shock and surprise has

subsided, politicians and the public are getting used to the result. It is gradually becoming clear that

the fundamental features of the UK economy remain strong and the worst fears of those who argued

for Britain to remain have not been realised. From a political point of view the sky hasn’t fallen in.

Theresa May is expected to be politically strengthened after securing a personal mandate from the

British electorate.

For the Conservative Prime Minister and the Labour Mayor for London, the priority is now to be seen

to make a success of the economy, nationally and in the capital city, regardless of the result of the

referendum. The Prime Minister in her initial cabinet appointments, made international trade a

priority with the appointment of Dr Liam Fox, a prominent Brexiteer as Secretary of State for

International Trade. At the first gathering of the cabinet after the recess, ministers were all asked to

present how they were going to make a success of Brexit.

In London too, the new Mayor of London, Sadiq Khan has been keen to present London as open for

business. He launched a major campaign (#LondonIsOpen) that kicked off with a film broadcast to a

65,000-strong crowd at a Stevie Wonder concert in Hyde Park. Business leaders including Richard

Branson, City of London Policy Chairman Mark Boleat, Chief Executive of London Stock Exchange

Xavier Rolet along with Google, Hilton, Merlin Entertainments, have all backed the campaign. The

manifesto that he stood for election, commits him to promoting the city’s cultural riches to the rest

of the world, backing a second runway at London’s Gatwick Airport, bringing an NFL franchise and the

Tour de France to London and championing London industry abroad making the case for inward

investment and attracting ever more global business. He is also committed to challenging, “Unfair visa

rules which make it harder for London businesses to bring in the world’s best talent”

Significant political capital has been invested by both the main parties towards a positive and

constructive response to the referendum result. Whatever other uncertainties exist in the precise

details of the Brexit negotiations, the overwhelming political impetus will be to be seen to make a

success of the economy as a result. Politicians cannot be seen to be whingers on this issue. The view

is that the people have spoken. It is now for political leaders to deliver. As a result, the machine of

state, the civil service at a national and local level will be firmly pointed towards a delivering

negotiated settlement and industrial strategy that supports international trade and strengthens the

UK economy.

Europe – wider instability

28 http://www.express.co.uk/news/politics/690191/Britain-ten-Brexit-trade-deals-lined-up-economic-powerhouses

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Lenin observed that “There are decades where nothing happens; and there are weeks where decades happen.” The week after the referendum vote was one that will have shaped the political landscape in the UK for potentially twenty years. With a new Prime Minister and a definitive direction from the voting public, the terms of the political debate and policy direction in Britain are now set. The future of the rest of the EU is, however, now increasingly uncertain.

Before the referendum the German Chancellor Angela Merkel said that in the Sunday Times that the prospect of Britain exiting the EU was a ‘completely unnecessary risk’ which risks creating ‘extra instability’ in Europe at a point when it is already struggling with economic turmoil and a migration crisis. Her predictions may well be coming true.

Soon after the Brexit vote, Merkel’s coalition partner and Vice-Chancellor, the Social Democrat Sigmar Gabriel warned that the future of the EU itself could be in doubt if the UK's exit is handled badly. He said that the EU would go "down the drain" if other states followed Britain's lead. Mr Gabriel also indicated that trade talks between the EU and the US were not going well, saying, "In my opinion the negotiations with the United States have de facto failed, even though nobody is really admitting it."

Whilst the Transatlantic Trade and Investment Partnership or TTIP is intended to remove or reduce barriers to trade between the US and the EU. Mr Gabriel has argued that after 14 rounds of talks, the two sides had not agreed on a single common chapter out of 27 being discussed.

Concerns about the future of the EU are widespread. Donald Tusk, Poland’s former prime minister and president of the European Council, has said, “The spectre of a break-up is haunting Europe.” There are also concerns in Spain that the aftermath of the Brexit vote may inspire separatists in Catalonia. Spain also faces huge uncertainty following an inconclusive general election shortly after the UK referendum, followed by a period of deadlock which to date remains unresolved. There may be a fresh general election in December which would be the third such vote in 12 months.

Lorenzo Codogno, a former director-general of Italy’s treasury has said that further integration across the EU now seems very unlikely and that, “centrifugal forces will prevail and make integration even more difficult,” In France the far right leader Marine Le Pen, made it into the final round of the Presidential elections on a platform of a French withdrawal from the EU or “Frexit” and has predicted the death of the EU.

The leading candidate for the French presidency, Emmanuel Macron, seems likely to continue President Hollande’s policy that “a state cannot have better terms outside of the EU than in it”.

Opinion polls in Sweden have begun to shift and at least on has called for “Swexit”. In Italy the populist Five Star movement has pledged to demand a referendum on membership of the Euro, which would lead to a full-scale vote on EU membership. In the Netherlands, according to the latest polls, most voters are in favour of a referendum on EU membership, with far-Right politicians calling for a 'Nexit'.

So whilst the British political and policy environment is now mapped out and relatively clear, the rest of the EU faces a prolonged period of uncertainty making it difficult for businesses to plan. Charles Grant of the Centre for European Reform has said, “from now on, the narrative will be one of disintegration, not integration.”

Compared to the instability on the continent, the political and policy environment in the UK now looks positively serene. Those planning international events and conferences over the longer term can be re-assured that the major political decision, settling the next few decades of politics and public policy, has been taken. Unlike the rest of Europe, England now knows the direction in which it is heading and businesses can plan with much more confidence.

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Conclusion Britain has always had a complicated and fluctuating relationship with Europe, never really being a

comfortable fellow traveller on the journey towards an ever closer union. The referendum came about

as an inevitable outcome of the political positioning for the last general election but its result was still

a surprise to many.

London however remains a world city and the features that make it strong are not dependent on

continued membership of the EU. Its role as a financial centre will continue, thanks to its long

established reputation, expertise and time zone. Innovation, technology, biosciences and medical

research remain key drivers of the economy. The events industry and visitor economy remain strong.

London remains one of the world’s best connected cities and its many attractions remain attractive.

If anything, changes in the exchange rate following the referendum, has made the UK’s exports more

competitive and support the inward tourism and business tourism industry.

It is important to remember that in the immediate future there will be no changes to the relationship

with the rest of Europe. Britain remains a member of the EU until the end of March 2019. It is however

is already clear that the political direction from the top will be to secure a negotiated arrangement

with the EU that promotes trade and opens up and strengthening links with the rest of the world.

Whilst political steps will need to be seen to be taken to control immigration, the free movement of

goods for exhibitions and events should remain unaffected. There is also a political consensus that

visa regulations need to work for businesses and politicians of all persuasions want Britain to be seen

as open for business.

The early economic indicators since the referendum are more encouraging than many expected.

Employment has climbed and retail sales have increased. The more doom laden predictions of

recession seem not to be supported by more recent forecasts. Across a whole range of sectors

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including financial services, technology and the visitor economy growth continues and the prospects

look strong.

Whilst the full implications of the Brexit referendum are not yet fully played out, the political

landscape is now much more settled. A clearer sense of political direction is emerging from the new

Prime Minister and that will see the civil service directed firmly towards promoting international trade

and strengthening the economy. Every corner of government will be instructed to make Brexit work.

Britain’s economy has survived substantial shocks before and has a knack of bouncing back. During

the World War II, the government prepared a now famous poster for use in the event of an invasion,

which instructed British citizens to, “Keep calm and carry on.” That sentiment now probably best sums

up the attitude of the British civil service and the wider population as it comes to terms with the latest

shock to the British political system from the EU referendum. It would also appear to be a good

approach for all those thinking about business investment decision in the UK.

For the events industry in particular London will remain an excellent choice of location. Annual global

events that move to London now can expect a period of economic growth and political stability that

will allow continued expansion in terms of audiences and participants over the coming years.

Conversely those placed in other European cities may face a period of uncertainty as the Brexit

decision plays out across the continent.

The economic and political fundamentals that have made London a great host city for global events

remain strong. The cultural offering of restaurants, bars and shows in the capital will continue to be

diverse and welcoming. The business sectors especially in medicine, bioscience, finance and

technology are expected to remain dynamic and the exchange rate adjustment makes London

increasingly competitive. Brexit may yet prove to be an opportunity rather than a threat as London’s

events industry continues to thrive.

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David Campbell Bannerman, MEP and Co-Chair of Conservatives for Britain

Then think of the money saved - £55 million a day in membership fees. Would we spend the monies to

ease austerity, build hospitals, invest in flood defences, bypasses or reopened rail lines? The choice is

ours.

http://www.telegraph.co.uk/news/newstopics/eureferendum/12148307/Britain-can-enjoy-the-good-

life-after-Brexit.html

LCP Property

It is also worth noting that the EU has played only a limited role in attracting international capital to the

London property market, with only 12% of buyers coming from Europe according to LCP’s research. In

the unlikely event of a wholesale withdrawal of European buyers, there will be very little net effect on

the market.

http://www.theconsumervoice.co.uk/positive-quotes-about-the-brexit/

David Davis, Minister for Brexit

Indeed, far from being the risky option that many have claimed, Brexit gives us many tools to deal with

the very serious economic challenges that the country will face in the coming decades.

http://www.conservativehome.com/platform/2016/07/david-davis-trade-deals-tax-cuts-and-taking-

time-before-triggering-article-50-a-brexit-economic-strategy-for-britain.html

BREXIT BRIEFING

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Marine Le Pen, Leader of the National Front in France

Victory for Freedom! As I have been asking for years, we must now have the same referendum in France

and EU countries,” tweeted French National Front leader Marine Le Pen.

http://www.thejournal.ie/brexit-quotes-2844336-Jun2016/

Lord Farmer. Former Treasurer of the Conservative Party

Warnings of disaster if we leave are misguided. Britain, the world’s fifth-biggest economy, should be

confident that others will want to trade freely with it especially if, like the EU, they already do so.

Europe has a surplus of nearly £70bn with us and no reason to put up barriers.

“We can see the possibility now for a bright new beginning. By voting to leave, we will be taking back

democracy and this will benefit everyone. By ending a decades-old deception, we will be leading the

way for the continent to become more democratic and less intrusive. Brussels will moan, but I suspect

the peoples of Europe will be pleased.”

http://www.telegraph.co.uk/news/2016/05/15/eu-referendum-more-than-300-business-leaders-

back-a-brexit/

Peter Hargreaves, founder of financial advice company Hargreaves Lansdown

It will be the biggest stimulus for British business that I’ve seen since 1992. It’s going to make them very

profitable

http://www.independent.co.uk/news/business/news/brexit-peter-hargreaves-lansdown-leave-eu-

referendum-share-price-a7108871.html