Why ripping off your arm to spite your face is not a good thing.
There are about 3.7 million Europeans that live in the UK officially, but of course, that number is really a lot higher. There are the temporary migrants, there are the unregistered, there are people of dual nationality, and there are the offspring of European parents that live in the UK. The sheer explosion in the number of Europeans that settled here started when the wall came down in Germany in 1989. That opened the floodgates for anyone from the Soviet Union that could now come into the West. Since there was little point in letting millions of people try to squeeze through Checkpoint Charlie, other countries along the frontier of the Eastern Bloc started to open up their borders as well.
As Poland, Hungary, Romania, Bulgaria, and Czechoslovakia (as it was known back then) began to break free from the crumbling empire of the USSR, the EU integrated more than 500 million people into one seamless market, governed by one set of rules. Many came to the UK, and not just people from eastern Europe, but there are also millions of Germans, French, Dutch, Italians and Spaniards that live here, whilst being able to work within the EU. Undoubtedly, much of the success the UK enjoyed in recent past was driven by this huge inflow of human capital and the investments that came with it, both corporate as well as personal.
Now that’s all gone. I have often compared Brexit to ripping off the arm of a living body. Businesses have built infrastructure, put in place supply chains, and developed processes to fit one system for decades. There was also an abundance of qualified, free moving labour at competitive pricing to draw upon. All of a sudden, work permits will need to be acquired, goods will need to be checked, there are forms that need to be filled in, and VAT will need to be charged. Everything is double, one way of doing things to please the UK, the other to satisfy the EU.
What makes the whole thing even worse, is that we still don’t know what is going to happen. Negotiations on the manner in which we do business will take years to complete. Remember, the entire services industry didn’t get a deal, and the financial sector is still waiting anxiously to find out what equivalence means at some point in the future. In the meantime, you have to allocate more resources, incur additional costs, and how do you stop the bleeding? And therein lies the crux of it all: now that the arm is off, maybe you just don’t try to reattach it again.
Many Europeans have already left since that fateful referendum in June 2016. More will follow. It’s not because they want to, but it is simply no longer economical or personally suitable to stay here. Unequivocally, the opportunity set has changed. No one has any idea if the UK will again be an empire of old, or if the EU will prosper better on its own. However, one thing is very clear, there will be less Europeans in the UK, and that’s a great shame for all.