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Fish for finance is a possible trade-off that has been considered by both sides in the
trade negotiations Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market (economics), market. An early form of trade, barter, s ...
between the United Kingdom and the European Union (EU) over their future relationship following Brexit in January 2020. The Brexit withdrawal agreement between the two parties called for an agreement on fisheries to be concluded by June 2020, followed by an agreement on
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
at the end of July, deadlines which were both missed. Both were expected to be part of the final EU–UK trade agreement reached by the end of 2020, the end of the Brexit transition period. The final agreement had some broad outlines for a future fishing deal, primarily gradual EU concessions of fishing quota in UK waters, but was largely silent on finance. British commercial fishermen were among the most ardent supporters of Brexit before and after the 2016 referendum that began the process when a majority of voters opted for the country to leave the EU. Many of them had expressed discontent with the EU's
Common Fisheries Policy The Common Fisheries Policy (CFP) is the fisheries policy of the European Union (EU). It sets quotas for which member states are allowed to catch each type of fish, as well as encouraging the fishing industry by various market interventions. I ...
(CFP), under which the UK has had to share its exclusive economic zone (EEZ) with other member states' fishing fleets; Brexit proponents have argued that British fishermen should be able to catch at least the majority of the fish in that portion of the country's EEZ around the island of Great Britain and off the coast of Northern Ireland. During the UK's membership in the EU, much of the fish that British fishermen have historically caught in the EEZ has been exported to mainland Europe, leading many British fish processors, fish farmers and inshore fishermen (whose catch of primarily
shellfish Shellfish is a colloquial and fisheries term for exoskeleton-bearing aquatic invertebrates used as food, including various species of molluscs, crustaceans, and echinoderms. Although most kinds of shellfish are harvested from saltwater envir ...
is popular with consumers in France and Spain, but not the UK) to seek a continuation of the pre-2021 frictionless trade situation; conversely a majority of the fish consumed in the UK is caught outside British waters. EU fishermen who have themselves historically fished British waters plan to block imports of British fish, and even all British imports, if the UK limits their rights to do so. Industry advocates on both sides fear this could lead to potentially lethal violence on sea and land, in addition to the economic consequences of a trade war. The EU's eight western coastal states, whose fleets partake of the catch in British waters, have asked that no overall trade deal with the UK be concluded without a fisheries agreement; the UK conversely believes the issue does not have to be settled first. The British financial sector, which employs more people and accounts for a much greater share of the country's gross domestic product (GDP) than fishing, would like at the very least a declaration of
stock market equivalence Stock market equivalence is granted by the European Union to those countries whose stock markets are deemed to be 'equivalent' to those of the EU countries. On 3 January 2018, the EU implemented the " Markets in Financial Instruments Directive II" ...
similar to what the EU has extended to the US, Hong Kong, Australia and (in the past) Switzerland. Ideally the City wishes to maintain the level of access to EU markets it has enjoyed during the UK's membership in the bloc. EU officials and negotiators have said that they will be inclined to continue allowing that level of access only if the UK is likewise willing to allow the same level of access to its fisheries. Unlike the UK's fishermen, financial companies can move to take advantage of more favourable regulatory climates, and many have already begun relocating staff and operations to Dublin, Frankfurt, Paris or Amsterdam, or elsewhere in the EU. Deadlines set originally by the Withdrawal Agreement were missed, in part due to the disruption caused by the COVID-19 pandemic. By the end of 2020, it did not appear to observers or the parties themselves as if a deal would be reached, and the UK and EU both began to prepare for the worst possible impacts of that transition. On 24 December, a deal was announced with a compromise on fishing quotas that fishing industry spokesmen were disappointed by. Negotiations continue on a substantial financial services agreement, despite missing the original deadline of 31 March 2020.


Planned negotiation timetable

The
Withdrawal Agreement The Brexit withdrawal agreement, officially titled Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, is a treaty between the European Uni ...
by which the UK left the European Union at the end of January 2020 included a non-binding political declaration, concluded the previous October, setting the terms for post-Brexit relations, with the intent of reaching a comprehensive trade agreement by the end of 2020. The declaration sets forth specific dates prior to that for negotiating agreements on particular economic sectors. Among them are fisheries and financial services. On fishing, the declaration calls for the two parties to 'use their best endeavours to conclude and ratify their new fisheries agreement by 1 July 2020 in order for it to be in place in time to be used for determining fishing opportunities for the first year after the transition period'. No similar deadline is established for an agreement on financial services. Instead, the two sides committed to assessing each other's regulatory frameworks for
stock market equivalence Stock market equivalence is granted by the European Union to those countries whose stock markets are deemed to be 'equivalent' to those of the EU countries. On 3 January 2018, the EU implemented the " Markets in Financial Instruments Directive II" ...
by the end of June. Before that date, the agreement called for both sides to have a summit conference to assess the progress of the talks. Should the British government have desired an extension of the transition period to allow for longer negotiations, it could have requested one of up to two years no later than 1 July; the EU would have had to agree. These terms are set by the Withdrawal Agreement; to modify them would require a formal modification to that agreement itself. For the government to have requested an extension, it would also have to get permission from Parliament. An amendment to the bill implementing Brexit, barred the government from requesting one. Prime Minister Boris Johnson further told Parliament he would not request one, arguing that for trade talks to produce timely results, there needs to be a clear and early deadline. None of these deadlines were met; the disruptions resulting from the COVID-19 pandemic, which required several rounds of talks to be held virtually, have been held to blame, but the two sides remain very far apart in on the issues. Negotiations on fisheries continue with little indication of progress. By 30 June, the UK had only completed and returned four of the 28 questionnaires about its securities market regulation sent it by the EU; three weeks later, the government reported that all had been completed and returned. At that same time, the government confirmed it would not be seeking an extension, committing the UK to fully leaving the EU at the end of the year no matter what the circumstances.


Fishing and the United Kingdom


History of fishing conflicts and agreements between the UK and other nations

Seafood has long been a staple of inhabitants of the British Isles, surrounded by one of the world's richest fisheries. Danish and Norse raiders in the ninth century brought one fish species in particular, the North Sea cod, into the national diet. Other whitefish like halibut, hake and pollock, also became popular. By the end of the 14th century, fishing boats from the east coast of England, then as now home to most of the English fishing fleet, were sailing to Icelandic waters in search of these catches; their landings grew so abundant as to cause political friction between England and Denmark, who ruled Iceland at the time. The Danish King Eric banned all Icelandic trade with England in 1414 and complained to his English counterpart,
Henry V Henry V may refer to: People * Henry V, Duke of Bavaria (died 1026) * Henry V, Holy Roman Emperor (1081/86–1125) * Henry V, Duke of Carinthia (died 1161) * Henry V, Count Palatine of the Rhine (c. 1173–1227) * Henry V, Count of Luxembourg (121 ...
, about the depletion of fishing stocks off the island. Restrictions on British fishing passed by Parliament were generally ignored and unenforced, leading to violence and the Anglo-Hanseatic War (1469–74). Diplomats resolved these disputes through agreements that allowed British ships to fish Icelandic waters with seven-year licences, a provision that was struck from the Treaty of Utrecht when it was presented to the Icelandic Althing for ratification in 1474. This started a centuries-long series of intermittent disputes between the two countries, the most recent of which were the three " Cod Wars" between 1958 and 1976. Fishermen in Scotland, a country more dependent on their industry than England, bitterly resented the competition from Dutch boats in the country's waters, and when their king James united the Scottish and English crowns in 1609 as James I he reversed what had been the tolerant policies of his Tudor predecessors toward foreign fishing in British coastal waters and began requiring a steep licence fee. Dutch legal scholar
Hugo Grotius Hugo Grotius (; 10 April 1583 – 28 August 1645), also known as Huig de Groot () and Hugo de Groot (), was a Dutch humanist, diplomat, lawyer, theologian, jurist, poet and playwright. A teenage intellectual prodigy, he was born in Delft ...
had at the same time argued, in response to clashes between his country and Portugal, for the '' mare liberum'' principle, under which the seas were common property and all nations and people had a right to use it as they chose. England's John Selden responded in 1635 with the ''
mare clausum ''Mare clausum'' (legal Latin meaning "closed sea") is a term used in international law to mention a sea, ocean or other navigable body of water under the jurisdiction of a state that is closed or not accessible to other states. ''Mare clausum'' ...
'' "closed sea" principle under which a nation could appropriate the seas as easily as it would land. During the 18th century, British governments complained to France and the Netherlands as well as Denmark about their countries' fishing boats venturing into British waters. Eventually the Dutch agreed to respect a six-mile () limit, going no closer to British shores. After the Napoleonic Wars, French fishermen became much more aggressive around Great Britain, making their presence known along the Scottish coast and in the English Channel; the complaints they generated from British fishermen were reciprocated against them by the French. In 1843 the two countries concluded the first ever international agreement establishing exclusivity zones for their fisheries, of three miles (4.8 km) from their respective shores. Domestic demand for seafood in the UK grew rapidly following the Industrial Revolution, as the development of the country's rail network allowed fresh fish to reach a wider market away from the coasts;
fish and chips Fish and chips is a popular hot dish consisting of fried fish in crispy batter, served with chips. The dish originated in England, where these two components had been introduced from separate immigrant cultures; it is not known who created t ...
, first served in the 1860s, generally made with either cod or haddock, quickly grew to become a staple of English cuisine and a national symbol. In response steam-powered trawlers, which could go farther, stay out longer and catch more fish than their sail-driven predecessors, were added to the fishing fleet. This development has been considered the beginning of the decline of the British fishing industry, since even though its fish landings continued to increase until the late 1930s, when they were more than five times those of the late 2010s, the fleet's
productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
, measured in fish landings per unit of fishing power (LPUP), began a steady decline that continues. In the early 20th century, the return of modern British fishing boats to inshore waters off the northern coast of Norway after almost three centuries when they had respected royal decrees barring them from those areas, provoked a local backlash, and the newly independent Norwegian government began specifying conditions under which foreign boats could fish the country's waters north of the
Arctic Circle The Arctic Circle is one of the two polar circles, and the most northerly of the five major circles of latitude as shown on maps of Earth. Its southern equivalent is the Antarctic Circle. The Arctic Circle marks the southernmost latitude at w ...
. The seizure of a British trawler for violating those laws started negotiations between the two governments that World War I interrupted; afterwards the incidents continued, resulting in a 1935 Norwegian royal decree claiming the waters within of its shoreline as exclusively Norwegian, but enforcing it only irregularly pending an agreement with the UK. Thirteen years later, no agreement had been reached and after Norway began strictly enforcing its limit, the UK brought suit at the International Court of Justice, arguing that Norway's limits did not follow its coastline in that area as strictly as international law required. In 1951 the court found in Norway's favour. British trawlers began again heavily fishing the waters near Iceland, leading to the confrontations known as the "Cod Wars" of 1958–61, 1972–73 and 1975–76. A threat of actual violence was present, with fishing boats escorted to the water by the Royal Navy and the Icelandic Coast Guard similarly attempting to chase them away and using long
hawser Hawser () is a nautical term for a thick cable or rope used in mooring or towing a ship. A hawser passes through a hawsehole, also known as a cat hole, located on the hawse.The American Heritage Dictionary of the English Language, third edition, ...
s to cut nets from the British boats; actions that resulted in one serious injury on the British side and the death of an Icelandic engineer. Ships from both sides suffered damage from ramming attacks. A British ban on the import of all Icelandic fish backfired when the Soviet Union bought the catch instead. As this was during the
Cold War The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
, this led to fears that Iceland might carry out its threats to leave the North Atlantic Treaty Organization (NATO), and ultimately the other nations of the military alliance brokered a resolution where the UK had to accept Iceland's establishment of a exclusive zone around its shores where only its own ships could fish and a exclusive economic zone (EEZ) where other nations' fishing fleets needed Iceland's permission. The effective loss of the Icelandic fishery had drastic effects on the British fishing industry, already dealing with the ongoing decline in both LPUP and landings. In the home ports of many of the ships that had been fishing off Iceland, an estimated 1,500 people lost jobs either on boats or in fish processing plants; workers in shore-based support industries, and those other sectors that relied on local economies built around fishing, were also unemployed in significant numbers. Some of those ports, such as Fleetwood on the Lancashire coast, and Grimsby, at the mouth of the Humber, have never recovered.


EU membership era

Since the 1976 ending of the Cod Wars had forced the UK to abandon the "open seas" international fisheries policy it had previously espoused, Parliament passed the
Fishery Limits Act 1976 The Fishery Limits Act 1976 is an Act of the Parliament of the United Kingdom (1977 c. 86) in order to implement the extension of fishing waters under the European Community's Common Fisheries Policy into British law. The Act extended the fishi ...
, declaring a similar zone around its own shores, a practice later codified into the United Nations Convention on the Law of the Sea (UNCLOS). It was not able to enforce them for long against
European Communities The European Communities (EC) were three international organizations that were governed by the same set of institutions. These were the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EAEC or Euratom), and the ...
member countries, as the UK had joined it too, including the EU's predecessor, the
European Common Market The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisb ...
. As a condition of its membership, the UK had to accede to the
Common Fisheries Policy The Common Fisheries Policy (CFP) is the fisheries policy of the European Union (EU). It sets quotas for which member states are allowed to catch each type of fish, as well as encouraging the fishing industry by various market interventions. I ...
(CFP), for which the basics had just largely been negotiated, and share those exclusive waters with other member states, including France and the Netherlands, as well as Norway, a non-member state that jointly manages its fishery with the EU, and the Faroe Islands, an autonomous Danish archipelago northwest of the UK. Sir Con O'Neill, who led the UK's negotiating team, said fishing was the most difficult issue to resolve as part of the UK's accession, calling it "economic peanuts but political dynamite". The government at different times feared that it would cost it its parliamentary majority in favour of accession, as had happened in Norway. Prime Minister Margaret Thatcher's government successfully lobbied for the CFP to include an increase in the Total Allowable Catch (TAC) for British vessels for some species, such as haddock, to make up for their lost Icelandic fishing grounds. In the years before 1983, when the CFP came into full effect, many British fishermen believed that fleets from the seven other coastal states increased their catches in British waters since the quotas for the policy, meant to conserve stocks and curb the ongoing
overfishing Overfishing is the removal of a species of fish (i.e. fishing) from a body of water at a rate greater than that the species can replenish its population naturally (i.e. the overexploitation of the fishery's existing fish stock), resulting in th ...
, were based on historical data. After the CFP, all member states' EEZs were shared. British boats could fish off the shores of any of the other seven coastal member states, and their boats could fish in British waters, as desired. The British fishing industry continued to decline, exacerbated by the use of newer technology that required less labour and restored profit margins. While the CFP established national quotas, it left it to the member states to decide how to allocate them among its own fishing boats. The UK, unlike the others, divided them into "fixed quota allocations" (FQAs) and allowed its fishermen to trade them freely, buying and selling shares of its TAC for various species with each other and even foreigners. This led to the "quota hoppers" controversy in the mid-'80s when Spanish fishermen set up British companies to buy British ships and their corresponding quota allegations, then landed fish caught in British waters, counting against the British quota, in
Galicia Galicia may refer to: Geographic regions * Galicia (Spain), a region and autonomous community of northwestern Spain ** Gallaecia, a Roman province ** The post-Roman Kingdom of the Suebi, also called the Kingdom of Gallaecia ** The medieval King ...
for processing and ultimate sale in Spain, which had recently joined what had by then been renamed the European Economic Community. Thatcher's government responded by passing legislation effectively requiring that all British fishing boats be owned by British citizens or companies that were 75 per cent British-owned, and controlled or supervised from the UK. The Spanish companies challenged this in court as a violation of EU law and treaties, resulting in a seminal series of decisions that established the primacy of EU law over national law where the two were in conflict. The CFP did not put an end to confrontations at sea between the UK and other nations, both in and out of the EU. French fishermen clashed with the Royal Navy in 1993 over their rights in the waters near the Channel Islands. In 2010 the '
Mackerel Mackerel is a common name applied to a number of different species of pelagic fish, mostly from the family Scombridae. They are found in both temperate and tropical seas, mostly living along the coast or offshore in the oceanic environment. ...
War' erupted after Iceland and the Faroes changed their minds about previously agreed quotas of that fish in their waters, where stocks had been moving to in response to climate change, and vastly increased that portion they allowed themselves from their EEZs; in response, Scottish trawlers blocked a Faroese ship from landing of mackerel to a Peterhead processing plant. Two years afterward, French boats started the '
Scallop War The English Channel scallop fishing dispute, also called the Great Scallop War or guerre de la coquille, occurred on 10 October 2012 or 8 October 2012, between British and French fishermen in the Channel off the coast of Le Havre, France. Th ...
', throwing rocks at British dredgers taking those shellfish from beds in the English Channel the French claimed were within of their coast and thus not for the British to take. Some fishermen went to elaborate lengths to evade quota enforcement. In the late 2000s Scottish authorities uncovered a 'black landings' scheme in which over two dozen boat captains and three large processing plants had conspired to process and sell £63 million worth of mackerel and herring caught in violation of quota. At one Peterhead plant, they built an elaborate system of underground pipelines and valves, including scales and computers known only to those involved, to conceal the true origin of of fish over quota. Most pleaded guilty at trial and were fined. With the passage of the Marine and Coastal Access Act 2009, the UK finally established its own EEZ, using the same boundaries created for fishing in 1976, replacing the definitions of its territorial waters it had used in different contexts, such as fishing, mineral rights, and pollution control. Its boundaries were formalised with a 2013 Order in Council deposited with the United Nations the following year.


Brexit

By June 2016, when British voters chose to leave the EU, the CFP limited British fishermen to 36 per cent of the total catch from their home country's waters, which amounted to a quarter of the total EU catch. Cod stocks had rebounded to sustainability and the British fleet's net profit margin had become the highest in the EU at 35 per cent, and second only to Spain's in terms of capacity by gross tonnage. British fishermen still strongly supported Brexit due to the restrictions of the CFP, which many identified as the reason for the industry's decline; the overall size, capacity and power of the British fishing fleet had declined by about 30 per cent since 1996. A poll taken two weeks before the referendum found 92 per cent of fishermen planned to vote Leave, with many of those who did believing that departure from the EU would benefit their industry. Brexit proponents used the plight of the UK's fishermen as a large part of its campaign for Leave, taking advantage of their sentimental and symbolic importance to the country. "Here the referendum was lost, in the romance of the sea, the rugged cliffs and coasts of our island story among old salt spirits of a seafaring nation",
Polly Toynbee Mary Louisa "Polly" Toynbee (; born 27 December 1946) is a British journalist and writer. She has been a columnist for ''The Guardian'' newspaper since 1998. She is a social democrat and was a candidate for the Social Democratic Party in the 19 ...
observed in '' The Guardian'' after a visit to Hastings. "Economics says fishing is of nugatory value, but politics says fishing is deep-dyed in national identity, down to the last fish and chip shop." The fishermen themselves reiterated their longstanding complaint that their governments had regularly sacrificed their interests from the country's EU accession onward. They pointed to perceived inequities such as fishing fleets from other EU countries being allotted 60 per cent by weight, and specifically imbalances such as France being allowed 84 per cent of Channel cod while the UK was limited to 9 per cent. A 2017 study of EU fishing data by the NAFC Marine Centre of the University of the Highlands and Islands, done at the request of the Shetland Fishermen's Association, found that the rest of the EU takes more fish from British waters under the CFP than the UK does from other EU countries' EEZs—boats from the rest of the EU take six times more fish and shellfish by value, and 10 times more by weight, than British boats do, whereas British boats only take 12 per cent of the total EU catch from outside the UK. Another NAFC study the following year found that Iceland and Norway, outside the CFP and EU, landed 95 and 84 per cent of the catches from their EEZs. When the vote was held, the results from the fishing communities along the south and east coasts of England, who blamed the CFP for their industry's decline, came in strongly for Leave. In Scotland, the Parliamentary constituency of Banff and Buchan, where Peterhead and
Fraserburgh Fraserburgh (; sco, The Broch or ; gd, A' Bhruaich) is a town in Aberdeenshire (unitary), Aberdeenshire, Scotland with a population recorded in the United Kingdom Census 2011, 2011 Census at 13,100. It lies at the far northeast corner of Aber ...
, two of the largest fishing ports in the UK (and at the time, the EU), are located, was the only constituency to support leaving the EU, by a margin of 54 per cent, a higher margin than the 52 per cent overall majority and much higher than the 38 per cent support average support for Leave across Scotland. A few months after the vote, Bertie Armstrong, head of the Scottish Fishermen's Federation (SFF), said the UK should not begin renegotiating neighbour states' fishing rights in British waters until after it had completed the process of leaving the EU. "In our strong opinion, you do not in the Brexit process organise access for all those who want it—there has been 40 years of distortion with that—you organise it afterwards", he told the House of Lords. "Allow them to have the fish, of course, but access is a matter of negotiation after Brexit."


21st-century British fishing industry

After nearly half a century of membership in the EU and its predecessor organisations, the relationship between British fishermen and their colleagues and consumers in those states remaining members of the EU is closely intertwined. Most of what British fishermen catch in their waters, particularly shellfish, which is not controlled by a CFP quota, is sold on the continent. Similarly, most fish sold and consumed in the UK has been caught elsewhere. The UK runs a
trade surplus The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
in fish, exporting 80 per cent of what it catches—40 per cent of the total catch in British waters by weight but 60 per cent by value—and importing 70 per cent of what it eats. This is a result of differences in national tastes and changing fish stocks. To meet demand for cod, the most popular fish to eat with chips, the UK imports 83 per cent of that fish it eats, from international waters off Scandinavia, usually the Barents Sea, plied mostly by Icelandic, Norwegian and Russian vessels. In turn, the
herring Herring are forage fish, mostly belonging to the family of Clupeidae. Herring often move in large schools around fishing banks and near the coast, found particularly in shallow, temperate waters of the North Pacific and North Atlantic Oceans, i ...
abundant in British waters is taken mostly by fishermen from other EU countries and exported to Germany where it is the third most popular fish, much of it used to make ''
Rollmops Rollmops () are pickled herring fillets, rolled into a cylindrical shape, often around a savoury filling. Presentation The filling usually consists of onion, sliced pickled gherkin, or green olive with pimento. Rollmops are often skewered wit ...
'', a comfort food similar to fish and chips popular as a hangover cure, since there is less demand for herring in the UK than there was before the species was overfished in the 1970s; kippers have been a less common breakfast since then. Two-thirds of the UK's shellfish catch, at £430 million a quarter of all British fish exports by value, ends up in France and Spain; diners in the former country are also partial to saithe, a species largely passed up in the UK. British whelks also feed a thriving market in East Asia. Subsectors of the British fishing industry vary in the benefit, or lack thereof, they derive from trade with the EU and the CFP. Deep-sea fishermen have been the most vocal supporters of Brexit, blaming EU restrictions for the decline of their industry in the UK and competition from other countries (and Norway) that they see as unfair. Inshore fishermen, whose take of primarily shellfish is exempt from quota and who largely work in coastal waters that have always been exclusively British, regulated not by the EU but by the UK's own regional Inshore Fisheries and Conservation Authorities, were more ambivalent, believing that Brexit will primarily benefit the deep-sea fleet and concerned about the effects a trade war or the resumption of trade barriers could have on their markets should EU countries retaliate for any restrictions the UK might impose if a deal cannot be reached. British fish processors, a £4.2-billion industry, and fish farmers, many of whom also depend heavily on Continental markets, also hope for a seamless transition to post-Brexit trade. The EU's
free movement of labour The freedom of movement for workers is a policy chapter of the Acquis, acquis communautaire of the European Union. The free movement of workers means that nationals of any member state of the European Union can take up an employment in another mem ...
policy has also benefited landlords in communities with processing plants where the fishermen themselves strongly supported leave; many workers from elsewhere in the EU, particularly
Latvia Latvia ( or ; lv, Latvija ; ltg, Latveja; liv, Leţmō), officially the Republic of Latvia ( lv, Latvijas Republika, links=no, ltg, Latvejas Republika, links=no, liv, Leţmō Vabāmō, links=no), is a country in the Baltic region of ...
, have come to work in the plants and rented local housing. Seafood restaurants in the UK, too, have also benefited from EU staff, since workers from those countries are more likely to consider working in the front end of restaurants as waitstaff and ''
maître d' ''Maître'' (spelled ''Maitre'' according to post-1990 spelling rules) is a commonly used honorific for lawyers, judicial officers and notaries in France, Belgium, Switzerland and French-speaking parts of Canada. It is often written in its abbrev ...
''s as a career rather than a way station to one. Disparities exist within the British fishing industry as well. In 2004, a report by the
Royal Society of Edinburgh The Royal Society of Edinburgh is Scotland's national academy of science and letters. It is a registered charity that operates on a wholly independent and non-partisan basis and provides public benefit throughout Scotland. It was established i ...
found that Scotland accounted for 62 per cent of the UK's landings by value, and half its fish processing industry, despite being home to only 8.6 per cent of the country's people; by 2019 the Scottish fishing industry was still described as being 53 per cent of the total UK industry. Much of that Scottish catch, more than half of which is pelagic species, comes in turn from just 27 trawlers owned by several large companies based in the country's North East and the
Shetlands Shetland, also called the Shetland Islands and formerly Zetland, is a subarctic archipelago in Scotland lying between Orkney, the Faroe Islands and Norway. It is the northernmost region of the United Kingdom. The islands lie about to the ...
that primarily harvest pelagic fish. These companies themselves are owned by five families on the ''
Sunday Times Rich List The ''Sunday Times Rich List'' is a list of the 1,000 wealthiest people or families resident in the United Kingdom ranked by net wealth. The list is updated annually in April and published as a magazine supplement by British national Sunday news ...
'', which between them control outright or in part nearly half of Scotland's FQAs, according to a 2018
Greenpeace Greenpeace is an independent global campaigning network, founded in Canada in 1971 by Irving Stowe and Dorothy Stowe, immigrant environmental activists from the United States. Greenpeace states its goal is to "ensure the ability of the Earth t ...
report. Three-quarters of the boats in the Scottish fleet work entirely in inshore waters, many off the country's west coast, catching primarily the langoustine popular with French, Spanish and Portuguese consumers. This large fleet's shellfish catch is conversely overall the smallest portion of the Scottish annual catch. In England it makes up more than a majority, in Wales almost the entire catch, and in Northern Ireland the largest portion, though not a majority, of the catch as measured in tonnes. Greenpeace also found disproportionate concentrations of quota ownership among the English fishing fleet, as well, with foreign-owned (mostly Dutch, Icelandic or Spanish) but British-flagged vessels also holding almost half the quota. One, the Dutch 'supertrawler' ''Cornelis Vrolijk'', registered to Caterham, owns 23 per cent of the British TAC and 94 per cent of the UK's herring quota. A further 30 per cent is also owned by three Rich List families, whom Greenpeace called the industry's 'codfathers'. As in Scotland, the small boats (less than long) that fish inshore waters exclusively make up the bulk of the fleet (77 per cent) but hold less than 3 per cent of the quotas for fish species subject to quotas under the CFP. Unlike England, Scotland's share of the quota is mostly Scottish-owned, due to the prevalence of family-owned businesses in that sector there. Most of Wales' very small share of the UK quota, by contrast, is foreign-owned (The total foreign ownership of British quotas is 13.2 per cent, third in the EU after Belgium and Denmark). Under current British rules, foreign-owned boats that hold quota shares must have one of five economic connections to the UK, such as a majority British crew or landing more than half their catch at British ports, to do so. Fishermen who advocated for Brexit would like to see those requirements tightened, proposing that ownership, crew and catch all meet 60 per cent thresholds, but due to unclear legal status, foreign companies holding quota under the old terms would likely sue to block such a law. In Northern Ireland, 55 per cent of the almost exclusively British-owned quota is held by a single boat, the ''Voyager''. This share was large enough that after the company that owned the supertrawler decided it was time for a new boat and scrapped the old one in 2015, it turned a £2.5-million profit in the meantime by leasing the quotas to other fishermen until its new boat arrived in 2017. When that ship arrived, at , it was too large for the old ship's harbour at
Kilkeel Kilkeel () is a small town, civil parish and townland (of 554 acres and 6521inh) in County Down, Northern Ireland. It is the southernmost town in Northern Ireland. It lies within the historic barony of Mourne. Kilkeel town is the main fishing ...
and so lands its catch outside the UK in Killybegs, Ireland's largest fishing port.


Financial industry in the United Kingdom

London has been a commercial centre since its establishment within the bounds of the present City of London, later to be used
metonym Metonymy () is a figure of speech in which a concept is referred to by the name of something closely associated with that thing or concept. Etymology The words ''metonymy'' and ''metonym'' come from grc, μετωνυμία, 'a change of name' ...
ically to refer to the UK's financial industry, during Roman times; it has been the capital of England and, later, the United Kingdom ever since. In the 16th and 17th centuries, the modern British banking industry began to grow along with the rapidly expanding city, a magnet for immigrants, its economy fuelled by mercantile trade with Europe and the rest of the world. In 1571, financiers began congregating at Jonathan's Coffee-House to make deals and review regularly posted prices for securities and commodities, a group meeting from which the London Stock Exchange (LSE), the world's oldest, arose. The
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
, established privately in 1694 to fund the British government's expenses in the
Nine Years' War The Nine Years' War (1688–1697), often called the War of the Grand Alliance or the War of the League of Augsburg, was a conflict between France and a European coalition which mainly included the Holy Roman Empire (led by the Habsburg monarch ...
, eventually became the UK's central bank. The Bank established its offices early on in
Walbrook Walbrook is a City ward and a minor street in its vicinity. The ward is named after a river of the same name. The ward of Walbrook contains two of the City's most notable landmarks: the Bank of England and the Mansion House. The street runs ...
in the City of London, moving in 1734 to its current home on Threadneedle Street, followed by other banks and financial services companies. For a while, the UK's financial industry was in the same neighbourhood as the centre of its fishing fleet, as reflected in street names still in use like Old Fish Street Hill. The Billingsgate Fish Market was originally situated nearby; it has since followed the banks to Canary Wharf. The venture capital industry grew out of the financing of high-risk, high-reward whaling expeditions. At that time London competed as the centre of European finance with Amsterdam, whose financial innovations the British city's bankers, brokers and traders quickly brought into use. As the political and economic influence of the Netherlands declined in the 18th century, Paris emerged as a replacement rival. After the
French Revolution of 1848 The French Revolution of 1848 (french: Révolution française de 1848), also known as the February Revolution (), was a brief period of civil unrest in France, in February 1848, that led to the collapse of the July Monarchy and the foundation ...
forced the
Bank of France The Bank of France ( French: ''Banque de France''), headquartered in Paris, is the central bank of France. Founded in 1800, it began as a private institution for managing state debts and issuing notes. It is responsible for the accounts of the F ...
to suspend specie payments, London became, as Walter Bagehot put it 25 years later, "the sole great settling-house of exchange transactions in Europe ... The number of mercantile bills drawn upon London incalculably surpasses those drawn on any other European city; London is the place which receives more than any other place, and pays more than any other place, and therefore it is the natural 'clearing house.'" World War I damaged London's position slightly, allowing
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
to compete closely. The Bank of England was nationalised in 1946, but the city's banking interests still controlled its policy decisions, favouring the financial sector even as manufacturing declined, keeping the pound and interest rates high. In those years, New York overtook London, but then the Eurodollar market emerged in the 1950s, as a result of the Marshall Plan, and London's banks and traders were able to corner it, restoring London to its earlier position. By 1971, the Eurodollar market was equal in size to the French money supply and 160 banks from 48 countries had branches in London. London gained comparative advantage due to lighter
regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...
under English common law, allowing its banks to lend to Communist countries during the
Cold War The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
more freely than their American competitors could, and its time zone, with the morning hours of the trading day overlapping with the end of the day in the emerging Asian markets and the later hours coinciding with New York's morning hours. Reform began in 1979 with the removal of some
foreign exchange The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
controls imposed during World War II; the Eurodollar market had grown over a thousandfold by 1983 from what it was in 1960. In October 1986, London became even more attractive for international finance after Margaret Thatcher's government settled a
competition law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
suit the previous government had brought against the LSE. The ensuing reform, known later as the "
Big Bang The Big Bang event is a physical theory that describes how the universe expanded from an initial state of high density and temperature. Various cosmological models of the Big Bang explain the evolution of the observable universe from the ...
", removed many remaining older traditions on the LSE, such as a prohibition on foreign membership, divisions of labour between market makers and brokers, fixed brokerage commissions and
open outcry Open outcry is a method of communication between professionals on a stock exchange or futures exchange, typically on a trading floor. It involves shouting and the use of hand signals to transfer information primarily about buy and sell order ...
trading. The City itself went further, with many companies moving to pricing products in US dollars rather than pounds sterling and acting as intermediaries instead of lenders; by 1995, three years after the UK's membership in the EU made it part of the Single Market, the LSE's daily turnover had quadrupled. The influx of foreign capital led to many British banks and other financial institutions merging with or being acquired by larger American, German, Swiss or Japanese companies, strengthening the city as a sector at the cost of much of its domestic ownership. Within a year of the Big Bang, 75 of the 300 LSE member companies were foreign-owned. "If it's not bolted to the floor we move it to London", an American banker told an analyst asking about his company's European operations. Regulatory changes even affected the city's geography. The Bank of England had previously insisted all its banks have their offices within a 10-minute walk of the governor's office on Threadneedle Street near the City centre, but that rule was dropped when the
Securities and Investments Board The Financial Services Authority (FSA) was a quasi-judicial body accountable for the regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investments Board (SIB) in 1985 ...
(later the Financial Services Authority (FSA)) was created to regulate the industry. This accelerated the move to construct and occupy new offices three miles (4.8 km) on the
Isle of Dogs The Isle of Dogs is a large peninsula bounded on three sides by a large meander in the River Thames in East London, England, which includes the Cubitt Town, Millwall and Canary Wharf districts. The area was historically part of the Manor, Ham ...
in Canary Wharf, an area of the Docklands that had been severely damaged by German bombs during the war. After some early struggles, Canary Wharf began attracting construction and companies by the end of the 20th century, its skyscrapers rivalling similar ones in the city as both dominated the London skyline. Throughout the end of the 20th century, and into the 21st, the financial industry continued to grow and play an important role in the British economy as one of its most productive sectors, accounting for 16 per cent of all British exports, and 39 per cent of all exported services. To preserve the city's independence, the UK continued to use the pound and remained one of the few EU members outside of the Eurozone. Finance continued to grow at the expense of manufacturing, since the capital inflows kept the pound high, resulting in regular trade deficits. These were blamed for the widespread negative impacts of the
2008 financial crisis 8 (eight) is the natural number following 7 and preceding 9. In mathematics 8 is: * a composite number, its proper divisors being , , and . It is twice 4 or four times 2. * a power of two, being 2 (two cubed), and is the first number of t ...
, which resulted in a change in how the industry was regulated, with the FSA dissolved in 2012 and its responsibilities split between the new
Financial Conduct Authority The Financial Conduct Authority (FCA) is a financial regulation, financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The ...
, which enforces the laws regarding trading and products, and the Bank of England's Prudential Regulation Authority, trusted with maintaining the stability of the financial system as a whole.


Brexit

Prior to the Brexit referendum in 2016, financial companies were divided over the potential effects of the UK leaving the EU. As a member state, companies in the UK were granted "passporting" rights by the EU, allowing them to sell services and products to clients throughout all 26 other states without any special permission from those states. They also benefited from trade agreements between the EU and third parties, such as the US, with terms that might not be available if the UK alone negotiated them with those other countries or trading blocs. Much of the foreign capital drawn to the City came specifically to be within the single market and reap its benefits. British financiers had been relieved the previous year when the
European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...
took the UK's side against the European Central Bank in invalidating a regulation that clearing houses that handle large euro-denominated transactions must be located in the eurozone. Had the regulation stood, it would have been an advantage for Frankfurt, the financial centre of the eurozone, with aspirations of displacing London eventually. Should the UK leave the EU, clearing houses believed they would have to relocate as they doubted the EU would allow such a large amount of transactions in its own currency to take place outside its jurisdiction. London had built itself as a financial centre through its willingness to hire foreign talent, and it continues to do so. In 2017 more than twice as many workers in the city were natives of non-UK EU member states than on average for the UK, and in 2018 39 per cent of the City workforce were foreign-born. Tighter immigration restrictions and controls as a result of Brexit might affect their continued ability to work in the UK. A minority of financiers believed the city would prosper outside of the EU.
Howard Shore Howard Leslie Shore (born October 18, 1946) is a Canadian composer and conductor noted for his film scores. He has composed the scores for over 80 films, most notably the scores for ''The Lord of the Rings'' and ''The Hobbit'' film trilogies. ...
told ''The Guardian'' that EU rules were preventing venture capital trusts from adequately funding projects developed by researchers at British universities. He also felt that getting outside the jurisdiction of the EU's Markets in Financial Instruments Directive 2004 would benefit investors and financiers, and did not worry about losing access to the single market as Germany's ''
Mittelstand commonly refers to a group of stable business enterprises in Germany, Austria and Switzerland that have proved successful in enduring economic change and turbulence. The term is difficult to translate and may cause confusion for non-Germans. It ...
'', the small and medium-sized businesses that make up much of that country's manufacturing and service sectors, would insist on retaining access to London's financial services. Shore said that most of the voices in the financial industry supporting Remain were the heads of banks and insurance companies, who tended to think in terms of the short terms during which they would hold those jobs. He preferred to think long term, and saw the real competitors after Brexit as being the US, Singapore and Hong Kong. "If we are going to have a level playing field with hem andcompete across the globe, we need to deregulate."


Negotiations

Six weeks after the transition period began, final Brexit negotiations were impaired by the COVID-19 pandemic and the lockdowns and diversion of resources it required. Johnson and both the UK's chief negotiator
David Frost Sir David Paradine Frost (7 April 1939 – 31 August 2013) was a British television host, journalist, comedian and writer. He rose to prominence during the satire boom in the United Kingdom when he was chosen to host the satirical programme ' ...
and his EU counterpart
Michel Barnier Michel Barnier (born 9 January 1951) is a French politician who served as the European Commission's Head of Task Force for Relations with the United Kingdom (UK Task Force/UKTF) from 2019 to 2021. He previously served as Chief Negotiator, Task ...
were all taken ill with the virus. Talks continued, over Internet videoconferencing, but with little apparent progress. Johnson has said that he wants the UK's ultimate agreement with the EU to be like the Comprehensive Economic and Trade Agreement (CETA), concluded in 2014 between the Union and Canada, which while it eliminates most tariffs maintains standards enforcement and does not guarantee frictionless trade. In a December 2017 presentation to heads of state and government at the
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political direction and priorities of the European Union. It is composed of the heads of state or government of the EU member states, the President of the E ...
, Barnier, who in September that year had indicated his intention to teach the British people a lesson for leaving the EU, suggested the CETA relationship, similar to the EU's agreement with South Korea, would be the only outcome for both parties given the UK's red lines. In November 2019, Sir
Ivan Rogers Sir Mark Ivan Rogers (born March 1960) is a former senior British civil servant who was the Permanent Representative of the United Kingdom to the European Union from 4 November 2013 until his resignation on 3 January 2017. Education Rogers ...
, the UK's last Permanent Representative to the EU before the Brexit vote, said in a speech that CETA is "much cited, but I fear not very well understood, by the Johnson Government", saying that it took years of negotiation to produce a document whose main section is 550 pages long, with appendices and annexes covering provisions specific to individual EU member states bringing the total page count to 6,000. In February 2020, Barnier ruled out the possibility of an agreement similar to CETA, saying that unlike Canada, Japan or South Korea, the UK is immediately adjacent to the EU and cannot be so easily exempted from so many of its rules. "We remain ready to offer the UK an ambitious partnership: a trade agreement that includes in particular fishing", he said. The Prime Minister's office responded with a tweet showing the slide from Barnier's 2017 presentation and asking him "What's changed?" Four months later
Michael Gove Michael Andrew Gove (; born Graeme Andrew Logan, 26 August 1967) is a British politician serving as Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations since 2021. He has been Member of Parli ...
,
Minister for the Cabinet Office The Minister for the Cabinet Office is a position in the Cabinet Office of the United Kingdom. The minister is responsible for the work and policies of the Cabinet Office, and since February 2022, reports to the Chancellor of the Duchy of Lan ...
, confirmed that the government would not be seeking an extension at the end of June. The EU negotiating team said through a spokesman that the two sides would "intensify" the talks, with in-person meetings resuming, in order to have a draft agreement in place by October. Johnson had said after an earlier meeting with European Commission president Ursula von der Leyen that he was very optimistic that the two parties would have an agreement in place before the end of December. The UK government's insistence on a brief timeline, even with the pandemic, has led to speculation that the economic effects of a hard
no-deal Brexit A no-deal Brexit (also called clean break BrexitBBC. (2019)''Brexit: Jargon-busting guide to the key terms'' (BBC) Retrieved 29 March 2019.) was the potential withdrawal of the UK from the European Union (EU) without a withdrawal ...
, a major fear during 2019, might yet come to pass in the wake of a failure to reach a trade agreement should 2020, and with it all formal effects of the UK's EU membership, end without any broad trade agreement to replace them. This has been seen as an advantage to the hard-line Brexiteers, as the economic effects of the pandemic for both the EU and UK have been severe enough that no-deal might not add to them significantly. Even if the government were to be attempting to avoid that, the short timelines and the many issues involved mean no-deal remains a real possibility. In late July it was reported that the government was "giving up hope" for a deal before the end of the year, preparing to start 2021 that way and advising businesses to do the same. It held out hope for a minimal deal by October, but no more than that, putting the onus on the EU to demonstrate its commitment to reaching that deadline by getting serious about reaching an agreement no later than mid-August. German chancellor Angela Merkel likewise called for the EU to prepare more seriously for the same outcome. Trust between the two ebbed when the UK government published the United Kingdom Internal Market Bill, designed to preserve the territorial integrity of the United Kingdom, on 9 September 2020, with Johnson having set an absolute deadline of 15 October for a deal to be reached. The Bill contained a clause which would allow a specific part of the Withdrawal Agreement to be overridden by barring any border checks between Northern Ireland and the rest of the UK. The EU demanded in turn that the bill be withdrawn by the end of the month or there would be no deal. The UK government ignored that demand, and the Bill went on to pass its second reading in the House of Commons on 15 September and its third on 29 September. The Bill has now gone to the House of Lords. Meanwhile, negotiators on both sides agreed there was "cautious optimism" that a deal could be reached by mid-October, just ahead of a
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political direction and priorities of the European Union. It is composed of the heads of state or government of the EU member states, the President of the E ...
summit, even as each called on the other to go further than that upbeat attitude by making significant concessions. The Internal Markets Bill, which one European called "the gun on the table", was cited as one place where the UK will have to make significant changes if it genuinely wants a deal; By the end of the month Johnson had delayed the bill's enshrinement until December, reportedly as a result of a London School of Economics report suggesting that exiting the EU without any deal could cause the UK far more economic harm than the pandemic has. At the beginning of October the European Commission informed the UK that it was beginning an
infringement procedure The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Unio ...
, an action in the
European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...
alleging that a member state has failed to meet its obligations under the Treaty on the Functioning of the European Union, against it over the bill.


Positions

The UK's goals for the two industries in the talks are to secure greater control over its own waters while preserving the city's access to European markets on nearly the same terms. The EU, particularly its member nations whose fleets have come to depend on catches from British waters, wants to maintain the current situation, much as the UK does with finance; before the talks the EU states toughened Barnier's negotiating mandate to say that the agreement on fishing rights "build upon" the existing terms, instead of merely "upholding" them, one of the few instances where that was done. For the EU, a separate Fisheries Agreement is a keystone of any trade deal. "No fisheries agreement means no post-Brexit agreement" said
François-Xavier Bellamy François-Xavier Bellamy (born 11 October 1985) is a French author, high-school teacher and politician. He was a deputy mayor of Versailles and is now Member of the European Parliament and Vice President of The Republicans. Early life Françoi ...
, the European Parliament's rapporteur for the negotiations. In an opinion piece for The Telegraph, former MEP
Daniel Hannan Daniel John Hannan, Baron Hannan of Kingsclere (born 1 September 1971) is a British writer, journalist and former politician serving as an adviser to the Board of Trade since 2020. He is the founding president of the Initiative for Free Trade ...
wrote "the French want the UK to be treated like any other third country except with respect to their fishing waters, which they want to remain subject to the EU's Common Fisheries Policy". The UK by contrast sees the agreements as separate issues; the EU member states that are either landlocked or have only
Baltic Baltic may refer to: Peoples and languages * Baltic languages, a subfamily of Indo-European languages, including Lithuanian, Latvian and extinct Old Prussian *Balts (or Baltic peoples), ethnic groups speaking the Baltic languages and/or originati ...
, Black Sea or Mediterranean coasts may be more willing to compromise. Advocates for both sectors fear that their interests will be traded away for the benefit of the other. " stead of increasing their quotas severalfold, UK fishermen could be forced to make sacrifices to maintain the lifestyles of the UK's bankers and fund managers. It hardly seems fair, does it?" wrote ''
Prospect Prospect may refer to: General * Prospect (marketing), a marketing term describing a potential customer * Prospect (sports), any player whose rights are owned by a professional team, but who has yet to play a game for the team * Prospect (mining ...
''. Conversely, " rowing your most profitable industry to the wolves is apparently necessary to prove that you are Taking Back Control of an industry that you haven't really needed for centuries", a '' Forbes'' writer taking the city's side complained. "This is what passes for trade policy in U.K. government circles right now." "In Britain fish and finance are ultimately two sides of the same Brexit coin", the '' Financial Times'' observed at the beginning of 2020. "One the very expression of the desire to take back control, the other the seizing of borderless opportunity. Which one wins out will be a signal of the course the UK charts for its post-EU future."


Fishing

Andrew Goodwin, chief UK economist at consulting company Oxford Economics, specifically cited fishing as a potential stumbling block in negotiations. As an industry highlighted by the Leave campaign as having been adversely affected by the UK's EU membership, fishing has become a very emotional issue despite its minuscule size within the overall British economy. The entire industry, including processing and farming, amounts to 0.14 per cent of the UK's gross domestic product (GDP), with revenues of £1.4 billion a year. (less than the
Harrods Harrods Limited is a department store located on Brompton Road in Knightsbridge, London, England. It is currently owned by the state of Qatar via its sovereign wealth fund, the Qatar Investment Authority. The Harrods brand also applies to other ...
department store), and employs 24,000 people, less than 0.1 per cent of the British workforce. By comparison, the financial sector's £132 billion 2018 in revenue, including a £44 billion trade surplus, accounts for 6.9 per cent of the UK's GDP, contributing £29 billion in tax. The 1.1 million people employed in the field make up 3.1 per cent of the workforce. In mid-May, Barnier, formerly France's fisheries minister, said that the two sides had been able to start a dialogue, although they were far from any agreement. By July, it was reported that the EU was willing to concede to the UK's demand that fishing quotas be based on zonal attachment, or scientific data on where fish species are presently located, rather than the historically based relative stability approach long used by the EU to allocate quotas under the CFP; this would likely increase the amount of fish British fishermen could catch at the expense of the EU countries. Zonal attachment already governs the fishing relationship between the EU and Norway, and like that deal the UK wants to see quotas renegotiated annually. The EU for its part, citing the dependence of so many Western European fishing fleets on British waters, wants an agreement that can only be renegotiated if both sides agree it, good for 25 years. Norway's annual renegotiations are possible only because there are far fewer species of fish in its waters. In September 2019, with the 31 October deadline then looming, the UK and Norway signed an agreement allowing fishermen of both countries to continue fishing in each other's waters under the same terms that had been negotiated between Norway and the EU. A year later, the UK and Norway reached the former's first independent fisheries agreement in 40 years, which includes annual renegotiations of quotas. British officials cited these terms as a model for the EU, saying it showed respect for both nations' status as independent coastal states and calling the bloc's position "the aberration in international fisheries terms." The first attempt to negotiate an annual agreement between the two countries failed in April 2021, leaving British fishermen without access to Norwegian waters and their cod for that year. In
Hull Hull may refer to: Structures * Chassis, of an armored fighting vehicle * Fuselage, of an aircraft * Hull (botany), the outer covering of seeds * Hull (watercraft), the body or frame of a ship * Submarine hull Mathematics * Affine hull, in affi ...
, this meant that the factory trawler '' Kirkella'', the only distant-waters ship in the British fleet, estimated in previous years to provide one of every 12 cod or haddock fillets eaten in British chip shops, has had to avoid Norwegian waters, making only one trip during 2021 to the international waters in the Barents Sea near the
Svalbard Svalbard ( , ), also known as Spitsbergen, or Spitzbergen, is a Norwegian archipelago in the Arctic Ocean. North of mainland Europe, it is about midway between the northern coast of Norway and the North Pole. The islands of the group range ...
archipelago, spending nine weeks at sea instead of six to bring back lower-quality fish; it is currently in
dry dock A dry dock (sometimes drydock or dry-dock) is a narrow basin or vessel that can be flooded to allow a load to be floated in, then drained to allow that load to come to rest on a dry platform. Dry docks are used for the construction, maintenance, ...
in Norway and will not sail again until that country can negotiate a deal with the UK. The processing industry is doing well, but fish prices for chip shops are expected to increase later in the year once UK Fisheries, the ''Kirkella''s owner, runs out of the frozen fish it stockpiled before the pandemic and all fish must be imported until a new Norwegian deal is reached.
Rogers Rogers may refer to: Places Canada *Rogers Pass (British Columbia) *Rogers Island (Nunavut) United States * Rogers, Arkansas, a city * Rogers, alternate name of Muroc, California, a former settlement * Rogers, Indiana, an unincorporated community ...
, in his November 2019 lecture at Glasgow University, doubted that negotiations on fisheries would result in any significant change. " is very hard to see why the eight fishing member states will be prepared to see any losses as a result of Brexit in what is a pretty zero sum game sector", he said. "Their moment of maximum leverage on fish is next year, and they know it." Rogers believed that Johnson might try to spin whatever minor changes he is able to win as a radically different deal, but that might not placate the hardline Brexiteers who had chosen him as party leader after May stepped down. On the EU side, complaints that the CFP has impoverished British fishermen seem hollow against the necessity of balancing the interests of the two industries and both parties. "You could ask whether it's fair that the City of London gets access to all of Europe", says Daniel Fasquelle, a member of the French National Assembly for the
department Department may refer to: * Departmentalization, division of a larger organization into parts with specific responsibility Government and military *Department (administrative division), a geographical and administrative division within a country, ...
of
Pas-de-Calais Pas-de-Calais (, " strait of Calais"; pcd, Pas-Calés; also nl, Nauw van Kales) is a department in northern France named after the French designation of the Strait of Dover, which it borders. It has the most communes of all the departments ...
, where many French fishermen are based, in response to British complaints about the unfairness of the CFP. "The UK doesn't consume anywhere close to all the fish that's taken in its waters. They need access to our markets." In late September 2020, amid optimism about the possibility of yet reaching a deal by mid-October after the UK's government delayed final consideration of the Internal Markets Bill until the end of the year, negotiators from both sides suggested to '' The Telegraph'' that an agreement could be reached on fishing if both sides made the effort. It would in principle allow for an increase in the UK's quotas over time, although many details still had to be worked out. At the end of the month the UK, too, had offered a three-year transition period to phase in the lower EU quotas. Spokesmen for fishing interests on both sides insisted that their positions remained unchanged. "There is no expectation within the UK fishing industry that the UK will back down on fisheries", said Barrie Deas, head of the UK's National Federation of Fishing Organisations (NFFO). "If anything, the commitments that have been made to the industry are stronger now than when the negotiations started." A diplomat from a coastal EU state similarly said "We are not for a gradual withdrawal of quotas. We are for permanent quotas." On both sides, the fishing and finance issues were linked. "If everything should carry on in relation to fishing, why should it not carry on in relation to financial markets?" asked Sir Richard Packer, who after heading the UK's negotiating team during the original CFP talks served as
Permanent Secretary A permanent secretary (also known as a principal secretary) is the most senior Civil Service (United Kingdom), civil servant of a department or Ministry (government department), ministry charged with running the department or ministry's day-to-day ...
at the
Ministry of Agriculture, Fisheries and Food An agriculture ministry (also called an) agriculture department, agriculture board, agriculture council, or agriculture agency, or ministry of rural development) is a ministry charged with agriculture. The ministry is often headed by a minister f ...
for the rest of the 20th century. Mogens Schou, a Danish government fisheries official during the same period, likewise says "it is not a question of rights, but about negotiating a package on mutual interests in fishing, in trade relations and banking, and what you can put on the table." As October began, the ''Financial Times'' summarized the status of the talks on fishing as having led to "no meaningful progress" and that it would be "among the very last unsolved issues: a scenario Brussels had fought to avoid." Frost conceded that on fisheries, "the gap between us is unfortunately very large and, without further realism and flexibility from the EU, risks being impossible to bridge." European Commission president Ursula von der Leyen said all issues were "still completely open" and minimised the role of fishing in stalling the talks. During the next three months, a deal was on several occasions reported to be imminent, but by late December the negotiations had not been completed. Fishing was one of the several areas with outstanding issues with both sides sticking to their original positions. The EU were proposing to give up 18 per cent of its quotas in British waters over the next ten years, while the UK were proposing 60 per cent over three years. The UK also wanted its 12-mile zone to be reserved for British vessels. The UK also tabled a paper setting out requirements for British-flagged vessels fishing in British waters that were not exclusively British owned and crewed. In that case, a proportion of their catch from British waters had to be landed at British ports. In addition, the UK proposed that quotas for pelagic fish stocks such as herring, whiting and mackerel be left out of the agreement altogether and instead negotiated by an informal international forum including the Faroes, Greenland, Iceland, Norway and Russia.


Reactions to agreement

On 24 December, the UK and EU announced they had reached a deal. Its fishing provisions included a reduction in the EU's quotas in British waters to be phased in over the next five years, during three of which EU boats will continue to be allowed to fish in those inshore waters where they have been. Deas said that Johnson was "willing to sacrifice fishing" to get a deal and that the UK was entitled to even greater quotas than it had negotiated under international law. "I think there will be frustration and anger across the industry about that", he said. A spokesmen for Scottish salmon producers said that while the industry was glad a deal had been reached, there would be "lots more red tape, bureaucracy and paperwork" to deal with. Fishermen the ''
Daily Telegraph Daily or The Daily may refer to: Journalism * Daily newspaper, newspaper issued on five to seven day of most weeks * ''The Daily'' (podcast), a podcast by ''The New York Times'' * ''The Daily'' (News Corporation), a defunct US-based iPad new ...
'' spoke with echoed Deas. "It seems we have been totally sold down the river, and it's not the deal we envisaged or even wanted", said Richard Brewer, a sixth-generation Whitby fisherman who runs a trawler with his sons. Scotsman Aaron Brown, a cofounder of Fishing for Leave, said that Johnson had "bottled it", and fishing should never have been made part of overall trade negotiations to begin with. "The EU has essentially got what it wanted. Everybody knows how Brussels works." The SFF also called the agreement "hugely disappointing". In a measured statement, the organisation's chief executive, Elspeth Fitzgerald, said that while the SFF had not yet read the full document, and was waiting for specifics from the government on the effect on particular species, "the principles that the Government said it supported—control over access, quota shares based on zonal attachment, annual negotiations—do not appear to be central to the agreement." English fishermen in Newlyn, near Land's End, one of the country's largest ports, were similarly dismissive. "We had the opportunity to actually take back control and we've passed it up", said one. He and others were particularly angry that EU vessels would be able to fish inshore waters for several more years. It was the "most galling kick in the teeth for us", said another, who likened Johnson's betrayal of the industry to Heath's, but worse. In mid-January 2021, Victoria Prentis, then Parliamentary Undersecretary for Agriculture, Fisheries and Food, told the environment subcommittee of the House of Lords' European Union Committee that she had not been able to read the agreement when it had been announced as it was
Christmas Eve Christmas Eve is the evening or entire day before Christmas Day, the festival commemorating the birth of Jesus. Christmas Day is observed around the world, and Christmas Eve is widely observed as a full or partial holiday in anticipation ...
and she was busy organising the local nativity trail with her husband.
Scottish National Party The Scottish National Party (SNP; sco, Scots National Pairty, gd, Pàrtaidh Nàiseanta na h-Alba ) is a Scottish nationalist and social democratic political party in Scotland. The SNP supports and campaigns for Scottish independence from ...
Brexit spokeswoman
Philippa Whitford Dr Philippa Whitford (born 24 December 1958) is a Scottish National Party (SNP) politician and a breast surgeon. She was first elected as the Member of Parliament (MP) for Central Ayrshire in May 2015 and was re-elected in 2017 and 2019. She ...
called for Prentis's resignation, but the government maintained its full confidence in her. Fishing interests in the Republic of Ireland, a member of the EU, expressed concerns.
Charlie McConalogue Charlie McConalogue (born 29 October 1977) is an Irish Fianna Fáil politician who has served as Minister for Agriculture, Food and the Marine since September 2020. He has been a Teachta Dála (TD) for the Donegal constituency since the 2016 g ...
, the country's Minister for Agriculture, Food and the Marine, complained at the end of January, in advance of a March meeting to set quotas for the rest of the year, that the agreement had disproportionately affected the republic, with the country's quota losses coming to twice that of any other EU member state, estimated by his government at €43 million. Sean O'Donoghue, head of the Killybegs Fishermen's Organisation, the republic's largest fishing lobby group, believes it is closer to €188 million. He was particularly upset that the UK has been asserting sovereignty over the waters around the uninhabitable islet of
Rockall Rockall () is an uninhabitable granite islet situated in the North Atlantic Ocean. The United Kingdom claims that Rockall lies within its exclusive economic zone (EEZ) and is part of its territory, but this claim is not recognised by Ireland. ...
, 200 miles west of the
Outer Hebrides The Outer Hebrides () or Western Isles ( gd, Na h-Eileanan Siar or or ("islands of the strangers"); sco, Waster Isles), sometimes known as the Long Isle/Long Island ( gd, An t-Eilean Fada, links=no), is an island chain off the west coast ...
, waters rich in
mackerel Mackerel is a common name applied to a number of different species of pelagic fish, mostly from the family Scombridae. They are found in both temperate and tropical seas, mostly living along the coast or offshore in the oceanic environment. ...
, the republic's most exported species, that largely mate and spawn in the republic's waters.


Finance

While it is believed that the UK has the advantage on fish, since after Brexit it will have the absolute right to restrict access to the waters around Great Britain and Northern Ireland, the EU could regain the "maximum leverage"
Ivan Rogers Sir Mark Ivan Rogers (born March 1960) is a former senior British civil servant who was the Permanent Representative of the United Kingdom to the European Union from 4 November 2013 until his resignation on 3 January 2017. Education Rogers ...
spoke of with pressure on the financial sector. The City seeks the
stock market equivalence Stock market equivalence is granted by the European Union to those countries whose stock markets are deemed to be 'equivalent' to those of the EU countries. On 3 January 2018, the EU implemented the " Markets in Financial Instruments Directive II" ...
required by the EU's Markets in Financial Instruments Directive 2004 (MiFid), under which shares of EU companies may be traded on foreign exchanges if their regulations are deemed to offer the same amount of investor protection as the EU's. Currently only the US, Australian and Hong Kong exchanges have that equivalence Early in the Brexit process the UK allowed all EU firms access on the current terms through 2023, after which they may apply for continued access under terms yet to be defined. The European Securities and Markets Authority (ESMA), the EU's financial regulatory body, is monitoring how the UK applies EU rules to its financial markets during the 2020 transition period as part of its equivalence determination; in July the EU granted temporary equivalence, starting in January 2021, to
central counterparty clearing A central clearing counterparty (CCP), also referred to as a central counterparty, is a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreig ...
houses located in the UK. Since British financial law and regulations are currently aligned with the EU's, which were drafted in part by British regulators, as a result of the country's years of membership, the city could easily gain equivalence by leaving them unchanged. Johnson has promised, however, that the UK will not be a "rule taker" after Brexit, meaning the UK will write its financial rules with its own interests in mind rather than simply adopt the EU's as its own, which would likely lower the chances of equivalence being granted so readily, if at all. By the originally agreed deadline of 30 June for mutual equivalence determinations, the UK had only returned four of the 28 questionnaires about its regulatory regime sent it by the EU. Even if granted, equivalence may be a means for the EU to pressure the UK. Stock exchanges in
Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
, a non-EU member landlocked country almost surrounded by the EU, were granted temporary equivalence at the end of 2017. In the midst of broader trade negotiations between the two, the EU let the equivalence expire in at the end of June 2019. Swiss authorities responded to the loss of permission for EU companies to trade their shares on Swiss exchanges by reciprocally banning EU exchanges from listing the shares of Swiss companies. A year later, equivalence had not been restored, but ESMA issued a report on MiFid calling for a simplification of transparency requirements, a proposal seen as loosening EU regulations in a way that would make it easier for investors within the trade bloc to trade directly on exchanges outside the EU, possibly in the process making British equivalence more likely. Still, fears persist that the EU will "weaponise" equivalence. "Are you going to be comfortable with building a business model on that?" asks one British banking official. Swiss banks and other financial services firms have been increasingly moving services to Frankfurt and Madrid to eliminate this uncertainty. Even if granted without reservation, equivalence may not be enough. "The big problem with equivalence (known about for years) is that it's entirely inferior to the U.K.'s current privileges as an EU member" writes ''Bloomberg'' columnist Lionel Laurent. "It's available only for some parts of the finance industry such as securities trading, but not for wholesale and retail banking. Retail investment funds, payments and insurance brokers are excluded too." With negotiations still ongoing in July 2020, the UK and Switzerland opened up their own negotiations on a joint financial services agreement, after the UK found Swiss stock market regulation to be equivalent to its own a year to the day after the EU let its own determination expire. The two nations will begin talks in September and assess where they are at the beginning of 2021.
Chancellor of the Exchequer The chancellor of the Exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and head of His Majesty's Treasury. As one of the four Great Offices of State, the Chancellor is ...
Rishi Sunak Rishi Sunak (; born 12 May 1980) is a British politician who has served as Prime Minister of the United Kingdom and Leader of the Conservative Party (UK), Leader of the Conservative Party since October 2022. He previously held two Cabinet of ...
described the agreement as demonstrating that different sets of regulations do not have be exactly the same as each other to achieve equivalence, respecting different countries' traditions and sovereignty. Leave supporters may not find the Swiss relationship with the EU, which they often cite as a model, to be the clean break they were expecting, Rogers warned in his speech. " witzerland... lives in a near-constant negotiation with the EU. So will we. Even if we go 'no deal'. Maybe it's time to tell the public that?" Around the same time French historian Joseph de Weck, a former Swiss trade negotiator, said in an opinion piece in '' EURACTIV'' that Switzerland has effectively become a "rule taker", with the country's businesses routinely lobbying their government to "simply copy-paste EU laws—be it regulations on chemical products or data protection rules." Dutch journalist Caroline de Gruyter warned of this phenomenon, which she reports is called the "fax economy" by Norwegians who have similarly seen their government adopt EU rules with minimal amendment, a year before the Brexit vote. She observes that this process, which she attributes to globalisation as pressure from the US has contributed to it as much as that from the EU, has contributed to a decline in civic involvement, particularly voter turnout, as Switzerland becomes more and more governed under rules it has no voice in writing, with only the right-wing nationalist
Swiss People's Party The Swiss People's Party (german: Schweizerische Volkspartei, SVP; rm, Partida populara Svizra, PPS), also known as the Democratic Union of the Centre (french: Union démocratique du centre, UDC; it, Unione Democratica di Centro, UDC), is a nati ...
gaining at the ballot box. "It doesn't matter how we vote", a local official in the country complained to De Gruyter. "Every year, we get more EU regulation via the back door." By mid-October, the consensus in the British financial industry was that the government had chosen fishing. The city's general support for Remain during the referendum campaign "did not endear it to the Brexiteers who now run Britain", '' The Economist'' reported, "and who know that there are more votes in protecting fishermen than moneymen." Miles Celic, head of
TheCityUK TheCityUK is a private-sector membership body and industry advocacy group promoting the financial services, financial and related professional services industry of the United Kingdom (UK). TheCityUK is often referred to as the industry's "most po ...
, which lobbies for the industry, said the government sees the city as "big and tough enough to look after itself." Philip Aldrick, economic editor of '' The Times'', complained in an opinion column that the government had betrayed the British financial sector. "Brussels has walked over us and, frankly, the government no longer cares. What matters is fishing ... to deliver a semblance of sovereignty", he wrote. He conceded that some deal might yet happen at the last minute, but whatever it was would not include finance: "That issue is concluded and should be seen as a stain on the government's record." Aldrick allowed that the complete absence of EU regulations, particularly the required leverage ratio, would be beneficial as it would lower costs for smaller banks, make larger ones more resilient and simplify monetary policy. At the end of November, with the deadline for an agreement looming, ESMA announced that all euro-denominated
derivatives The derivative of a function is the rate of change of the function's output relative to its input value. Derivative may also refer to: In mathematics and economics * Brzozowski derivative in the theory of formal languages * Formal derivative, an ...
trading would have to take place either within the EU or on an equivalent market such as the US, Australia or Hong Kong once 2021 begins. Since London had become the most popular derivatives market in the world, this was seen a "hardball" move by the EU as parties to transactions will have to choose between executing the trade in the UK or the EU, fragmenting liquidity assuming the trade was even possible. " is is the EU telling the UK—this is your mess, you can sort it out" said an Ashurst lawyer who follows regulation. ESMA also indicated it might review the "delegation" rules that allow investment funds domiciled in low-tax jurisdictions within the EU such as Ireland or Luxembourg to be managed from outside the EU as long as those markets have equivalence determinations. Currently, £2.1 trillion, nearly a quarter of the assets managed by British banks, are domiciled in the EU. "If you can prise much of that industry away from London then you really start to tip the balance of power", observes the head of international services at Bank of America. When the UK and the EU reached their agreement before Christmas, it had little for finance. Johnson said it "perhaps does not go as far as we would like" for the city. The two sides agreed to continue negotiations on finance, setting March as their deadline for a memorandum of understanding (MOU). At the end of March the two sides announced that they had reached a framework for negotiating the MOU and that negotiations would continue. The British financial sector welcomed the development but remained restive, as jobs and assets continued to be moved from the city to various locations in the EU. The bloc had decided to allow individual states to decide the equivalence question; some such as Italy had granted it but others like the Netherlands had not. "Politicians protected the fish, but sold us bankers down the river", one
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
banker complained.


Possible consequences of failure to reach agreement

In June, Frost described the EU's position on fisheries as "manifestly unbalanced." A month later, it was reported that the UK government expected to miss the 31 July deadline and was preparing to continue trading with the EU under World Trade Organization (WTO) rules in 2021 if no agreement was reached. Germany, at the time holding the EU's rotating presidency, called on the UK to be "more realistic" in its negotiating positions, following a presentation to member states by Barnier on the status of the talks. This was seen as a setback to the UK's government, which had hoped Germany, and perhaps Italy, with less stake in the fisheries issue, would be able to persuade the French and the other seven fishing states to back down. Barnier believed that an agreement would need to be reached no later than October to allow enough time for ratification by the UK and EU members by the end of the year. The UK's Environment Secretary, George Eustice, told the media in early July that he did not think any deal could be finalised until December By mid-August, "the contours of a compromise" were reportedly emerging, but it was still seen as likely that any deal would come near the end of the transition period, as it eventually did.


Effects on fishing

Should a deal not be reached or in effect by 2021, all trade between the EU and UK will revert to WTO terms until or unless an agreement is reached. British waters will, under UNCLOS, be exclusively the UK's to govern as it chooses, as an independent coastal state. The CFP would no longer apply. Both developments would, or are seen as likely to be, a significant impact on fishing.


Tariffs and customs inspections

Under WTO rules, all fish products exported to the EU would be assessed a 9.6 per cent tariff, and under EU law they would be subject to additional customs procedures as well as regular sanitary and phytosanitary measures they are currently exempt from outside spot checks. A retired Scottish fishing boat captain, John Buchan, says these checks will have a more adverse effect on the market value of British langoustine than any tariffs. "I've heard it said that premium products like top quality Scottish langoustine will find its way to market because of demand." he told ''
The Press and Journal ''The Press and Journal'' is a daily regional newspaper serving northern and highland Scotland including the cities of Aberdeen and Inverness. Established in 1747, it is Scotland's oldest daily newspaper, and one of the longest-running newspape ...
''. "The problem is that it won't be prime quality if it's had to sit several days in a lorry at Calais, or in a customs warehouse, waiting to be cleared." Delays caused by the sanitary and phytosanitary checks may be further extended by limited capacity in France: the EU-designated Border Inspection Post on French side of the Channel where those checks can be undertaken is not in Calais but
Dunkirk Dunkirk (french: Dunkerque ; vls, label=French Flemish, Duunkerke; nl, Duinkerke(n) ; , ;) is a commune in the department of Nord in northern France. and it is only open a for a few hours every weekday. The EU's current tariff on cod imports from countries with most favoured nation (MFN) status is even higher, at 12 per cent. Some sectors of the British fishing industry have already calculated the economic impact of those tariffs. The Scottish Seafood Association (SSA) has estimated an added cost of £160 per transaction, or £34 million per year to the entire Scottish fishing industry, an amount its president told the
Scottish National Party The Scottish National Party (SNP; sco, Scots National Pairty, gd, Pàrtaidh Nàiseanta na h-Alba ) is a Scottish nationalist and social democratic political party in Scotland. The SNP supports and campaigns for Scottish independence from ...
's 2019 conference would be "catastrophic". Smoked salmon, raised on Scottish fish farms and very popular in the EU, which annually consumes £250 million (half the total exported) of the UK's biggest food export, faces an EU MFN tariff of 13 per cent. Shellfishermen, whose catch has never been subject to CFP restrictions and is heavily exported to the EU, have estimated a £41 million cost to their sector. The Falkland Islands, from the British Isles, have come to prosper from exports of
squid True squid are molluscs with an elongated soft body, large eyes, eight arms, and two tentacles in the superorder Decapodiformes, though many other molluscs within the broader Neocoleoidea are also called squid despite not strictly fitting t ...
to Spain, which takes 82 per cent of its annual catch for calamari, and would be adversely affected by higher tariffs. After the
EU–UK Trade and Cooperation Agreement The EU–UK Trade and Cooperation Agreement (TCA) is a free trade agreement signed on 30 December 2020, between the European Union (EU), the European Atomic Energy Community (Euratom), and the United Kingdom (UK). It provisionally applied from ...
was adopted in January 2021, and with the travel and business restrictions in response to the new Covid variant which was spreading fast in the UK from mid-December, Scottish inshore fishermen saw some of these fears become reality. Exporting fish to France became a 25-step process, and shipments lost value either partially or completely, putting some companies in danger of
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
due to delays when paperwork didn't completely agree, a situation SSA head Jimmy Buchan called "red tape gone crazy". By the middle of January the Scottish government estimated that the new controls had cost the fishing industry £7 billion. The UK government said many of the problems were caused by Covid cross-border travel restrictions and that there was no longer a market for fish in France due to the closure of fish restaurants as a result of Covid measures being taken there. In March the Office of National Statistics reported that British seafood and shellfish exports to the EU had dropped 83 per cent during January, the most of any foodstuffs category. In response to a request for a debate on the effects of Brexit on Scottish fishing from
Scottish National Party The Scottish National Party (SNP; sco, Scots National Pairty, gd, Pàrtaidh Nàiseanta na h-Alba ) is a Scottish nationalist and social democratic political party in Scotland. The SNP supports and campaigns for Scottish independence from ...
Commons leader
Tommy Sheppard Thomas or Tommy Sheppard may refer to: * Thomas Sheppard (cricketer) (1873–1954), English cricketer * Thomas Sheppard (MP) (1766–1858), Whig (and then Conservative) Member of Parliament (MP) for Frome *Sir Thomas Sheppard, 1st Baronet (died 182 ...
, Jacob Rees-Mogg, Leader of the House, defended the government. "The key thing is we've got our fish back", he said. "They're now British fish and they're better and happier fish for it."


Exclusion from territorial waters

The costs and delays likely to arise from increased tariffs and the reimposition of customs procedures might be compounded if the UK and/or EU exclude boats from the other side from their waters, as they will have the legal right to if there is no deal in January, possibly in retaliation for those actions. If the UK bars all EU boats from its EEZ, the EU could see immediate and serious effects due to its great dependence on them. Processing plants as far away as the island of Rügen off the northeastern German Baltic coast, in Merkel's Bundestag
constituency An electoral district, also known as an election district, legislative district, voting district, constituency, riding, ward, division, or (election) precinct is a subdivision of a larger State (polity), state (a country, administrative region, ...
, depend on daily deliveries of herring freshly caught off the Shetlands by Danish trawlers. In France, even ships that source less than a third of their catch from British waters could face bankruptcy; at Boulogne-sur-Mer on the English Channel opposite
Dover Dover () is a town and major ferry port in Kent, South East England. It faces France across the Strait of Dover, the narrowest part of the English Channel at from Cap Gris Nez in France. It lies south-east of Canterbury and east of Maidstone ...
, France's largest fishing port, half of the fish landed are caught in British waters. Hubert Carré, director general of the Comité National des Pêches Maritimes et des Élevages Marins, a French fishing organisation, estimated in 2017 that half of all French fishermen could go bankrupt if excluded from British waters, with the remainder seeing a 15 per cent loss in wages. Belgian fishermen, with the EU's smallest fleet by total vessels, would lose about half their catch; a fishing organisation spokesman there says that while the country's fleet would probably fish elsewhere in the North Sea at first, it would not be able to make up the difference that way. Spanish fishermen would be less affected due to their ownership interests in British boats predating their country's accession to the EU. Fishermen of the Republic of Ireland in particular fear what might happen should they, as an EU state, find they can no longer fish in UK waters, where they currently land 34 per cent of their total catch, including 64 per cent of their mackerel and 43 per cent of the prawns they take, the largest two species in the catch; in the short run the loss of access to British waters would under one estimate make half the Republic of Ireland's fishing industry, already feeling pressure from British competitors who have been able to significantly reduce their costs, superfluous. In the long run, EU ships may turn to the Republic of Ireland's waters, equally as rich as the UK's, to make up for the losses, and between their greater numbers and larger quotas under the CFP Irish fishermen fear serious depletion of stocks may soon result.
Michael Creed Michael Creed (born 29 June 1963) is an Irish Fine Gael politician who has been a Teachta Dála (TD) for the Cork North-West constituency since 2007, and previously from 1989 to 2002. He previously served as Minister for Agriculture, Food and ...
, the Republic of Ireland's fisheries minister until June, says it would be "calamitous" for the country's fishermen if they are unable to preserve their fishing rights in British waters as part of any Brexit deal. Which waters are in Northern Ireland and thus the UK's, and which are the Republic of Ireland's, is also a potential point of dispute. The border between Northern Ireland and the Republic of Ireland meets the sea at two navigable inlets,
Lough Foyle Lough Foyle, sometimes Loch Foyle ( or "loch of the lip"), is the estuary of the River Foyle, on the north coast of Ireland. It lies between County Londonderry in Northern Ireland and County Donegal in the Republic of Ireland. Sovereignty over ...
in the northwest and
Carlingford Lough Carlingford Lough (, Ulster Scots: ''Carlinford Loch'') is a glacial fjord or sea inlet in northeastern Ireland, forming part of the border between Northern Ireland to the north and the Republic of Ireland to the south. On its northern shore i ...
in the east, both of which are fished by boats from both nations. In the century since Irish independence, the two states have not negotiated, much less agreed, where in those waters their border lies. "Can you imagine telling fishermen from Greencastle that they can no longer fish outside their back door?" asks O'Donoghue, alluding to an Irish port in County Donegal at the mouth of Lough Foyle, a half-mile (800 m) across the water from British
Magilligan Point Magilligan () is a peninsula that lies in the northwest of County Londonderry, Northern Ireland, at the entrance to Lough Foyle, within Causeway Coast and Glens district. It is an extensive coastal site, part British army firing range, par ...
. Both the EU and the UK have anticipated the possible adverse economic effects of a no-deal final Brexit on their fishing industries. Early in 2019,
Karmenu Vella Karmenu Vella is a Maltese politician and former member of the European Commission, in charge of Environment, Maritime Affairs and Fisheries between 2014 and 2019. He has been one of the longest serving Maltese Parliamentarian with the Maltese ...
, European Commissioner for the Environment, Marine Affairs and Fisheries, said that if the UK were to exclude EU fishing boats from its waters, there would be "significant negative economic consequences on the part of the EU fleet". The Commission would authorise member states to set up compensation programmes in that event. In November, it was reported that the British government had contracted with consulting company
Equiniti Equiniti Group is a United Kingdom, British-based outsourcing business focused on financial and administration services. History The business has its origins in the stock transfer agent, share registration business of Lloyds Bank, Lloyds TSB w ...
to develop a system for compensating fishermen for losses they should suffer in the event of no deal.


Legal challenges

EU fishermen may avoid those effects if they are encouraged by their governments to continue to fish in British waters even if told they are not permitted to do so in the absence of an agreement with the UK. They may even do so on their own initiative, out of economic need. "No one knows what's going to happen," a French captain on the Channel told '' Bloomberg News'' in February 2019, when a no-deal Brexit seemed imminent the following month. "All we know is that the fish don't care about the border and there's not enough space on the French side." A month earlier French agriculture minister
Didier Guillaume Didier Guillaume (born 11 May 1959) is a French politician who served as Minister of Agriculture and Food in the government of Prime Minister Édouard Philippe from 2018 to 2020. A member of the Socialist Party until 2018, he was President of the ...
had promised that no-deal would not change things. "There is no circumstance in which ... Boris Johnson could prevent French fishermen from fishing in British waters." While UNCLOS emphasises the importance of international agreements in allocating fishing rights, it also allows nations to stake claims to others' fisheries on the basis of "custom and practice", which French and Dutch fishermen have cited as existing for them long before the EU was even founded. They would also be able to justify fishing in UK waters on the grounds that there is a surplus of fish there, since the British fleet could not harvest, nor the British public consume, most of the catch from British waters, by themselves. The dispute could possibly be taken to the international Law of the Sea court in Hamburg. Before the Brexit vote, in 2016, former UK fisheries minister
Ben Bradshaw Benjamin Peter James Bradshaw (born 30 August 1960) is a British politician who served as Secretary of State for Culture, Media and Sport from 2009 to 2010. A member of the Labour Party, he has been Member of Parliament (MP) for Exeter since 1 ...
had warned that political resistance to any closure of British waters was to be expected. "The idea that if we voted to leave the EU, our neighbours Ireland, the Netherlands, Belgium, Germany, France and others would simply fall over and allow us to impose a 200-mile limit is for the birds.", he said in response to Eustice having argued that it could be done. By the next year Danish fishermen were preparing a legal challenge to any post-Brexit exclusion from British waters along historical lines, arguing that they have been allowed to fish uninterrupted there since the 15th century.
Anders Samuelsen Anders Samuelsen (born 1 August 1967 in Horsens, Denmark) is a Danish former politician who served as the Minister of Foreign Affairs from 2016 to 2019, member of the Folketing from 2007 to 2011 and as leader of the Liberal Alliance party from 20 ...
, then Denmark's
foreign minister A foreign affairs minister or minister of foreign affairs (less commonly minister for foreign affairs) is generally a cabinet minister in charge of a state's foreign policy and relations. The formal title of the top official varies between cou ...
, said that many small communities along the west coast of Jutland were economically dependent on the country's fishing fleet having continued access to the UK's EEZ, from which it takes 40 per cent of its annual catch. "The British claim of getting back your waters is nonsense, because you never had them", said Niels Wachmann, head of the Danish fishermen's association. "Maybe for oil or gas but not for fish." University of Hull law professor Richard Barnes agrees, writing that UNCLOS only grants states stewardship, not outright ownership, of their EEZs, and thus some form of shared fisheries management, including access to each other's waters, will be likely. In a published opinion for the SFF, Robin Churchill. emeritus professor of international law at Dundee Law School, does not think arguments for historical fishing rights to any surplus catch in the UK EEZ by EU states based on the CFP would prevail. To demonstrate that those rights exist, the states claiming them must demonstrate that the state in whose waters they claim the rights formally acquiesced in the past to those rights. The UK itself never acquiesced as a state, he argues, rather the EU imposed the policies on its member states who had no authority to opt out, so the CFP could not have created historic fishing rights for the other EU states. Nor does Churchill think the EU could claim those rights under UNCLOS on the basis of landlocked or "geographically disadvantaged" states among its membership. None of the landlocked EU member states are near the continent's northwestern coast, and all of the states on that coasts have EEZs of their own and thus cannot be considered disadvantaged. He likens such a claim on the EU's part to the hypothetical scenario of the US claiming a similar right to any surplus from Canada's EEZ on the grounds that some US states close to Canada are landlocked. Lastly, he rejects any argument that the EU is dependent on the UK's EEZ to feed its population since its own data, from 2016, show that it imports 55 per cent of the seafood it consumes from non-member states, and seafood only accounts for, on average, 7 per cent of protein consumed in the EU. The UK would thus have to physically prevent foreign boats from entering its EEZ, at three times the country's land area, if it means to keep its word to take back control of its fishing waters as an independent coastal state. In order to do so, nine ships were added to the Royal Navy's
Fishery Protection Squadron The Overseas Patrol Squadron (known as the Fishery Protection Squadron until 2020) is a front-line Squadron (naval), squadron of the Royal Navy with responsibility for patrolling the UK's Extended Fisheries Zone, both at home and around British Ov ...
(FPS) in 2019, with an additional four joining them the following May. Two surveillance aircraft, and 35 additional enforcement officers, are also part of the package, and 22 more ships are on standby. The goal is to triple the squadron's size before its services may be needed. In mid-December 2020, the UK had four of the vessels on standby to protect its waters. The Royal Navy has always routinely enforced both UK and European fishing laws throughout the year. Tobias Ellwood, chair of the
Defence Select Committee The Defence Select Committee is one of the Select Committees of the House of Commons of the United Kingdom, having been established in 1979. It examines the expenditure, administration, and policy of the Ministry of Defence and its associated pub ...
in the Commons, disagreed with any potential threat of increased use of the navy, saying "We're just facing the prospect of ... our overstretched Royal Navy squaring up to a close NATO ally over fishing vessel rights,". "Our adversaries must be really enjoying this." While the vessels are armed, they would not be expected to fire on EU fishing boats; in extreme cases, if one refused to leave British waters, the naval vessels would run alongside and board them, then take the confiscated ship to the nearest British port. Chris Parry, a former admiral and MMO chair, advocated for doing just that to set an example. "Once you had impounded them, the others would not be so keen to transgress without insurance." In May 2021, the government dispatched two River-class FPS vessels, HMS ''Severn'' and HMS ''Tamar'', to Jersey in advance of a planned blockade by French fishermen in protest over new UK fishing regulations.


Illegal fishing and overfishing

The Navy may not be able to stop all EU attempts to fish British waters, and between that and the failure of the UK to pass a new law regulating its fisheries after the end of the transition period, the environmental group Oceana fears "anarchy at sea". In the absence of an agreement, neither the UK nor the EU will be able to access the others' vessel monitoring system (VMS) data, a weakness unscrupulous fishermen could easily exploit. The
illegal, unreported and unregulated fishing Illegal, unreported and unregulated fishing (IUU) is an issue around the world. Fishing industry observers believe IUU occurs in most fisheries, and accounts for up to 30% of total catches in some important fisheries. Illegal fishing takes pl ...
(IUU) that would result, Oceana says, will likely lead to overfishing. Researchers at the University of Strathclyde warn that overfishing resulting from a failure to reach an agreement could seriously deplete prized fish stocks, which had rebounded under the CFP, within a few years. They ran mathematical models of two scenarios, one in which both the UK and EU increase their quotas in British waters, and another in which EU boats are barred from UK waters entirely. The former held a high risk of cod and herring falling to unsustainable levels within five years; in the latter less so, although stocks would decline. Seabird and whale populations would also decline due to food shortages. Researchers at the New Economics Foundation (NEF) similarly found that during periods such as the Mackerel Wars when at least one state party to a joint international fishing agreement in the Northeast Atlantic had unilaterally raised quotas after negotiations broke down, catches of the affected species quickly rose to levels far above those scientifically determined to be sustainable and remained there for several years.


Violence and civil unrest

"Anarchy at sea" might not be limited to the IUU Oceana fears. The 2018 flare-up of the "
Scallop War The English Channel scallop fishing dispute, also called the Great Scallop War or guerre de la coquille, occurred on 10 October 2012 or 8 October 2012, between British and French fishermen in the Channel off the coast of Le Havre, France. Th ...
" between English and French fishermen in the Channel suggests that fishermen are willing to take direct action and use force against their foreign competitors if they do not believe their governments are willing or able to enforce the law. Stéphane Pinto, head of the
Hauts-de-France Hauts-de-France (; pcd, Heuts-d'Franche; , also ''Upper France'') is the northernmost Regions of France, region of France, created by the territorial reform of French regions in 2014, from a merger of Nord-Pas-de-Calais and Picardy. Its Prefectu ...
fishermen's committee, who takes three-quarters of his catch from British waters, warned in October 2020 of violence at sea if no deal is reached by the end of the year. "They can't just click their fingers and say we can't fish in British waters any more." Some Irish shellfishermen believe violence has already occurred. After the 29 March 2019 deadline initially set for Brexit passed, they returned to an inshore area off the Scottish coast, where as a neighbouring nation they had the right to fish under the CFP that they otherwise would not. They found that 400 of their crab pots had already been harvested, and the eye, through which crabs enter and are trapped, cut from the rest, rendering them useless. Michael Cavanagh, president of the Killybegs Fishermen's Organisation, believes clashes after any closure of UK waters to EU fishermen could result in fatalities. If the UK bars EU boats from its EEZ, observers on both sides expect that clashes will occur on land as well. Spokesmen for French fishing organisations have threatened blockades of British-landed fish. French president
Emmanuel Macron Emmanuel Macron (; born 21 December 1977) is a French politician who has served as President of France since 2017. ''Ex officio'', he is also one of the two Co-Princes of Andorra. Prior to his presidency, Macron served as Minister of Econ ...
, who has been accused by the British of putting his political future ahead of agreeing a trade deal with the UK, has reportedly warned the leaders of the other EU nations of the likelihood of protests in this circumstance, NFFO head Deas is resigned to the certainty of protests. "French fishermen have done it for much less" he told '' The Guardian'' in February 2020. "I would imagine there will be disruption." Spokesmen for Deas's Irish counterparts agreed that French fishermen were likely to start blockading ports rapidly if the UK closed off its side of the Channel to them. If that situation were to persist, such protests could spread up the North Sea coast to Rotterdam. Of great concern to them was that most Irish fishermen ship their catch overland through the UK to France, and they feared that angry French, Belgian and Dutch fishermen might not distinguish between British and Irish shippers. Were that to happen, Irish fishermen would likely take to blocking their country's ports to British fish as well. "And there will be no point having a blockade in Killybegs" said Cavanagh. "It will be in Dublin because this is about bread and butter." In June 2021 one hundred Irish trawlers from all over the country sailed up the River Liffey into Dublin, joined by a thousand protesters in the street, all marching on the Dáil's temporary quarters at the Convention Centre, angry over the loss of 15 per cent, or roughly €43 million, of Ireland's fishing quota to the UK under the deal, twice as large a share of quota relative to the national catch as France conceded. The loss of quota to the UK was particularly acute in mackerel, where Ireland's share will go down by a quarter, and in prawns, with a 14 per cent reduction. The fishermen's anger at their government and the EU were exacerbated by a new rule from the latter that their catch must henceforth be weighed at the pier rather than processing plants, meaning that they will have to re-ice the fish afterwards, an additional expense. In April 2021, French fishermen, angry about a British requirement that they submit
GPS The Global Positioning System (GPS), originally Navstar GPS, is a Radionavigation-satellite service, satellite-based radionavigation system owned by the United States government and operated by the United States Space Force. It is one of t ...
data demonstrating that they had been fishing in British waters regularly between 2012 and 2016 in order to be granted a licence to do so after Brexit, began blockading shipments of fish caught in British waters landed in Boulogne-sur-Mer, where only 22 of 120 local boats had been issued licences. "You want to keep your waters?" their signs asked. "Then keep your fish!" The head of the local fishing cooperative said his members had expected the licences to be granted within days of their applications back in January. The EU approved a €100 million outlay by the French government to compensate fishing boats and fishmongers delayed by the implementation of new British rules.


=Jersey dispute

= Early in May, after a four-month grace period during which French fishermen could fish Jersey under the EU rules ended, those fishermen claimed the new permits Jersey was issuing after they had proved they had historically fished there came with restrictions on the days they could fish and the equipment they could use that would make it unprofitable for them to fish there. Annick Girardin, France's Minister of the Sea, called this "completely unacceptable" and said the country's government should consider switching off the island's electricity, most of which is generated in France. Her colleague
Clément Beaune Clément Beaune (born 14 August 1981) is a French public servant and politician who has been serving as the Secretary of State for European affairs in the governments of Prime Ministers Jean Castex and Élisabeth Borne between 2020 and 2022. B ...
, Secretary of State for European Affairs, has also threatened to obstruct efforts by British banks and financial companies to do business in the EU over the fishing impasse; British officials later claimed that their French counterparts had successfully pressured the EU to link fishing and finance. "The anger is roaring and the desire to do battle is palpable," among affected fishermen, said French Assemblyman Bertrand Sorre, who represents the department of Manche in coastal Normandy near Jersey. A blockade of the island by a hundred French fishing boats was planned for 6 May. While its organiser said the fishermen would not actually try to prevent landings at the port of
St. Helier St Helier (; Jèrriais: ; french: Saint-Hélier) is one of the twelve parishes of Jersey, the largest of the Channel Islands in the English Channel. St Helier has a population of 35,822 – over one-third of the total population of Jersey – ...
, the British government has dispatched
River-class patrol vessels River class may refer to: Destroyers * , ships of the Royal Navy built in the early 20th century that served in World War I * , ships of the Royal Canadian Navy that served in World War II * , frigates built for the Royal Australian Navy post Worl ...
HMS ''Severn'' and HMS ''Tamar'' to Jersey. French vessels were also sent to the island's waters; ultimately about 60 French trawlers showed up and made noise and shot off flares. Jersey's fishermen said that French fishermen were still preventing them from unloading their catches at Granville and other French ports where they have long done so. In the wake of the showdown, commentators disparaged the idea that fish for finance could work for either sector, much less Britain . "Neither sector benefits from the inherently antagonistic relationship that Brexit has baked into the politics around it" observed ''Financial Times'' columnist Helen Thomas. It was possible the distrust between the two sides on financial matters could fade with time, she allowed, but " e collection of French fishing boats, Royal Navy ships and French military vessels in the waters off Jersey tells you how likely that is ever to be the case in fishing." Nick Collier, the City of London Corporation's managing director, said it was "too late" for a fish for finance deal to be reached.


Possible benefits to UK

In October 2016, four months after Brexit referendum, then- Secretary of State for Environment, Food and Rural Affairs George Eustice told '' The Telegraph'' that British fishermen would be able to catch more fish, an amount the newspaper characterised as "hundreds of thousands of tonnes", after Brexit, through the balancing of quotas considered unfair to the UK. an amount later described as a "bonanza". Pressed on this at a House of Commons hearing on the status of Brexit five months later by
Neil Parish Neil Quentin Gordon Parish (born 26 May 1956) is a British farmer and former politician who served as Member of Parliament (MP) for Tiverton and Honiton from 2010 until his resignation in 2022. A member of the Conservative Party, he was previo ...
, chair of the Environment, Food and Rural Affairs Select Committee, whose
Tiverton and Honiton Tiverton and Honiton is a constituency in Devon, England. The current MP is Richard Foord of the Liberal Democrats, elected at a by-election on 23 June 2022. Prior to the by-election, the constituency had always returned a Conservative MP s ...
constituency in Devonshire has many of those fishermen, Eustice declined to commit to the certainty of more fish for British fishermen. "We have not started the negotiations yet", he said. The NEF's report doubts that British fishermen would, individually, reap much benefit from a sudden surfeit of salable fish resulting from any exclusion of EU boats. EU law, which the UK will no longer be subject to, caps the total size of the bloc's overall fishing fleet in order to maintain sustainability. The dynamics of
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
, the NEF models suggest, would soon result in more British boats fishing UK waters, assuming EU boats were effectively prevented from fishing them, thereby reducing catches.
Madsen Pirie Duncan Madsen Pirie (born 24 August 1940) is a British researcher and author. He is a co-founder and current President of the Adam Smith Institute, a UK neoliberal think tank which has been in operation since 1978. Early life and education B ...
of the Adam Smith Institute notes that the UK has some environmental protections for its fishery that currently cannot be extended to the entire EEZ due to the CFP. Pair trawling, a practice whereby two boats drag the same ultrawide net behind them as they pursue parallel courses some distance apart, has been widely criticised by environmentalists and some fishermen for killing dolphins and porpoises. The UK has banned the practice but that can currently only be enforced within its 12-mile limit; it continues in the rest of the EEZ. Likewise, Pirie observes that the EU's ban on
discards Discards are the portion of a catch of fish which is not retained on board during commercial fishing operations and is returned, often dead or dying, to the sea. The practice of discarding is driven by economic and political factors; fish which are ...
of unsalable fish caught at sea was only enacted after France and Spain lobbied for exemptions that in his opinion greatly weaken it.


Relocations of financial assets and staff

In August 2020 Valdis Dombrovskis, then the
European Commissioner for Financial Stability, Financial Services and the Capital Markets Union The European Commissioner for Financial Stability, Financial Services and the Capital Markets Union is the member of the European Commission responsible for banking and finance. The current officeholder is Mairead McGuinness. Responsibilities T ...
, warned UK companies that it was unlikely an equivalence finding would be made before the end of the year and that until one was reached the UK would have to negotiate access to capital markets with the EU's individual member states. Early the next month, as EU-UK negotiations appeared to be stalling, '' Financial News'' found that most of the city's major financial companies had not fully prepared for the consequences of a no-deal final Brexit due to the disruptions caused by the pandemic. Many of the 138 companies surveyed told the newspaper they still had "significant" issues to resolve in the four months left to them. Companies had hoped originally that the issues involved in any EU-UK agreement on financial services would remain largely technical, leaving the existing relationship intact. Three-quarters of the companies told the ''News'' they did not expect any deal made by the end of the year to include their industry. Former LSE head
Xavier Rolet Xavier R. Rolet (born 12 November 1959) is a French businessman and the chairman and chief executive officer (CEO) of World Quantum Growth Acquisition Corporation, a NYSE-listed company (WQGA.U). He was CEO of CQS until January 2020, and before ...
cautioned businesses against any last-minute bargain. "Business should not be surprised if the EU's final position privileges the political interests of its most influential Member Nations over any short-term economic self-harm, whether real or perceived," he said. In anticipation of the possibility of no deal and the complications it would cause to serving the EU from London, banks and other financial services companies began moving at least some of their operations to cities within the bloc. In November 2018, as the original March 2019 deadline loomed, a lobbying group in Frankfurt estimated that 37 City-based companies had moved £800 billion worth of assets under management to the German city; by March that estimate had been revised upward to £900 billion (and that amount was believed to be a "significant underestimate") along with 5,000 jobs, as the German government began the process of easing labour laws which had been seen as an obstacle to attracting those jobs. Elsewhere in Europe, Dublin was a particular favourite, with Luxembourg and Paris also witnessing some relocations. Assets banks had publicly announced they were shifting to the EU had reached £1.2 trillion by October 2020, equivalent to 14 per cent of all those owned by British-based banks.
Barclays Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
moved £150 billion, over 10 per cent of its domestic British assets, to Ireland. JPMorgan Chase similarly moved €200 billion in assets, 7 per cent of its global total, to Germany, and indicated up to a quarter of its total wholesale revenue currently produced in the UK could move elsewhere. True totals could be even higher due to transfers that remain undisclosed. Stephen Jones, head of UK Finance, the industry trade group, told a House of Lords committee that the shifted assets could cost the government £3–5 billion in taxes. Staff relocations slowed in 2020 due to the pandemic, but the plans remain. According to Germany's Federal Financial Supervisory Authority (BaFin), most banks had by June completed most of their legal and technical preparations for no deal, but had only relocated a third of their business. European banks in some cases simply merged their British and EU operations to make it easier to relocate staff. American banks like
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
, Bank of America and JPMorgan Chase have leased space in Paris, since ESMA is now headquartered there; already those have moved 1,500 jobs out of a projected 7,000 total out of the UK;
Credit Suisse Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and is one of the nine global " ...
has shown some interest in Madrid—in July 2020 it applied to Spanish and EU regulators for a licence to upgrade its current brokerage in the city to a full-service
investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
hub after the UK leaves the EU completely. It had already moved 50 jobs there. By October 2020 Ernst & Young (EY) estimated 7,500 jobs had moved, amounting to 4 per cent of the city's total. The true number may be higher, since the company only tracks job moves at the largest 222 firms. EY notes the same companies are expanding their EU operations with 2,800 new positions, and others are waiting to see how the trade talks turn out before making any decisions on moving staff. One estimate suggests that eventually only 80 per cent of major Wall Street banks' European staff will be based in London, as opposed to 90 percent beforehand. " tiny, orderly Amsterdam, it is already possible to glimpse what post-Brexit Europe might look like—because it is already here", ''
Fortune Fortune may refer to: General * Fortuna or Fortune, the Roman goddess of luck * Luck * Wealth * Fortune, a prediction made in fortune-telling * Fortune, in a fortune cookie Arts and entertainment Film and television * ''The Fortune'' (1931 film) ...
'' wrote in November 2019. "About 100 companies with operations in the UK have opened offices in the Netherlands because of Brexit, according to the
Netherlands Foreign Investment Agency Netherlands Foreign Investment Agency (NFIA) is an operational unit of the Dutch Ministry of Economic Affairs. It assists foreign companies wishing to establish their business in the Netherlands and to take advantage of the Dutch business environm ...
." AM Best, the American insurance rating company, has moved its EU headquarters to the Dutch capital, which unlike its other EU rivals has not made any great effort to entice companies to move there, and has laws less favourable to high-paid financial workers than those rivals. Many companies are locating in the city's growing new business district,
Zuidas The Zuidas (literally ''South Axis'' in Dutch) is a rapidly developing business district in the city of Amsterdam in the Netherlands. The Zuidas is also known as the 'Financial Mile'. It lies between the rivers Amstel and ''Schinkel'' along the ...
. London still has advantages, particularly the "almost cultural attachment", in one observer's words, that many foreign investors have to it, the English language and
legal system The contemporary national legal systems are generally based on one of four basic systems: civil law, common law, statutory law, religious law or combinations of these. However, the legal system of each country is shaped by its unique history an ...
(still the basis for many financial contracts) and the expertise of the many professionals there. "If you want to see 20 investors who are genuinely invested in your area, London is still the place, and we don't see that changing", says the head of Frog Capital, a venture capital firm that invests in fintech and
green finance Sustainable finance is the set of financial regulations, standards, norms and products that pursue an environmental objective. It allows the financial system to connect with the economy and its populations by financing its agents while maintaining a ...
. "Never underestimate the financial sector's ability to do the business it wants, where it wants, despite regulators putting lines on maps" one central banker told '' The Economist''. Nor do any of the EU rivals offer the range of excellence in all financial subsectors that London does, since they compete with each other as well as London—Frankfurt specialises in banking, Amsterdam in
trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...
s, and Dublin and Luxembourg in fund administration. Paris is the closest to London in having that range, but it still could improve considerably; a recent survey of world financial centres ranked it 18th, just ahead of Washington, D.C. French regulators are also still seen as intrinsically hostile to the financial industry, despite the city's recent efforts to attract more of that business. On 4 January 2021, the first trading day after the UK fully withdrew from the EU, analysts calculated that 45 per cent less stock was traded in London than had at the end of the previous year. This was attributed to Euro-denominated shares no longer being permitted to trade on the British exchange due to a lack of equivalence. It was estimated that a total of €6.3 billion in shares was traded that day in the EU that might otherwise have traded in London. All the shares traded on the pan-European exchange Aquis moved from London to Paris that week as well. The company head called it a "spectacular own goal" for the UK. One unnamed financial industry leader complained to '' The Independent'' that "we've sacrificed financial services for a bunch of fish." The following month it was reported that Amsterdam's exchanges had surpassed London as Europe's largest Euronext trading centre during January, with a daily average of €9.2 billion in shares traded on
Euronext Amsterdam Euronext Amsterdam is a stock exchange based in Amsterdam, the Netherlands. Formerly known as the Amsterdam Stock Exchange, it merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext. The reg ...
and the Dutch arms of Turquoise and CBOE Europe, as opposed to €8.6 billion in London, due to the EU's decision to not yet grant equivalence. Paris and Dublin also saw small increases. In mid-March securities for 50 Irish companies that trade on the Euronext Dublin were transferred from the
CREST Crest or CREST may refer to: Buildings *The Crest (Huntington, New York), a historic house in Suffolk County, New York *"The Crest", an alternate name for 63 Wall Street, in Manhattan, New York *Crest Castle (Château Du Crest), Jussy, Switzerla ...
central securities depository in London to the Brussels unit of
Euroclear Euroclear is a Belgium-based financial services company that specializes in the settlement of securities transactions, as well as the safekeeping and asset servicing of these securities. It was founded in 1968 as part of J.P. Morgan & Co. to settl ...
. This amounted to another €100 billion in assets leaving the UK for the EU since Brexit. Ireland, alone among EU countries, does not have its own securities depository and had instead relied on the UK's, since most Irish companies also listed their stock in London. As the pandemic began to ease in Europe, banks and financial firms picked up the pace of relocations from London to the EU, and said there was likely still more to come. Despite original expectations that most of those jobs would end up in Frankfurt, Paris had actually gained the most by that point, with Morgan Stanley, Bank of America and JPMorgan making the largest moves to the French capital; bankers were said to find its lifestyle, proximity to London and a more business-friendly attitude from President
Emmanuel Macron Emmanuel Macron (; born 21 December 1977) is a French politician who has served as President of France since 2017. ''Ex officio'', he is also one of the two Co-Princes of Andorra. Prior to his presidency, Macron served as Minister of Econ ...
's government attractive. Milan, too, had landed some banking business, with
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
tripling its 2017 staff there, including its head of European corporate and sovereign derivatives. Barclays is also running its
mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
for Europe and the Middle East from Milan. In late 2022, the European Commission announced plans to introduce new regulations requiring financial firms doing business in the EU to clear a portion of their "systemic" derivatives in EU-based clearing houses. The exact percentage would be determined by ESMA within a year of the law's adoption. This has been seen as indicating it was less likely that the EU would extend the equivalence it temporarily granted UK markets after Brexit beyond its current expiration date of 2025. "London used to be the largest financial centre of the European Union and everybody liked it," said Euronext CEO Stéphane Boujnah. "Today, t'sthe largest financial centre of the United Kingdom". He noted that
Ryanair Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
had recently chosen to list in Dublin only instead of the LSE as well, and Universal Music Group chose to list in Amsterdam, bypassing London entirely. An EU official told ''The Guardian'' that the regulatory proposal had less to do with Brexit and more with the desire for the bloc to be less dependent on outside providers, a lesson it had learned from the effects of the recent Russo-Ukrainian War.


See also

* Glossary of Brexit terms


Notes


References


External links

* {{Brexit topics Brexit Finance in the European Union Finance in the United Kingdom European Union fishing regulations Fishing in the United Kingdom British political phrases