Brexit, Encouraging European Companies to Move to the UK?

Photograph Source: Giles Turnbull – CC BY 2.0

Boris “BoJo” Johnson, who told his family he wanted to be “World King” when he grew up, sold Brexit to Brits primarily by resorting to mendacious boosterism. In essence BoJo, strutting as a post-Brexit populist, presented Brexit to Brits as a massive opportunity, when there were clear and obvious counter-indications to any such claim.

As early as the time when BoJo was a Brussels-based journalist covering the EU he started to lie about it, saying the eurocrats wanted to ban “curvy bananas”, and that their compensation was generous enough for them to live in luxury chateaus in the countryside around Brussels.

Some of his former colleagues suggest that BoJo was a Remainer until he realized this was not the Tory route leading to the prime ministership, and switched his position accordingly. Some of BoJo’s journalism confirms this impression, but it’s also possible that the opportunistic BoJo was merely hedging his bets.

When he campaigned for Brexit, BoJo dealt almost exclusively in slogans, and lied that the UK was sending £350m/$439m a week to the EU. Research based on focus-groups was used to generate catchy slogans— “Take Back Control”, “Global Britannia”, “Brexit means Brexit”, “Leave means Leave”, “Let’s go WTO” (posing the World Trade Organization as the institution to replace the EU), “WTO terms”, and so on.

BoJo’s main slogan “Get Brexit Done” may have resonated with a big chunk of voters, but it is palpable now that Brexit is not yet “done” (for example, the UK is trying to back out of the Northern Ireland Protocol it signed with Brussels, the core of which requires a “soft” border to exist between the two parts of the partitioned Irish isle); and those fragments of it that have been “done” are turning out to be a disaster for Ukania.

The UK Office for Budget Responsibility (OBR) forecasts a 4% reduction in national income once the full effects of Brexit are felt; tax increases will be needed to offset revenues lost from the Brexit drag on the economy; the OBR says inflation is set to peak at close to 5% in spring next year and remain high for the next 2 years; new trade deals, greeted with Tory drumrolls, will add less than 0.2% to GDP in the long term; US-UK trade talks are completely non-existent; as mentioned, the Northern Ireland Protocol, essential to peace between the two parts of Ireland, is in jeopardy; meat carcasses are being sent to the EU because of worker shortages at UK meat-processing facilities; supermarkets have empty shelves; fruit and vegetables have been rotting on farms because seasonal workers from EU countries have left the UK and won’t return; there is a lack of chicken products on the menus of fast-food outlets; a shortage of workers from EU countries is hampering housing construction; drivers of long-distance trucks are in short supply; the departures of staff originating from EU countries is putting pressure on the NHS; the UK fishing industry has been sold down the Channel; and so on.

Larry Elliott, the Guardian’s economics editor, says of this situation: “Inflation has hit its highest level in a decade. For most people, prices are rising faster than wages. Energy bills are soaring. The Bank of England is poised to raise interest rates next month. Personal taxes are going up in the spring. A tough winter looms”.

As a result, the magical thinking and myth-making underlying the Brexit prospectus have had to be extended, or even magnified, to gloss over Brexit’s increasingly visible shortcomings. Every seeming non-disaster has to be inflated into a post-Brexit accomplishment of huge proportions.

Last week the oil giant Shell announced it will take up a new tax residency in London and remove “Royal Dutch” from its name. The UK business secretary Kwasi “Queasy” Kwarteng, in a near ecstasy, tweeted after Shell’s announcement:

‘Welcome news @Shell is proposing to relocate its Group HQ to the United Kingdom as part of their plans to accelerate the transition to clean energy. A clear vote of confidence in the British economy as we work to strengthen competitiveness, attract investment and create jobs’.

“Transition to clean energy”? Shell’s scurry to the UK follows a Dutch court order requiring it to slash its emissions by 45% in 2030 compared to their 2019 levels, hardly a sign that Shell is eager to make this “transition to clean energy”.

Shell itself has said that one of the primary reasons for the move to London is that the Dutch Government has not abolished its dividend tax, which Shell has railed against– the Dutch tax authorities collect a 15% dividend tax for Dutch-based companies, hence by moving to the UK,

Shell will avoid paying this tax.

Kwarteng also failed to mention that from 2015-2020 the Tory government helped cover Shell’s costs of drilling for oil & gas by giving it £726/$976m. Not that Shell was starving for cash. During this time Shell made £28bn/$38bn from its activities worldwide.

Shell’s eagerness to move to the UK was paralleled by the global conglomerate Unilever. Unilever’s move was small potatoes, but typically puffed-up by the Brexit lobby.

Unilever was simply getting rid of its unwieldy 2-headed corporate structure. As the Guardian reports:

‘[Unilever] employs 2,500 people in the Netherlands and 6,000 in the UK. It said the change would have no real impact on the day-to-day running of the business. “There will be no change to the operations, locations, activities or staffing levels in either the UK or the Netherlands as a result of unification,” it said in a statement. Unilever… confirmed its foods and refreshment business, which is around 40% of sales, will remain based in Rotterdam’.

RELX, the multinational information and analytics company, is another entity with a 2-headed corporate structure which decided to base itself solely in the UK. According to

‘Chief Executive Erik Engstrom said a single parent company was a natural step following the renaming of the group from Reed Elsevier and creating a single entity three years ago.

“There’s no change to our strategy and there will be no change to the locations, activities or staffing levels of RELX group or any of its four business areas,” he said.

“Nothing will move from the Netherlands to the UK.”

Engstrom said Britain’s decision to leave the European Union was not a factor in deciding on the change.

“It was simply a matter that the UK company is slightly bigger, it’s a slightly bigger proportion of the total, and the group’s headquarters has always been in London, so it just became the more natural side to put it,” Chief Financial Officer Nick Luff told reporters”.’

The moves made by Shell, Unilever, and RELX to the UK therefore have little to do with a “strong UK economy”, let alone Brexit, and everything to do with naked economic self-interest on the part of these corporations.

For Brexit’s illusions to be maintained, Brits have to succumb to the occultations conjured up by their devious and unscrupulous rulers.

Kenneth Surin teaches at Duke University, North Carolina.  He lives in Blacksburg, Virginia.