Blain’s Morning Porridge November 10^th, 2026 – Brexit? It was a mistake, but now it’s an opportunity!

“Europe… an imagined notion separated from reality by the Channel and the fog.”

The Brexit Debate is never going to end. But the UK and Europe need to look to the future. The World in 2026 is very different to what short-term populist politicians thought they were selling us in 2016. A new relationship around trade, cooperation, and security, is possible and positive. Moreover, there is an easy win that could accelerate European growth – strengthening and unifying European Capital Markets!

LINK TO PODCAST

Key Takeaways:

• Brexit has proved a fundamental mistake. It was a gamble on a World that no longer exists. New trading relationships were missed, and now the War in Ukraine and the breakdown of the US security umbrella make closer UK-Europe security cooperation a necessity.
• There is an easy win to be had for re-engaging with Europe. The long-delayed integration of European capital markets to funnel the wealth of Europe into regional growth could give it similar heft as the USA in developing and growing new tech business of the future.
• London, in particular, could reap a second Big Bang through leadership of new pan-European Capital Markets, while reinvigorating other European capitals as leading financial centres.
• The alternative is for US firms to continue using the depth of US capital markets to harvest and exploit European innovation and invention, while arbitraging European Assets.
• Defence is one aspect – European defence desperately needs private capital to grow the new innovative new weaponry required on the battle space, but the bulk of funding is coming from US firms. Peter Thiel’s latest LOTR themed ploy is a defence fund scooping up European capabilities on the cheap!
• Brexit was a particularly British mistake. Badly done and badly executed. Political opportunism ran into bureaucracy and a legalistic approach to the negotiations.
• A new European-UK relationship does not require the UK to rejoin Europe, but a coming together on trade, security and capital markets.

In 2016 I surprised many of my chums by voting for Brexit.

I have never claimed to be particularly intelligent – and I guess that’s the proof. It cost me much of my limited credibility. Many clients and media contacts sidelined me – how I could be a market-literate, soft-left-capitalist, a free-marketeer and a Brexiteer?

Easy. I voted for Brexit because I am essentially chaotic.

I foresaw opportunities for an unconstrained Great Britain to build new mercantile relationships with North America, South-East Asia and the rest of the English-Thinking world, while remaining close to Europe. I was delusional. (A ruinous divorce apparently taught me little about good intentions colliding with lawyers and legal negotiations.)

And, I didn’t have a crystal ball to foresee how the world would change. Today the Brexit debate is back on the front burner. It’s timely that it is.

Brexit has made Europe more vulnerable in 2 ways.

The first is obvious. The War in Ukraine leaves Europe entangled in the Hegemonic struggle for global dominance between the USA and China. As America pulls back its global defence umbrella, Europe is left exposed and rushing to rearm. The likelihood that would happen never occurred to the politicians who jumped on the Brexit bandwagon to further their political careers 10-years ago.

Russian money backing the Brexit campaign was exceedingly well spent, achieving the objective of splitting Europe as their aggression in Ukraine escalated. I am equally convinced Russian influence is funding dissent in Europe as part of their Grey-War strategy to destabilise European resilience.

Today, its 100% clear the UK and Europe need to be more closely aligned in terms of security. Given how the UK has failed to open new markets, and the trans-Atlantic NATO relationship has broken down, the UK needs to redefine a new long-term security and trade relationship with Europe – which should involve open-borders. Which means the Brexit debate needs to be reopened.

However, the second weakness created by Brexit is less obvious. It favours the USA.

Brexit ensured the collapse of any programme to create a unified European Capital Market. It’s a critical failing.

The depth and scale of US Capital Markets have been the greatest economic strength of the USA for the last 20-years – the scale and scope of the US financial system to finance the capital needed to innovate and grow its world leading technology led sectors has been incredibly powerful. If Europe could unify its capital markets, that could be the greatest single driver of growth factor – creating internal value, growth and jobs. The initiative to have made it happen was lost post-Brexit and in Europe’s flawed, over-regulated response to the Global Financial Crisis of 2008.

Unification of European Capital Markets should be at the core of any new Europe/UK relationship. The UK, just, still leads in terms our financial acumen and expertise. (The last 20-years, since the Global Financial Crisis, has seen the bureaucratic stifling of European banking and finance, while the US financial institutions have run amok across the global economy!)

Europe is a wealthy continent, and with strong universities and a superb entrepreneurial culture across the whole region, there is no reason a new united European market would not match the USA! Until 2009, European growth and the economy was on a par with the US!

But we need to move fast. For decades the largest US investment banks, funds, private equity firms, and hedge funds have grown exponentially in terms of dominating European finance while trawling for opportunities to arbitrage diverse and cheap assets. Its not inwards investment – its minesweeping Europe’s future and patriating it to the USA. (Check out Angus Hanton’s 2024 book – Vassal State – for how its impacted the UK.)

Just this week I’ve been reading about a new Peter Thiel backed Defence Fund, Onodrim (yet another Lord of the Rings inspired name – the Elvish for “Ents”), which is notionally Dutch. It’s used that depth of US capital markers to secure US tech money which will invest in Europe’s defence manufacturing capability. Sound like great news in terms of much needed private capital – but effectively it looks like part of a linked mechanism to buy up European capacity on the cheap.

Thiel’s Founders Fund is a core investor in the team (who are ex-Palantir). Similarly, Tolkien themed Thiel business Anduril (Aragon’s sword) has an “elite team of M&A guys” in Europe to buy up European Defence opportunities, while Palantir (the LOTR seeing stones) has it’s AI driven tentacles spread through European governments and the procurement agencies. The money is coming from firms Founders works with. I wonder if they might all just be working together? (NSS award to myself!)

History can be a handicap.

The UK needs to get over our fear of dealing with Europe. The Scots are still in denial about the 1707 Union of the Crowns. The English aren’t quite sure about 1066 – good or bad thing? Today the reality is 52% of Brits want to rejoin Europe. Less than 30% still think it was a good idea. It’s clearly impacted the economy, but no one is prepared to accept the numbers. I will go with an 8% hit to GDP, lost productivity, and leaving the UK a massively less attractive place on the global business map. Brexit has delivered nothing – and I’m not going to bother debating it.

Whatever happened to the big ideas and promises? The Webster Prize – my chum Andrew offered £100 to anyone who can comprehensively prove any one thing Brexit has made better – remains unclaimed.

To understand why Brexit failed we need to be honest.

What was needed was a radical, resilient, adaptive, evolutionary, intuitive approach to energetically ensure Britian’s long-term post-Brexit future. But the reality was no one on the Brexit side of the table had gotten beyond “we don’t like foreigners or how they do things” page of the plan.

If the Brexit negotiators had deliberately set out to get the worst deal imaginable it would probably would have resulted in something better. It’s a mindset problem. British politicians, their advisors and the Civil Service, were utterly unprepared for change. Change is something that doesn’t happen in Whitehall. Change is not in the DNA of the civil service. Imagine Brexit was negotiated by teams of Sir Kier Starmer clones…

Never forget the British practically invented the queue. We are stoics. Ask Brits what they regret about Brexit and its queues to get through European customs rather than a crashing standard of living, lack of opportunities for the kids, or the rise in right-wing populist bigotry!

We like order and predictability. We like things to remain the same and we dislike change. The failure of Brexit was asking a nation that is wedded to bureaucracy and follows the rules to suddenly accept everything changing. (If Italy exited the EU, I suspect no one would know or care… life, commerce and business would carry on exactly as before.) It didn’t help that Boris, the self-appointed face of Brexit had only embraced it to boost his own political star, hadn’t expected to win, and had nary a breeze of a notion of what to do if he did.

Instead of energy, we got a stultifying, legalistic, bureaucratic, analytical approach to the divorce from Europe. There was little consideration of how consequential decisions made then would leave the UK’s long-term options.

Another issue is that the UK’s perception of Europe is flawed. We all know that Brussels is bureaucracy cubed, a regulatory quagmire of rules and compromises designed to hold the Community together. But each European state is effectively no different to the UK – proud of their own culture, history, and story. None are particularly minded to be stamped into a single European polyglot culture. In their diversity is their uniqueness.

The European Community and the Currency Union have become constructs to pull together the modern equivalent of squabbling small city states. There is a perception Europe should be more like the USA, but it lacks the shared common Anglo-Saxon-Celtic ancestry that enabled the original founding states of the USA to become one. (The differences between the heritage and roots of these same states were strong enough to nearly pull them apart less 84 years later.)

10-years is long-enough to know that a bad idea was a very bad idea. Brexit was a mistake. Yet the right-wing populists are still in denial. Signing an accord to let European Students come learn about the glories of Britain on Remembrance Sunday seems perfectly apt to me given how many of the sons of Albion lie on foreign fields across Europe, but it seems to have triggered right-wing conniptions.

We need to get over it and accept it was a daft mistake…

Out of time and back to the day job….

Bill Blain

Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital

Meanwhile, don’t forget about my new book: The Battle for Hamble

You can read a review on the Society of Professional Economist’s website here.