Blain’s Morning Porridge May 20^th 2025: Finally the UK gets a Brexit deal – Rejoice!

“It’s no good believing in Brexit if you can’t make it work…”

The UK and Europe have signed a framework deal which should prove massively positive for both economies. It resets the UK’s place as a financial and politically sovereign nation close to the heart of Europe. That’s what Brexit always should have been – it’s going to trigger growth because it will boost CONFIDENCE!

We do sproth a lot of absolute bollchocks here in the UK. (Sproth – a new word I’ve just invented to describe high-level political dumbf*ckery expressed as holy writ. Bollchocks because I’m not allowed to write boll*cks.)

Yesterday was a great day for sprothingly meaningless political noise – listening to a succession of furious hard-line Brexiteers on the verge of self-combustion recite a litany of increasingly lurid accusations about treason and betrayal, while presenting improbable political opinions as irrefutable facts. No wonder the British electorate is confused. They were promised Brexit would result in a massive economic boost to the economy, $350mm extra funds would flow to the NHS every single week, and everything would be better in every conceivable way after we shook off the Brussels Yoke.

Er… a Good Brexit didn’t happen… it has been an appalling disaster.

Till now.

I reckon it might be time to pull on your buying boots and look for opportunities to invest in the UK and Europe. Yesterday’s deal is going to be a game changer for both economies.

Let’s be brutally honest: The last decade of Brexit dither and foolish pride saw the UK sidelined, politely ignored, excluded, become less relevant.. almost becoming that pariah state nobody invited to parties. There was a growing international perception the UK had become a nation of aging Brexit bores – endlessly blaming our failures on our ex-partner in Brussels. If it wasn’t for the UK’s soft-power – history, education, sport (thank the lord for Football and Cricket), culture and very effective monarchy, no one would have particularly remembered our grubby little island set in these cold grey northern seas.

Yet, finally, 9 years after the good people of the UK narrowly voted in favour of what turned out to be the equivalent of a full-frontal economic lobotomy – we are going to get Brexit done. It looks increasingly likely the UK is on a pathway to emerge with an effective, pragmatic and workable Brexit Deal – one that sees us politically separate and distinct as a sovereign nation, but aligned with Europe’s core market.

Hallelujah!

It could result in some seriously appealing moves higher for UK markets. And for Europe.

The great gift of yesterday’s highly imperfect, slightly concocted, framework deal between Europe and the UK at yesterday’s summit in London will be a new sense of Confidence – the secret ingredient X which can move flolloping, slowing, tired economies back into the fast lane. A new deal with Europe should kick start both the UK and European economies.

It had to happen. Govt figures suggest the UK economy is 4% smaller than it would have been without Brexit. For nearly 2 decades the European economies have stagnated – partly on the back of adapting to the realities of using the shared Euro while realigning their economies to it. (Issues like how much debt European nations can raise remains work in progress.) It’s taken time – and many global investors have pretty much written off Europe and the UK as decaying, old and slowing economies – Europe riven by excessive bureaucracy, while the UK slivers in a morass of political incompetency.

Now we might be emerging with a good Brexit deal. It will be a practical one, with some give and much take on both sides. In recent weeks, the UK has stumbled into an almost decent tack as other nations – not just India and the USA, but soon the Gulf – want to do deals with us. They are imperfect deals – but they are deals. Starmer is the right – the UK is back on the map…. Where we always have been… on the Greenwich Meridian right in the centre!

Don’t accuse me of being a Remoaner – I voted for Brexit. In many ways it’s a concept I still support – but not in the format it was done.

I saw both the upside and downside of Europe: the single market is a marvellous idea, but political union under the aegis of the single currency looked increasingly unworkable for the UK. We had already learnt the hard way how sterling, and thus the economy, was never going to be part of the Euro. (Curiously, we have Scott Bessent, current US Treasury Secretary for that – he was George Soros’ right-hand man in the Black Wednesday collapse of sterling back in 1992!)

It was always clear the UK would never surrender its financial sovereignty – which the core members of the EU using the Euro have done. What myself and other pragmatic Brexit supporters hoped for was an arrangement whereby the UK could participate in the market and pass on the politics as a close associate – but we approached it in the wrong way.

We saw Brexit as an academic exercise – finding an optimal solution between rational nations taking decisions that made most sense for both parties. The UK would thrive outside Brussels politics, while Europe could move on to complete fiscal and monetary union. And we would all still trade with each other.

That is not what happened. Hardline Brexiteers, now embedded on the militant wing of the Tories and Reform characterised Brussles as the enemy. It was not. It’s a trading partner. We left badly – instead of apologising and admitting “it’s not you, it’s us,” and trying to remain friends.. we acted like it was a bad divorce and blamed them. The tribulations of the Conservative party as it self-destructed under Theresa May, suffered delusional buffoonery under Boris, and then went quite mad under Truss, summed up the impossibilities of the Brexit deal. The deal Boris finally did was an atrocious Horlicks of a compromised clusterf*ck.

Let’s all get over it.

Let’s admit Brexit – in its first iteration – was a mistake. I am not the only person that thinks so – if the referendum was held tomorrow, the EU flags would be back flying high over Westminster. People want e-gate entry to Europe. In fact, they will get much more.

Now we have to seize the opportunity presented by Sir Keir Starmer’s deal yesterday. It was not treason or betrayal. The party with a massive majority in parliament said it was going to negotiate a better deal with Europe in its election manifesto, and it has gone ahead and done it. That is not betrayal – that is delivering on a manifesto commitment. Well done Starmer!

Predictably Starmer has been accused of surrendering Britain to Europe, Betraying Brexit and selling out the UK’s Fishermen. Kemi Badenough – leader of the Tories if you remember them – doesn’t seem to have done politics 101. She says she will immediately reverse any new agreement with Europe when she is prime minister. Brilliant move – in a single throw-away line she’s shown Europe the UK night be as unreliable a partner as Trump’s America. That’s the kind of political stupidity that damages economies.

I confidently expect yesterday’s deal will lead to a better and stronger Brexit deal – whereby Europe and UK get even closer on areas like Defence, Science and Technology and Agriculture. Energy, Renewables and Climate Change will be part of our futures apart but together. There will be immediate benefits. Cutting the red-tape that leaves UK produce rotting in the docks can only help UK farmers (but don’t expect them to ever thank Starmer.) 99.9% of UK businesspeople know that better terms with Europe will be business positive. The head of the Scottish Salmon trade association absolutely welcomed it – it’s a bigger business than the rest of UK fishing industry – meaning exports won’t be held up and spoilt, thus reducing costs.

Does it matter if the UK becomes “a rule taker” in the Sanitary and Phytosanitary aspects of the deal? It if cuts red tape, the need for certificates pf control, and means cheaper food imports into the UK – seriously, what’s not to like?

A furious Farage fulminated y’day, calling the deal: “the end of the UK fishing industry.”

Absolute twaddle. One reality is it opens a door for UK fishing to sell even more piscine produce we don’t consume in the UK into France. This weekend I can guarantee there will be Cornish spiky crabs on sale in Trouville’s fish market in Normandy – but I’ve never seen one in a UK fish market. UK shellfish will once more appear in European fishmongers.

Reform claim Starmer traded away the UK’s fishing industry for a deal.  On the bargaining table was the UK’s fishing industry of 10,000 fisherman and over 5500 fishing boats, and at least as many other jobs in processing associated with the industry. They landed 730,000 tonnes of fish in 2023 worth £1.2 bln. Its 5% of the UK food and forestry sector. As a nation we import nearly as much we catch, and export about 40% of our total catch – mainly to Europe, although prime Cornish Lobsters can be found in the best restaurants in Beijing.

Sharing our waters and precious quotas with Spanish and French fisherman offends Reform and annoys British fishermen who have an interest in keeping catches low. Starmer hasn’t given Europe more fishing rights – for the next 12 years the Europeans will retain their current access to our fishing grounds. UK fishermen will be compensated with money for new equipment to upskill the industry – over £65k per vessel.

Their industry could thrive. Its up to them.

To put fishing in context – it’s reckoned the UK has seen some 2 million jobs foregone as a result of Brexit. In the City of London the effect is most visible – around 300,000 fewer people are employed in the City than pre-brexit and we all know friends and colleagues who have been transferred to Yoorp.

To finish up – well done Starmer…. We have a Brexit reset that might work.

Out of time and back to the day job….

Bill Blain

Author of the Morning Porridge

Founder Windshift Capital

Partner Shard Capital