Keep qualms and carry on: a decade after Brexit

Summary

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Economist Podcasts: "Keep qualms and carry on: a decade after Brexit"

Date: June 23, 2026
Host: Rosie Blore
Guests: Daniel Franklin (Senior Editor, The Economist), Tom Carter (Britain Economics Correspondent, The Economist), Georgia Banjo (Britain Correspondent, The Economist)

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Episode Overview

This special episode marks the tenth anniversary of the Brexit referendum. The hosts and guests reflect on how Britain has fared since voting to leave the European Union, the accuracy of predictions made at the time, the persistent political and economic consequences, and what the future might hold, particularly with a new Prime Minister imminent.

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Key Discussion Points & Insights

The Turbulence of Post-Brexit Politics

• Political Instability:

  • The UK is about to appoint its seventh Prime Minister in a decade.

    “It’s ironic… Britain is in a way becoming more European. Here we are with our seventh Prime Minister about to come into office and we’re sort of becoming Italy.” — Daniel Franklin [03:20]

  • Brexit’s legacy has contributed significantly to this instability, making governance more challenging.

• Immediate Reactions to the Vote:

  • Both Rosie and Daniel recall personal moments of shock as the referendum results were announced.

    “There was a sense of shock... you had to carry on as if nothing had happened, except something extraordinary had happened.” — Daniel Franklin [04:05]

The Road to Brexit: Causes and Campaigns

• Origins:

  • David Cameron’s 2013 pledge led to the 2016 referendum aiming to “settle the issue for a generation.” Ironically, it continued to fuel debate.

• Campaigns:

  • The Leave campaign leveraged contentious messaging and misleading figures (notably the claim of £350m per week sent to the EU).
  • Immigration fears were prominent, exemplified by Nigel Farage’s inflammatory poster campaigns.
  • Major turning point: Boris Johnson’s switch to support Leave gave the campaign a charismatic leader and extra momentum.

    “Given that the margin was, you know, only 52 to 48, I think it does suggest that Boris was quite an important factor in the outcome.” — Economist Commentator [10:52]

• Aftermath:

  • “Leave had won, so clearly we were going to have to leave. But nobody knew what that meant. There was no clarity about what would happen next.” — Economist Editor [12:26]

The Economic Impact: A Decade On

GDP & Growth

• Mixed but generally negative economic impact, with disagreement over the precise scale:

  “Some studies suggest that it has shaven about 8% of GDP off. Other studies only suggest it’s 2 1/2%... But what we can say is that Britain has grown less quickly than most G7 countries.” — Tom Carter [13:51]

Manufacturing & Trade

• Additional trade and customs friction has especially hurt small exporters.

  “Britain’s share of global goods exports has fallen by 17% from the referendum to 2025…” — Tom Carter [14:40]

• Manufacturing decline predates Brexit but has intensified since, partly due to increased paperwork and customs barriers.

Services & Financial Sector

• Services exports are a rare bright spot, rising 47% since the referendum:

  “Britain… is butler to the world... Lawyers, engineers, architects… provide their services... That hasn’t changed as a result of Brexit.” — Tom Carter [15:42]

• Financial services (the City) remain strong but have not fully capitalized on regulatory autonomy post-Brexit:

  “We haven’t taken as much advantage of the Brexit potential flexibility... We’re pretty good at red tape ourselves.” — Daniel Franklin [16:34, 17:53]

Regulatory Reform (or Lack Thereof)

• The “Singapore-on-Thames” deregulatory vision failed to materialize as many EU-origin rules remain because of UK domestic politics.

Opportunity Costs

• Immense national focus and resources have been expended navigating Brexit, at the expense of responding to other global developments.

  “Businesses tied up with this... meant we haven’t been able to lift our eyes... to cope with the world as it is now, the changed world that it is 10 years on from Brexit.” — Daniel Franklin [17:53]

Brexit Malaise

• National fatigue with Brexit debates permeates politics and society.

  “We’re really bored of it, aren’t we? We talk about it endlessly.” — Rosie Blore [18:37]

• The UK continues to grapple with its global role.

Immigration

• Post-Brexit, net immigration actually surged, largely from non-EU countries:

  “In 2023 over a million non-EU people came to this country… If you were voting to take back control of immigration, you really were given a bloody nose by Boris Johnson and his immigration policy.” — Tom Carter [20:04]

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Brexit Benefits & Future Opportunities

Environmental & Animal Welfare Gains

• Select gains cited include:

  • Improved protection for puffins and sand eels due to independent fisheries regulation.
  • Octopuses recognized as sentient under British, not EU, rules.
  • New farming incentives leading to extensive hedgerow planting.

• “We’ve identified, for example, that puffins have done rather well out of Brexit.” — Daniel Franklin [22:07]

Technology and AI

• AI is a standout sector, with vibrant British tech startup activity:

  “British tech startups... have already raised over 14 and a half billion pounds from venture capital... That is more than all the other major European markets combined.” — Georgia Banjo [23:19]

  • 33 AI unicorns: outpacing France, Germany, and the Netherlands combined.
  • The UK’s lighter regulatory touch (“vibes… it feels freer than Brussels”) has been a draw, but scaling still requires navigating EU rules and UK visa barriers.

  “There is one particular sector that may have done rather well, and that is artificial intelligence.” — Georgia Banjo [23:19]

  • But the UK remains a “minnow” compared to America and China.

    “When you look at Britain compared with America or China, we look very differently. We’re a very small player in that context.” — Daniel Franklin [25:31]

Defence and Strategic Autonomy

• Changing security dynamics in Europe post-Ukraine war offer the UK a renewed leadership role outside the EU.

  “Britain can use its flexibility, its historical strength. But... it is not simple either, because we find it difficult to raise the money to match our strategic thinking on the issue.” — Daniel Franklin [27:05]

The Need for Realism

• Rejecting “magical thinking”; new leadership can’t simply reverse a decade’s damage by changing PMs.

  “I think what we’ve seen in the whole Brexit saga is a tendency towards magical thinking... The main thing that any new Prime Minister coming in needs to do is have a bit of an honest reckoning with where Britain is and the challenges that it faces.” — Daniel Franklin [28:44]

The Next Generational Question

• AI, not Brexit, will likely define the coming decades — Britain must find a way to make itself strategically important amid global technological shifts.

  “How the world reckons and indeed makes the most of AI is going to define the coming decades. And I think a big question... is how does it find its way?” — Georgia Banjo [29:42]
  “It’s also... fascinating how little these questions depend on British membership of the European Union.” — Daniel Franklin [30:17]

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Memorable Quotes & Moments

• "Britain is in a way becoming more European. Here we are with our seventh Prime Minister... becoming Italy. And meanwhile, Italy looks an oasis of stability."
  Daniel Franklin [03:20]
• "I think we saw it [Brexit] and still see it as a great act of self-harm and monumental folly."
  Daniel Franklin [04:59]
• "Businesses tied up with this... meant we haven’t been able to lift our eyes... to cope with the world as it is now, the changed world that it is 10 years on from Brexit."
  Daniel Franklin [17:53]
• "In 2023 over a million non EU people came to this country… If you’re sitting in one of these towns in the UK and you were voting to take back control of immigration, you really were given a bloody nose by Boris Johnson and his immigration policy."
  Tom Carter [20:04]
• "We’ve identified, for example, that puffins have done rather well out of Brexit."
  Daniel Franklin [22:07]
• "There is one particular sector that may have done rather well, and that is artificial intelligence."
  Georgia Banjo [23:19]
• "I think what we’ve seen in the whole Brexit saga is a tendency towards magical thinking…the main thing that any new Prime Minister coming in needs to do is have a bit of an honest reckoning with where Britain is and the challenges that it faces."
  Daniel Franklin [28:44]
• "It’s fascinating how little these questions [about the future] depend on British membership of the European Union."
  Daniel Franklin [30:17]

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Important Timestamps

• Political context and initial reactions: [03:06]–[05:43]
• The lead-up to Brexit and campaign dynamics: [05:54]–[12:14]
• What happened after Leave won; the years of uncertainty: [12:26]–[13:16]
• Economic impact discussion (Tom Carter): [13:30]–[17:22]
• National malaise and political consequences: [18:37]–[20:28]
• Benefits claimed from Brexit, especially in environmental and animal welfare: [22:07]–[23:07]
• Technology and AI opportunities: [23:19]–[25:52]
• Defence, Britain's ongoing role, and new leadership challenges: [27:05]–[29:42]
• Reflections on future generational challenges: [29:42]–[30:44]

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Tone and Language

The discussion is witty, candid, and at times self-deprecating, matching The Economist’s blend of seriousness and dry humor. The conversational style is engaging, with participants freely challenging each other's optimism and expectations.

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Final Thoughts

Ten years after the Brexit vote, the episode paints a clear-eyed picture: Brexit’s promises remain largely unfulfilled, its costs are substantial, and Britain still faces profound questions about its national identity and role in the world. While there are glimmers of opportunity — in sectors like AI and through reclaimed regulatory powers — the UK’s challenges remain deeply structural, demanding realism and sustained focus from its leaders.

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Transcript

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[Narrator/Producer]

The economist.

[Rosie Blore]

Hello and welcome to the Intelligence from the Economist. I'm Rosie Blore. Today we're devoting our show to the moment 10 years ago that changed Britain.

[News Reporter]

The total number of votes cast in favour of remain was 16,141,241. The total number of votes cast in favour of leave was 17,410,742. This means that the UK has voted to leave the European Union.

[Rosie Blore]

In the referendum of June 23, 2016, Britons voted for Brexit by 52% to 48. Those who campaigned to leave the European Union promised a future free of external interference, ripe with opportunity. Those who wanted Britain to stay part of the eu, including us here at the Economist, warned of disastrous economic damage. Ten years on, how have those predictions fared? And with the impact still very much being felt and Britain about to get a new prime minister, where does the country go from here? Helping me answer those questions is Daniel Franklin, one of our senior editors. Hello, Daniel.

[Daniel Franklin]

Hello, Rosie.

[Rosie Blore]

Daniel, it's already been a tumultuous week in British politics. Does the fact that we're about to get our seventh Prime Minister in a decade have anything to do with how destabilising Brexit has Been?

[Daniel Franklin]

Well, it's ironic, isn't it, that Britain is in a way becoming more European. Here we are with our seventh Prime Minister about to come into office and we're sort of becoming Italy. And meanwhile, Italy looks an oasis of stability. But seriously, I think it has a lot to do with the specifics of Sir Keir Starmer. But it doesn't help that the legacy that Britain has had from 10 years of Brexit has made governing Britain so much harder. And so to some extent, Brexit hasn't helped. And does, if you look at it collectively, certainly account for the fact that we've had quite so many changes of leadership over the past 10 years.

[Rosie Blore]

We'll come on to the impact in a minute, but just tell me what you remember about that day 10 years ago and when the votes were then coming in.

[Daniel Franklin]

Well, I was actually out of the country, wasn't in Britain, I was in France. And it was surreal. I remember very clearly when the results started to come in and it became, I think, quickly clear which way the vote was going. And then I remember that there was a sense of shock. Certainly it was not an outcome I had wanted. And the next day you had to carry on. I was chairing an event and you had to carry on as if nothing had happened, except something extraordinary had happened. And at least one of my panelists on the panel I was moderating pulled out because there was no corporate line yet on Brexit.

[Rosie Blore]

I too was out of the country. I was reporting in China at the time and I remember just busily refreshing and refreshing that BBC page, hoping those votes would shift, but of course they didn't. Now the Economist, of course, voted to remain. At the time we wanted to stay as part of the European Union. Just explain that.

[Daniel Franklin]

I think we saw it and still see it as a great act of self harm and monumental folly. It was a very strange moment in British politics, a sort of perfect storm of things that combined to make both in the political leaderships of the various parties, in the state of the economy and in the state of Europe. Frankly, that meant that this was a very bad moment to have that referendum. The results which we'll talk about were not as immediately dramatic as perhaps many people predicted. But cumulatively it's been a painful process and one that's led to a lot of inward focus in Britain over a time when we really needed to be coping with what was happening in the real world beyond us.

[Rosie Blore]

So we'll get to that cumulative effect in a minute. But in the meantime, Jason has Been looking at what led up to that seismic vote.

[Narrator/Producer]

The real starting gun for Brexit was a speech in January of 2013 by then Prime Minister David Cameron.

[David Cameron]

We will give the British people a referendum with a very simple in or out choice to stay in the European Union on these new terms or to come out altogether. It will be an in out referendum.

[Narrator/Producer]

The Economist was generally in support of Mr. Cameron's decision.

[Economist Editor/Commentator]

We wrote a leader saying that Cameron was right to say, I will hold a referendum on the eu.

[Daniel Franklin]

Yes.

[Narrator/Producer]

Once we realized we needed one. John Pete became our Brexit correspondent. By the end of it all, I was referring to him as our long suffering Brexit correspondent.

[Economist Editor/Commentator]

We accepted that there was an argument put indeed by David Cameron, which was, this issue has been rumbling along in the Conservative Party for years and the best way to settle it will be to have a referendum and that will settle the issue for a generation and we'll stop arguing about it.

[Georgia Banjo]

Ha.

[Narrator/Producer]

Stop arguing about it. To be clear, even Mr. Cameron in that same speech said it was a

[David Cameron]

bad idea because I believe something very deeply that Britain's national interest is best served in a flexible, adaptable and open European Union, and that such a European Union is best with Britain in it.

[Narrator/Producer]

At the time, Mr. Cameron's Conservative Party was part of a coalition government with the Liberal Democrat Party. Their shared grasp on power felt precarious because of pressure from their right, in particular from one man who groused about Britain's EU membership even as he sat as a member of the European Parliament.

[Nigel Farage]

The EU budget isn't really the question. It's Britain's place in this union that is the real question. And increasingly, Britain looks like a square peg in a round hole these days.

[Narrator/Producer]

Nigel Farage leads the Reform Party, once called the Brexit Party, but back then he headed the UK Independence Party, or ukip. He's been banging this drum for some time.

[Nigel Farage]

We love Europe, we just hate the European Union. It's as simple as that.

[Narrator/Producer]

Fast forward to 2015. The Conservatives won a majority and in early 2016, Mr. Cameron made good on his promise and announced the date of a referendum.

[David Cameron]

I will go to Parliament and propose that the British people decide our future in Europe through an in out referendum on Thursday 23rd June.

[Narrator/Producer]

In and out campaigns revved up and immediately the out camp had an advantage.

[Economist Editor/Commentator]

I think it was still true in 2015, 2016, that most observers who knew about this subject thought that probably romaine would just edge it. I was always quite doubtful. I thought it looked as if it was going the other way.

[Narrator/Producer]

The Remain camp under the stronger in campaign had to argue that things should remain the same and let's together choose

[Daniel Franklin]

for stronger Britain in Europe.

[Narrator/Producer]

But Vote Leave could campaign on change. And they did so with some exceedingly misleading figures.

[News Reporter]

Every week the United Kingdom sends 350 million pounds of taxpayers money to the EU. That's the cost of a fully staffed, brand new hospital.

[Narrator/Producer]

So yes, Euroscepticism in a general sense was part of it. Arguments about who was bossing whom around, about the flow of money. But really a lot of the sentiment was clearly about the flow of people. Take for example, a Vote leave poster that Mr. Farage was pictured in front of. A sea of people on the move. Almost every one of them, Brown Channel 4 heard the dog whistle and took him to task.

[Nigel Farage]

The only white face has been obscured by text. Many people took that as deeply offensive. And I ask you again, do you want to take this opportunity to say sorry? Well, the Schengen Zone is at breaking point. That's undeniable. The picture was true, it wasn't doctored.

[Economist Editor/Commentator]

The irony in all this is that what then happened actually was that after the Leave vote, immigration actually increased. It didn't fall.

[Narrator/Producer]

The remain camp, Mr. Cameron, most business leaders us started out confident, complacent even, that their brand of good sense would win out. Then, ever sensitive to the benefits of a fair political wind, Boris Johnson hopped

[Economist Editor/Commentator]

on the leave bus that Sunday afternoon. He came out and said, I'm going to make my announcement, I am going to campaign for Leave. That was quite a big moment in the whole campaign.

[Narrator/Producer]

Mr. Johnson had been London's mayor during the 2012 Olympics and brought his charismatic, erratic vibe back into parliament in 2015 with an eye on higher office.

[Nigel Farage]

I think we should take the chance now as a country to take back control, take back control of huge sums of money. Of huge sums of money.

[Economist Editor/Commentator]

Given that the margin was, you know, only 52 to 48, I think it does suggest that, that Boris was quite an important factor in the outcome.

[Narrator/Producer]

Leave had momentum, a fiery message, a hard charging, floppy haired new champion. The opposition Labour Party had Jeremy Corbyn.

[David Cameron]

On a scale of 1 to 10, where 1 is, couldn't really care less about the EU and 10 is on jumping on the couch like Tom Cruise on Oprah. How passionate are you about staying in the eu?

[Daniel Franklin]

Oh, I'd put myself in the upper half of the five to ten. So we're looking at seven, seven and a half.

[David Cameron]

Oh, not quite.

[Daniel Franklin]

Maybe seven, seven and a half.

[Tom Carter]

You're More than welcome to jump on

[Daniel Franklin]

the couch if you want.

[Narrator/Producer]

The electorate was fractured, fractious Conservative against Conservative, labor against, well, itself mostly at the time. Families split, friendships strained. Can you believe what that guy next door thinks? Honestly, it was all anyone seemed to be talking about. Certainly the politicians. The voters though, did did have an answer for the Remainers.

[David Cameron]

The British people have spoken and the answer is we're out.

[Narrator/Producer]

Leavers rejoiced. Remainers couldn't pick their faces up off the floor. Nigel Farage crowed.

[Nigel Farage]

Let June 23rd go down in our history as our Independence Day.

[Narrator/Producer]

All this ferried in a new Prime Minister.

[David Cameron]

I believe Teresa will provide strong and stable leadership and I wish her well in negotiating the best possible terms for Britain's exit from the European Union.

[Economist Editor/Commentator]

Leave had won, so clearly we were going to have to leave. But nobody knew what that meant. There was no clarity about what would happen next.

[Narrator/Producer]

Theresa May took the reins for years of figuring out what that really meant.

[News Reporter]

Brexit means Brexit.

[Narrator/Producer]

Not much clearer really. This was the time when I started calling John long suffering Brexit correspondent. It's also when Britain's Prime Minister Go round started to speed up. Boris Johnson caught his fair wind and was in charge. When Brexit formally finally came into effect

[Economist Editor/Commentator]

in 2020, there was no chance of a soft Brexit. It was going to be a hard Brexit and Boris Johnson got the deal he wanted.

[Narrator/Producer]

Hard Brexit is a good word for what came out. It was hard has been hard for Britain and for Britons and of course for long suffering John. Pete.

[Rosie Blore]

To discuss what's happened since then, after those moments of apparently taking back control, Daniel and I are joined by Tom Carter, who's our Britain economics correspondent. Hi Tom. I know you weren't at the Economist at the time. Where were you?

[Tom Carter]

It was actually my last day at university when I found out about the result. And although we're about to talk about Brexit's damage, I do owe it a debt of gratitude because it did get me my first job out of university working in the civil service on Brexit preparations. So personally, it was a bit of a windfall.

[Rosie Blore]

We'll try not to hold that against you. Tom. Tell us what the impact on Britain has been from Brexit.

[Tom Carter]

When it comes to the economy, at least, the impact has been pretty negative. Exactly how negative is something that academics furiously debate over. Some studies suggest that it has shaven about 8% of GDP off. Other studies only suggest it's 2 1/2%. A lot of that depends on the counterfactual that you use. But what we can say is that Britain has grown less quickly than most G7 countries. And if you look beneath these high level numbers, you see all sorts of new frictions and problems emerge as a result of Brexit. When I speak to people and businesses across the country about it, people find it harder to import parts for their businesses. Exporters have stopped exporting for a long time. It stopped people from investing in their businesses. So it's been a whole series of little hurts and cuts.

[Rosie Blore]

So, Tom, it's sounding, from what you're saying, that the big impact then has been on manufacturing.

[Tom Carter]

Yes. And you know, we should be clear that Brexit has not caused Britain's manufacturing decline. That's been happening for a long time because China basically does it quicker and more cheaply than we do, and also because we have very high energy prices. But Brexit has made it worse. So Britain's share of global goods exports has fallen by 17% from the referendum to 2025. In the EU, it only declined by 6%. So we have been particularly affected. Now, why is that? Well, the Brexit deal actually didn't put up big tariff barriers with the eu, but what it did do is create a lot of paperwork and new customs forms and these things called rules of origin. And that basically was very hard for manufacturers, particularly small manufacturers, to deal with. So if you're a big manufacturer, you just employ some policy person and they sort it out. But if you're just a one man in his shop, you don't have the time to look for all the regulations. And that meant that we have now 16,000 fewer exporters to the EU than we did before the referendum.

[Rosie Blore]

What about services, which Britain always likes to think it's very good at, how have they fared?

[Tom Carter]

Well, the good news there is that Britain's services continue to go from strength to strength. So exports of services have, in that same time period, risen by 47%. And if you think about Britain, we are butlers to the world. We have lawyers, engineers, architects, all of whom are providing their services to tech tycoons, to sheikhs in the Middle East. And that hasn't changed as a result of Brexit. And in fact, Britain has benefited from the fact that the whole global economy has become more services orientated than it was before. But that doesn't mean that Brexit's helped. Brexit has actually hindered, because in some areas, like financial services, like things where you have Professional qualifications, and you need to be able to show that professional qualification to be able to work in the eu. We have seen less growth than in those sectors like advertising, where there are no such barriers. So without Brexit, we could have done even better.

[Rosie Blore]

And what about financial services, Daniel? You've been looking at this financial services,

[Daniel Franklin]

a bit of a mixed picture. I mean, the City is still a force to be reckoned with. And we had a cover story actually, not long ago saying the City was getting its mojo back. But as Tom says, I think the problem is that we haven't taken as much advantage of the Brexit potential flexibility that it gives us, not being part of the EU regulatory regime, to have more flexible regulations, to have bolder policies. So the strength of the City financial services have carried us through to some extent, but it has been hindered by the barriers, for example, passporting rules, setting up offices, being able to operate across frontiers that have made us less effective than we would otherwise have been. And we haven't compensated as much as we might have done by being bolder on the nimble deregulation that would have made business easier.

[Tom Carter]

And just to add in on that, that goes beyond financial services, this failure to do all the deregulation that was promised. We were promised that Britain would become a deregulated Singapore on Thames, but all the things that those people who wanted a small state complained about in 2016 to the EU, working time redirective, which sort of prevents or makes it harder for people to work above a certain number of hours a week, or the habitats regulation that makes it harder to build, all those things are still in place in the uk, because it turns out that it's not the EU that stopped us from having them, it's the fact there are powerful vested interests in the UK that politicians didn't want to cross.

[Daniel Franklin]

Yeah, we're pretty good at red tape ourselves. But you talked about the narrow economic impact, but the opportunity cost of all this, the time it took, the Civil Service time, the political time, the debate across the country, businesses tied up with this. It's enormously sapping. And it meant that we were talking about what type of Brexit it should be, first of all. And then after that, how do you mitigate the damage of it? And we're still talking about it. We're now facing endless negotiation with the eu. We'll have a summit next month, for example, for the latest round of this. And there's a cost to all that. It's meant that we haven't been able to lift our eyes as much as we perhaps should have been doing to cope with the world as it is now, the changed world that it is 10 years on from Brexit.

[Rosie Blore]

We're talking in quite energetic terms here about Brexit, but we're really bored of it, aren't we? We talk about it endlessly. We talk about it in our politics, we talk about it in society. What about that broader malaise that it's brought over Britain? Daniel?

[Daniel Franklin]

Well, there was a time talking about Brexit when it was almost banned. Political parties didn't want to talk about Brexit anymore. And it's just coming back. The anniversary has brought it back even more. And now with the drama over the Labour leadership, it's come to the fore again. But I think there is a continuing question about Brit Britain's place in the world. How do we, without a historical role of being a bit of a bridge between America and Europe, being within Europe, where do we stand on all that? And that's a bit of a national question still that Brexit has not resolved.

[Rosie Blore]

And we were hearing just now about those dog whistle posters that Nigel Farage and others put up. How has Britain stood on immigration since Brexit?

[Daniel Franklin]

Well, as we heard from the long suffering John Pete in the Brexit package, the irony of this is that there was a huge surgeon in net immigration after Brexit under the leadership of Boris Johnson. So that's now ebbed, but certainly with people who were hoping to take back control. In that sense, it just didn't happen. And that I think has contributed to the sense of political disillusionment in Britain, that even after Brexit, this which is a high priority for voters, it hasn't been dealt with satisfactorily.

[Tom Carter]

And just to give a sense of scale to that, in 2023 over a million non EU people came to this country. That is an order of magnitude more than we had before Brexit. So if you're sitting in one of these cities or towns in the UK and you were voting to take back control of immigration, you really were given a bloody nose by Boris Johnson and his immigration policy. Now, as Daniel says, it has ebbed, but that will have really left a sore taste in the mouth for many Brexit voters.

[Rosie Blore]

Tom, thank you so much for joining us.

[Tom Carter]

Oh, thank you very much for having me.

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[Rosie Blore]

Daniel if we accept that Britain probably isn't going to rejoin the eu, then what next? And I'm wondering here, have there been any benefits from Brexit?

[Daniel Franklin]

Well, there have. They may surprise you. We've identified, for example, that puffins have done rather well out of Brexit. That's to do with fishing rules that Britain has been able to introduce independently of the EU regulations, which mean that puffins have been more protected because Danish fishermen haven't been able to catch as many sand eels in British waters as before. And puffins, like sand eels and octopuses, have done rather well too. They've been deemed under British rules, not under EU rules, as sentient creatures. Actually, the farming reforms under Britain have been something of a success outside the common agricultural policy, and one manifestation of that is lots and lots of new hedgerow planted under the new incentives for British farming. So I think yes, there are Brexit benefits, but the bigger, perhaps silver lining is that in certain areas, the freedom to manoeuvre that Britain has might become even more important than it has been before.

[Rosie Blore]

We're joined now by Georgia Banjo, our Britain correspondent. Georgia, I'm looking to you for something beyond puffins and octopuses here. What other opportunities might there be for Britain?

[Georgia Banjo]

Yeah, I mean, he doesn't love a puffin hay. But as Daniel alluded to, beyond that, there is one particular sector that may have done rather well, and that is artificial intelligence. So if you have a look at British tech startups, for example, this year so far to date, they've already raised over 14 and a half billion pounds from venture capital. Now, just to put that in perspective, that is more than all the other major European markets combined with. So we're doing really well in that area. It's also true if you look at AI unicorns, startups that are worth more than a billion, And Britain has 33 of those, which is more than France, Germany and the Netherlands combined. So there are some areas where Britain is doing surprisingly well.

[Rosie Blore]

And is that success because there's no red tape, as we used to talk about the eu.

[Georgia Banjo]

Yeah. So if you talk to tech entrepreneurs as INRD quite a bit, they will tell you that the EU AI act is, is stringent, it's overly restrictive, and it's certainly true that it places quite a lot of restrictions on firms and also customers when it comes to AI. But I think it's a bit more than that. I think a big part of the benefits of Brexit so far in AI are just the vibes. It feels freer than it does in Brussels. The government has been more pro innovation than the EU and they've really lent on that as a way to sell Britain to many of the talented people around the world. That said, there are still some disadvantages when it comes to being outside the eu. If you're an ambitious firm, tech firms often scale very quickly. You're going to want to sell into the EU as soon as you can, therefore, you're going to have to comply with the EU's AI act anyway. And then beyond that, there are the obvious challenges which we've heard a little about before. So when it comes to hiring the best talent, for example, there's now quite a lot of hurdles there to overcome. There are the challenges of high visa fees if you're now trying to bring someone in from the rest of Europe. So one firm I spoke to recently explained that's one of the main reasons they're now opening an office in continental Europe.

[Daniel Franklin]

Georgia, can I jump in here? Perhaps nothing is going to matter more than AI in the world in the next few years, in the coming decade or two. But to put it into perspective, you were comparing Britain quite favourably with continental Europe. But when you look at Britain compared with America or China, we look very differently. We're a very small player in that context. So what is our role?

[Georgia Banjo]

It's a good point, Daniel. I mean, I've used a few flattering statistics there, comparing us to mainland Europe, but yes, it's true that we're definitely a minnow compared to America. So one area where we're not quite sure yet is exactly where the biggest benefits of AI will be. Lots of people have lots of different perspectives on that. What does seem possible is that the application layer, so that on top of the need to build data centers, you have firms like Nvidia that supply the chips. But that application layer is somewhere that Britain could be really well positioned to thrive in. And so that does go back to being better on regulation, creating an environment where firms can thrive. I think, most importantly, making sure that AI is useful to people and that people can see tangibly the benefits that AI can have in their lives. And there's a lot of fear at the moment about AI, and I think showing people that AI can improve their lives, improve their healthcare system, make their lives easier, is really important.

[Rosie Blore]

DANIEL it can't just be about AI. We don't quite know what will happen and we don't know quite what opportunities Britain will seize. What else is there for Britain to do to take advantage of the post Brexit world?

[Daniel Franklin]

So if you look at the way that the world has changed over the past 10 years since the Brexit referendum, I think the two areas that really stand out, the other is defence. We're in a world where Britain's and Europe's, indeed security looks very different than it did before. We have a much more assertive Russia. We've had a war in Ukraine that's lasted longer so far and counting than the Second World War. And we have an administration in America which has semi detached from Europe and is wanting to focus much more on its great power rivalry with China. And that makes for a lot of uncertainty over the defense of Europe. So this is an area where Britain in theory have a role to play. It is also an area where, by the way, I think the British government has inserted itself at the high table again in Europe in a way that was very difficult in the immediate aftermath of Brexit. It's not without its problems, not being an EU member, but it is an area where I think Britain can use its flexibility, its historical strength. But as we've just seen in recent days, it's not simple either because we find it difficult to raise the money to match our strategic thinking on the issue. And we've had under Keir Starmer's government, the Defence Secretary resigning because he didn't get the financial settlement that he was pushing for investment in defence. So defence and AI, I think, along with areas of traditional British strength like finance, are critical areas that will matter with Britain outside the EU and potential opportunities in all those areas in the years to come.

[Rosie Blore]

And of course, we're about to have a new British Prime Minister. What should that person do?

[Daniel Franklin]

I think what we've seen in the whole Brexit saga is a tendency towards magical thinking. The idea that there's a simple solution, we just do this and then we start to solve our problems. You just leave and we take back control, you just rejoin and you undo the economic harm of Brexit. And there's a bit of a danger that on the labor end of things now, you just changed Prime Minister and your problems magically go away. The problem was Keir Starmer and you have a more charismatic, better politician in that role and you start to get on the path to growth and to national self confidence again. I think that the main thing that any new Prime Minister coming in needs to do is have a bit of an honest reckoning with where Britain is and the challenges that it faces.

[Rosie Blore]

Brexit has ended up posing a generational problem for Britain and for the whole of the European Union. What's the next generational question?

[Georgia Banjo]

Well, maybe I'm biased because I cover it, but I do think that how the world reckons and indeed makes the most of AI is going to define the coming decades. And I think a big question for a relatively small country like Britain is how does it find its way? Daniel spoke about Britain finding its role in the world. And I think that's more important than ever. Because if it doesn't do that, if it doesn't find ways to make itself strategically important, there is a risk that some of this mayhem continues as we struggle to find a place in this place very quickly changing world.

[Daniel Franklin]

I think George is absolutely right. What's interesting about it is that it's also, as we discuss here, fascinating how little these questions depend on British membership of the European Union. So it's not to belittle the importance of Brexit, its aftermath, or indeed the question of what our ongoing relationship with Europe is. But it's not the biggest question facing Britain today.

[Rosie Blore]

Georgia, Daniel, thank you so much.

[Daniel Franklin]

Thank you, Rosie.

[Georgia Banjo]

Thank you, Rosie.

[Rosie Blore]

And that's all for this episode of the Intelligence. If you're listening and have any thoughts on Brexit or anything else you've heard on the show, please do email [e-mail] we'll see you back here tomorrow.

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