It was clear that a lot would change after Brexit and Hungarians would also be affected by it

Portfolio
It was already clear that Brexit will lead to a host of changes, but the most important thing for everybody is that the United Kingdom managed to come to an agreement with the European Union, the UK’s new Ambassador to Hungary told Portfolio in an interview. Paul Fox stressed that the changes will inevitably have drawbacks. One of these is that studying in the UK will be more expensive even for students from the European Union, and it will be more difficult even for EU citizens to work in the UK. In respect of a wide-scale criticism of Hungary’s deficiencies in terms of the rule of law, Fox said it is not for him to lecture other countries, stressing that he believes in dialogue instead of ‘megaphone diplomacy’.
paul fox

How would you evaluate the Brexit agreement reached just before Christmas from a British perspective? Have you achieved the goals your government had set after the 2016 referendum? According to EU analysts, the community’s position and negotiating strategy have essentially prevailed.

It’s a deal that is satisfactory for both sides. I don’t see it had been about winners and losers. What I see is a deal that allows us to create a partnership. All of us were really pleased with this deal that both sides wanted, but the point was if there hadn’t been a deal that would have created a difficult situation for all of us.

The key thing about having a deal is we have something to build on, we now have a foundation.

The point is the UK has left the EU and its institutions. That reflects what was expressed by the British people in the referendum in 2016 and was reinforced in the election of 2019. So the British government has, with a mandate from the people, achieved that aim of leaving the European Union.

paulfox_britnagykövet

Photo by: Ákos Stiller/Portfolio

We’ve left the EU but we haven’t left Europe. The UK is historically and culturally part of Europe, we just didn’t want to be part of the EU.

And this government is very much focused on national sovereignty. They had a mandate from the people in the election of 2019 to ensure that sovereignty was respected in relations to the EU, and that has been achieved.

What I’d rather do is look forward, to be honest. Look forward to build a new partnership with the EU, but in particular with all the countries of Europe. One of the opportunities that comes with our exit from the EU is a possibility of thickening our bilateral relationships, with countries like Hungary, for example.

I see real possibilities with Hungary but also with the region as a whole, because we do have a lot of shared interest and a shared concerns with this part of the world, let it be Poland, Hungary, Slovakia or Czechia. I think there’s a real scope there to develop a strong relationship with the V4.

Are the British people happy with how the Brexit deal turned out if view of what they had voted for in 2016?

The question is does it respond to 2016? Yes it does. It also responds to the mandate the government got in 2019. The election in 2019 gave the government a very clear direction, as to where it should go. The Conservative Party campaigned on the slogan of ‘Get Brexit Done’. I’m not going to argue,  that has been achieved very substantially we’re no longer part of the Single Market, the customs union, the EU institutions.

 
paul fox_britnagykövet

Photo by: Ákos Stiller/Portfolio

Time will tell. Let’s see how the deal is implemented. And, of course, the government will be held to accounts at the next election. That is the key opinion poll, the next election which is due in 2024.

Throughout the talks, the British government kept emphasising the importance of national sovereignty. The process undeniably had some rough patches, and the deal once almost flopped on the Northern Ireland issue. Then fishing rights had to be adjusted and a potential independence of Scotland remains an open issue. In view of these factors, would you insist that British national sovereignty was observed in the deal?

I think it was genuinely felt. When Lord [David] Frost gave that speech in Brussels in March or April last year, he laid down in the clearest possible terms that his negotiation approach was heavily based on a notion of taking back sovereignty. And that framed the British position towards the negotiations right after Christmas Eve. So it wasn’t a rhetorical phrase, it was a substantial part of the UK’s negotiating positon. 

You mentioned Scotland. The point is this a deal for the UK, it’s not just for various component parts.

We are all very much of the view that this is a good deal for the whole of the UK, whether it is England, Scotland or Northern Ireland.

Sure, in Scotland there will be elections this year if they are not delayed by the pandemic. The Prime Minister has made it clear that he is also the minister for the Union. He’s a strong unionist and I am too; I think we are stronger together. One of the points Boris Johnson made in terms of another referendum about Scottish independence in 2014 that we should revisit these types of key questions once in a generation. There was a 40-year gap between the referendum on the EU and Scottish independence. The Prime Minister suggested a 40-year gap between referendums on Scottish independence. (Editor’s note: Two referendums on devolution were held in 1979 and 1997, with a devolved Scottish Parliament being established on 1 July 1999. In the 2014 referendum, 55% voted against leaving the UK.)

As regards Northern Ireland, the withdrawal agreement reinforced by the deal, the trade co-operation agreement is designed to ensure that there’s no hard border, that the Good Friday Agreement is protected. We’ve seen some issues in the New Year, but the implementation of the trade co-operation will create issues, the point is we have a basis by which we can discuss them with the EU to smooth them out.

I’m convinced that for Northern Ireland this will work, above all it will protect the Good Friday Agreement that will ensure peace and stability in the island of Ireland. 

Fisheries, well, that was a sticking point because it is really important to both sides, I mean for British, French, Belgium, and Dutch fishermen. Economically it’s not that significant but it’s still sensitive. I think the 5.5-year transition period which allows fishermen from major European countries access to British waters, while at the same time thinking about what would happen after the transition period, going into something say similar the EU has with Norway on fisheries, for example. It takes some heat out of the topic, creates space for negotiation and to approach that issue in a more reasoned fashion.

The new trade agreement, touted as zero tariffs and zero quotas, only covers products made in the UK to a certain degree. Apparently, many businesses have just realised this early this year, leading to substantial disruptions in trade. Could these developments lead to a realisation in the UK that Brexit was harmful after all and the country should not have left the EU if these were the best conditions the government could secure after all these years?

The referendum gave you a clear steer which was reinforced by the election we had just over a year ago. I see no indication nor any appetite amongst the political class or amongst the society in general to revisit the whole issue of EU membership. 

I don’t think there’s any prospect of the UK revisiting EU membership in my lifetime.

In respect of the issues you talked about, e.g. those at the borders, etc.,

the British government certainly made it clear at the end of last year that things would change. We’re leaving the Single Market, the customs union and this brings change with it.

But we wanted a deal to ensure that there’s as little disruption as possible, but there will still be change. Business in the UK was strongly encouraged to prepare for it. But, of course, it was difficult when we didn’t exactly know what we were dealing with. It will take time to adjust.

But, going back to my original point, by having a deal there’s will on both sides to make it work, which means that over time implementation should smooth things out to allow for the intent of the deal to become the reality, so that zero tariff, quota-free trade between the UK and the EU happens and is reality.

paul fox_britnagykövet
Photo by Ákos Stiller/Portfolio

When the Scots voted in 2014 to stay inside the UK a referendum on Brexit was not even contemplated. Now many Scottish voters are reportedly reconsidering their stance on separation, as after Brexit the UK no longer looks like a safe option for them. In view of that, how united would you say the United Kingdom really is?

You’ve got to remember that we are a United Kingdom. There isn’t a separate Scottish country, a separate Welsh country. There are regions and there’s devolution. One of the great constitutional changes that has taken place within the UK in the last 25 years has been devolution, which devolves some responsibilities to the Scottish, Welsh parliaments and the Northern Ireland Assembly. 

But we are a state, we’re not a confederation or a federation, we are a unitary state. The UK Parliament in London is sovereign and it represents the entire UK. So is the United Kingdom united? Yes, it is, from a constitutional and political point of view. Do we recognise differences, social, cultural? Yes, we do. But we have a devolution settlement which was set up in order to recognise those differences and to devolve responsibilities to those various assemblies and parliaments I’ve mentioned.

You always want to be careful with these nationalist language which want to present the different countries of the UK as being in some way part of a federal state. We’re not a federal state.

Hungarian Prime Minister Viktor Orbán said early in December, when UK authorities had already approved the Pfizer vaccine and the EU had not, that the UK was able to take action to secure a vaccine swifter due to Brexit. Do you agree? Would you encourage other member states to leave the EU?

It’s not a question of whether it’s right or wrong. It’s a question of the fact that it’s different. We’re no longer a member of the EU and its institutions, and we have the freedom to apply our own approval processes, for example, for the various vaccines. It’s just different. In terms of what other countries want to do, that’s entirely a matter for them.

It’s not for us to lecture, advocate or encourage a certain policy in another country in its relationship with the European Union. 

The Brexit agreement signed before Christmas does not provide for the EU service opportunities of the British finance sector (equivalence, passporting), so UK firms have lost their access. When do you think a breakthrough could be expected in this area?

There’s about 200 pages of the 1,260 pages that do deal with financial services. But basically it’s an area which will become a basis for future discussion. Discussions are taking place now about an MOU to be in place by March. Financial services is another huge topic. The only thing I would say with absolute certainty is that London will remain a major world financial centre. It was a major world financial centre before we joined the EU and it will remain so after we leave the EU. By virtue of its location, its history, the nature of regulation, the rule of law that applies in London it will always be an important financial centre. Of course, we want to have good arrangements with the EU. It will be a topic of future discussions.

Will British businesses relocate to mainland Europe en masse after Brexit? If so, could Hungary benefit from this?

I’m not entirely convinced that there is going to be a mass relocation of companies, simply because what I’ve said just now – London remains important. We would have seen very strong evidence by now and there isn’t any.  The key Japanese and American banks are still there and, of course, UK financial institutions are also extremely strong, and they are going to stay there. Whether Hungary could be a place for such companies to relocate or to set up business, I can’t say. Hungary has plenty to offer and it already offers financial services. Companies look at their location all the time. They’re always moving.

The agreement also does not provide for the mutual recognition of university degrees, leaving rather large uncertainty in this regard. What would you tell Hungarians who have gained a degree in the UK and now want to naturalise that degree or the other way around? What are the opportunities for recognising foreign degrees in the UK?

The qualifications of EU citizens who were working in the UK before 1 January 2021 remain recognised. After 1 January they’ll have to ensure that their qualifications are recognised by the appropriate UK authority. That is the change.

I terms of education, we left ERASMUS because we found it expensive. I’d like to see a continued exchange of students. I think UK universities remain attractive. Also, one of the changes that took place was foreign students who are offered a place in the UK can remain in the UK after qualifying to work. I think that’s a significant change.

The various governments of the EU can think of their own schemes in order to give scholarships to students who want to go to the UK, but I accept that it is change. I’d like to see more Hungarian students go to the UK, but if it becomes more expensive, I can understand why that’ll be an issue.

How can trade between the UK and Hungary develop after Brexit? Will the agreement reached affect the exports of Hungarian businesses in any way?

I see no reason why the trade co-operation agreement should negatively impact UK-Hungarian trade relations. In fact, I do see plenty of opportunity to develop the areas where the UK is strong in Hungary, automotive supply chains, financial services, services in general, retail. Tesco is not going to leave Hungary, it will remain a major player here. Surely, I’ve heard rumours and they’ve left Poland but that’s another issue.

I actually do see great opportunities, particularly in the post-Covid era. I think we can have a green recovery following Covid which has a significant economic impact on all our economies. But that does offer an opportunity coming out of the pandemic to do things differently, to recovery in a different way. There’s a good opportunity here to get something good out of the awfulness of the pandemic, and that is green recovery. A real area of opportunity between the two countries can be in the science and technology field. You’ve got some very good institutions here, we’ve got some very clever people here. I’m sure that with our companies and your expertise we can work together in terms of applied scientific and technical responses to the pandemic as we recover.

What industries in Hungary do you see potential in and would recommend to British companies? Do companies interested in a certain market ask for advice from the relevant embassy in the target country?

Companies always show great interest in new opportunities, but in the current situation most small and medium-sized enterprises, as well as the bigger players is obviously impacted by Covid. I think very company at the moment are being very cautious and basically focusing on survival and maintaining their position rather than expansion. I think one area which could be of interest is the medical and health areas. There’s an interesting pharmaceutical base here. 

pualfox_britnagykövet
Photo by Ákos Stiller/Portfolio

Ever since Hungary joined the EU in 2004, the UK has been one of the most attractive destinations for Hungarians that immigrate to Western Europe. The official figure of Hungarians living in the UK is around 100,000, according to the Office for National Statistics (ONS), while others, including Portfolio, estimate that the actual figure could easily be double of that. How many Hungarians do you think live in the UK currently?

Who knows? I would base my knowledge upon the number of those Hungarians who have registered in the UK under the scheme […] 112,000 Hungarians have signed up, as of late September 2020. There may well be more Hungarians living in the UK. If there are and they want to stay, I’d encourage them to register. It is a very straightforward process.

Maybe lots of people will wait until the last minute. The application deadline is 30 June 2021. I don’t know of any plans to extend it.

As of this month, EU citizens need to go through a point-based system to work in the UK. What are the base elements of the criteria?

You need to have an offer of a job. What salary you are being offered? What qualifications are required? Your ability to speak English. With students it’s about having an offer from a reputable institution. The idea is that you need to get 70 points. It’s all on the website.

For example, if you have a job offer, that’s 20 points, another 20 is if you have an appropriate skill level for the job and another 20 if your salary there would be over GBP 25,000 per year. That’s 60 points already by meeting three requirements, you’re almost there.

Yes, but if you live in Hungary, it’s hard to get a job offer from the UK. It rarely happens. You need to travel there, rent a flat, go to job interviews, etc.

Yes, I appreciate that, but again, one of the realities of us leaving the EU is that it also brings to an end the freedom of movement. But it doesn’t just apply to Hungarians, EU citizens, it applies to all foreign nationals. They all now have to abide by this point-based system. It’s egalitarian in that respect. But you’re right, it’s different, it’s not as it was.

Do you think Eastern European workforce, not just Hungarians, but Polish, Slovak people too, will repatriate or pick another EU country as a consequence of Brexit?

It’s an individual choice. But as I’ve said before, it’s going to be different. It will take time for people to adapt to. There isn’t an expectation or a target or a desire for people to leave.

Do you think that because of Brexit unskilled Eastern European workforce will be replaced by skilled workforce? Can Brexit boost brain drain from Hungary, for instance?

There is that possibility but one could argue that under the freedom of movement brain drain was much easier and not just to the UK. Hungarian professionals go to other parts of the EU, e.g. Germany or Austria. In terms of skilled versus unskilled, the way the point-based system is we want to attract the brightest and the best, for sure. There’s a premium on attracting highly qualified people to go into jobs which require those qualifications and their skills.

I can see real opportunities or demand in health care, services, and once we get back on our feet following the pandemic, hospitality.

Are you concerned that uncertainty due to Brexit and tighter work requirements could lead to a serious labour shortage in the UK?

I don’t think there will be a labour shortage in the UK. You mentioned uncertainty. I think the whole point of the trade co-operation agreement is to provide business with a degree of certainty, and I think it does. It allows them to think ahead, to be able to trade with confidence with Europe.

Unlike the EU and the U.S., the UK rarely speaks up in issues regarding democracy and the rule of law. How do you see democracy and rule of law in Hungary? Do you think at least some of the criticism is justified?

First things first. I don’t think it’s my job and I don’t think it’s appropriate for me to lecture Hungary as to what it should do.

The UK and Hungary are sovereign equals. I think we have a good relationship, and in terms of having a good relationship it’s being able to have an open, robust and honest dialogue. And I think we do. We won’t agree on everything but I’ve never been a fan of what I call ‘megaphone diplomacy’. What I believe in is having a pragmatic and honest exchange of views, more likely in private.  

There are times you do need to have a more vociferous, a more public exchange of views. But that’s often with countries where you cannot engage. Most recently it was Russia following the Salisbury poisonings where we weren’t able to engage with Russian authorities. Let’s be honest […] economical with the truth about the role they played in the crime of poisoning British citizens in the UK. And we did push for international sanctions and international co-operation in order to show Russia that this behaviour is unacceptable.

That just isn’t the situation within the EU. We also sign up to a set of values, we are also democracies. We all share the same interests and values, we are all members of NATO. We have our differences. There are differences within the EU about rule of law. The point is there’s an opportunity to engage in dialogue.

paul fox_britnagykövet
Photo by Ákos Stiller/Portfolio

The United Nations will hold its 26thclimate summit in Glasgow this year. Will the UK set independent goals after leaving the EU or will it follow the bloc’s lead?

We have done already, in a sense that there was a climate ambition summit on 12 December; it was an online discussion. There are NDCs, Nationally Determined Contributions, which are the targets you’re setting for yourself. What we said on 12 December is that we would reduce our 1990 rates by 68% by 2030. The EU’s target was 55% and there’s a discussion within the EU about burden sharing. We’ve gone beyond that. It’s an ambitious target.

We’re going to use the conference in Glasgow at the end of this year in order to really push for increased international co-operation dealing with the challenge of climate change. Because it is a crisis we’ve got to confront.

The less action we take over time, the greater the risk of the catastrophic impact on climate change. So it is existential.

While responding to climate change we can also still have economic which thrive and prosper. The pandemic has changed a lot of things. I don’t think we are going to go back to where we were before. I’m not sure how it will change permanently, but I wonder about whether we’ll travel as much as we did before, whether air travel will recover to where it was before. It’s less of a problem here in Budapest, but in other cities do need to worry about air quality. If people notice that better air quality is the consequence of the pandemic they won’t want to go back to how it was before. Will we need big offices in the future, if you can achieve so much from home? Why should we invest such a huge amount of money in physical infrastructure when we can do it in other ways?

Cover photo: Ákos Stiller/Portfolio

More in Economy

orbán viktor
September 20, 2021 14:37

Hungary's Orbán: Child-raising families to be refunded personal income tax by 15 Feb 2022

Continues to address fourth wave in pandemic as a future event

koronavirus vakcina
September 20, 2021 13:53

COVID-19: Over 1,000 new cases, 13 dead over the past three days in Hungary

3rd doses of COVID-19 vaccines double of 1st and 2nd doses combined

világ globe
September 20, 2021 09:25

The long-awaited moment finally comes this week

We will find out where the world is headed in the following years

forint ezres
September 20, 2021 09:16

Hungary cenbank to make another crucial call that could determine HUF trajectory

What will the Monetary Council do this time?

koronavírus maszk
September 20, 2021 08:57

What makes pandemic management successful?

What can Hungary learn? – Expert opinion

maszk koronavírus getty stock
Free
September 17, 2021 15:02

COVID-19: 479 new cases, 5 deaths in Hungary

Number of hospitalised patients keep on rising