Read the Conversation
Meeting Highlights:
- Post-Brexit Economy – Trade has rebounded, but investment lags due to long-term stability needs. Immigration rules and network losses challenge the UK’s service sector.
- Regulatory Barriers – Uncertainty in climate, chemical, and trade policies complicates business. Partial EU alignment aids trade but limits UK influence. Customs remain a hurdle, especially for food.
- R&D Strength – The UK attracts talent with top research hubs, flexible labor laws, and a data-driven healthcare system. Balancing healthcare investment remains a challenge.
- Market Entry Support – The Chamber connects businesses, handles admin tasks, and eases regulatory burdens for UK-German trade.
- Global Positioning – The UK is redefining its role post-Brexit, aiming to be a bridge between the EU and the US while leveraging its trade flexibility.
EF: How do you assess the current landscape regarding bilateral relations and the investment environment, and what are the current priorities on your agenda?
UH: Since the Brexit referendum, there’s been a lot of uncertainty on both sides. Businesses thrive on predictability, and that wasn’t the case for years. It wasn’t until Brexit officially happened, first politically on January 31st 2020, then commercially at the end of that year, that clarity emerged. So, for the past four years or so, things have settled to some extent. That initial uncertainty impacted investment, and some supply chains had to adjust. But over time, things have started to normalize. Of course, COVID-19 also played a role, which made it easy for both sides to argue their case. Brexit supporters could blame disruptions on the pandemic, while opponents pointed to Brexit. In reality, both had an impact. COVID-19 likely had the bigger short-term effect, while Brexit continues to shape things long-term.
Trade tends to be more short-term and has largely returned to pre-Brexit levels. Investment, however, is a different story; it requires stability and long-term planning, often over 5, 10, or even 15 years, depending on the industry. When Brexit finally happened, companies had to adjust to new trade barriers and administrative requirements. Logistics firms had to adapt, businesses had to navigate new regulations, and while these changes added some costs, maybe 1–2%, depending on the sector, have been manageable. The bigger challenge is that the UK’s economy is heavily service-driven and networked. Businesses rely on bringing people together quickly, often across borders, which isn’t as simple as adjusting paperwork. That’s the real long-term shift that companies are still figuring out.
Since Brexit, the UK no longer has freedom of movement, and immigration rules have tightened. Visas are now required for many activities, and they're not issued on the spot, which has made the UK less attractive for certain things. This has distanced the UK economy somewhat, and while it's not a major short-term issue, we're seeing longer-term effects. The long-term impact is that when you're no longer part of a network, certain opportunities don't happen. From a trade perspective, Brexit negatively affected UK-EU and global trade, particularly in goods. Services trade hasn't seen much disruption, but goods trade has struggled due to customs procedures and administrative barriers. The UK was once deeply integrated into European supply chains, with certain products finalized in the UK before being exported worldwide. With added complications, some of these activities have moved elsewhere.
That said, the UK economy hasn't collapsed far from it. While Brexit is estimated to have reduced potential growth by around 4–5%, the economy has continued to expand and, in some cases, has outperformed parts of the EU, especially Germany. The EU's overall growth has been stronger due to rapid Eastern European development. Brexit has also given the UK more flexibility in shaping its trade policies. For instance, while the EU decided to impose tariffs on Chinese electric vehicles, the UK opted not to, allowing it to adjust its approach based on its interests. As global dynamics shift—with the war in Ukraine and the Trump administration's policies—the UK is working to position itself as a key link between the US, Europe, and Ukraine. This could enhance its political standing and create economic advantages, particularly in the defense sector, where increased European military spending may benefit the UK more than some EU nations due to its close ties with the US. While Brexit has led to lost opportunities, the UK has adapted. Any future growth challenges will likely be more about internal policies than Brexit.
EF: Are there any specific other trade hurdles that could immediately impact investment in the UK?
UH: Regulatory certainty is a big issue, especially with all the geopolitical shifts. For example, it's unclear how climate regulations will evolve and whether targets will be loosened or tightened. The carbon border adjustment mechanism is another area of uncertainty. Companies prefer regulatory alignment between the UK and the EU to avoid producing under two different standards, particularly given the UK's relatively small market. Chemical regulations have also posed challenges, requiring companies to re-register substances under UK REACH. However, some progress has been made in easing regulatory burdens. A positive step has been the UK allowing most products to use the CE marking, meaning UK manufacturers can produce under EU rules. This helps UK companies access European markets and vice versa. However, this also means the UK has become a "rule taker," accepting EU standards without a say in shaping them, something Brexiteers never wanted but has happened in practice.
Customs formalities are still a big challenge, especially for food and agricultural goods that need health checks. A phytosanitary agreement could make a real difference by cutting down on border controls, but it would mean the UK either aligning with EU standards or being seen as equivalent. The catch is that this might involve the European Court of Justice, which many Brexit supporters were against. It's a tricky balance, but finding a solution could smooth trade flows.
Northern Ireland remains a unique challenge due to its status in the EU single market for goods. This means that goods moving from Great Britain to Northern Ireland require different handling, especially for animal products. Since the entire island of Ireland is treated as a single entity for animal health purposes, border checks are necessary. While the Windsor Framework has improved the situation, further alignment, particularly a phytosanitary agreement, could ease trade disruptions. However, the UK rejoining the customs union or single market is off the table, as Keir Starmer has ruled it out, along with any major easing of free movement. The focus will likely remain on regulatory alignment in areas that make trade easier and where progress can be made.
EF: What makes the UK attractive from a research and development perspective?
UH: The UK is a global research hub, and the English language plays a big role. The country has always been open to international expertise, making it easier for top researchers worldwide to come and work there. While Germany and other European nations also have excellent universities, the UK's language advantage, strong research clusters, and size make it particularly attractive. Size matters, too; larger research clusters tend to thrive, and the UK's flexible labor market helps. Top researchers don't need heavy employment protections; they want the freedom to move where opportunities are best. This flexibility is especially valuable in sectors like pharmaceuticals and high-level financial services, where talent is highly mobile and in demand.
Another interesting area is data protection and how it impacts research. The UK takes a more practical approach than countries like Germany, where strict data rules sometimes make sharing medical information more difficult. The NHS, despite its flaws, has a massive health database that supports large-scale research. This helps with clinical studies, identifying what works, and improving healthcare efficiency. While no system is perfect, the UK's flexibility and data-driven approach offer some valuable lessons for others. This helps with clinical studies, figuring out what works, and improving healthcare efficiency. With over 100 health insurers and tight data rules in Germany, sharing information is more complicated, which can slow things down. It's worth noting that, even with its challenges, the NHS has achieved outcomes like higher life expectancy than Germany. That's something other countries might learn from. Of course, no system is perfect, but the UK's flexibility and data-driven approach offer some valuable insights.
The current government is facing a tough challenge in healthcare. On one hand, they want to reduce waiting lists, which requires investing in hospitals, doctors, and immediate resources. On the other hand, they're pushing for more preventative care and community-based services, which are cheaper in the long run but take time to show results. Given the current financial constraints, it's nearly impossible to commit to both at the same time fully, yet politically, they have promised to do so. How they navigate this trade-off will be key.
Another aspect is the role of personal responsibility in healthcare. There needs to be more honesty in the system about what the NHS can and cannot provide. A good example is cases where patients are asked to make lifestyle changes before receiving treatment. For instance, a neighbor of mine, who was significantly overweight, was told she needed to lose almost 30 kilos before qualifying for knee surgery. This situation brings up an important point: while healthcare should be accessible to all, individuals also need to take responsibility for managing their health. Striking the right balance between public support and personal responsibility could be a promising direction for the healthcare system to explore. It's about empowering people while still providing the care they need.
EF: How do you facilitate entry into the British market in terms of your value proposition?
UH: We don’t just see German companies doing business in the UK. It goes both ways, with British companies expanding into Germany as well. Our role is to support them in a few key ways. First, we’re often the first point of contact when businesses want to explore new markets. We help them find potential partners, agents, and opportunities. Then, when it comes to investment, we connect them with the right people for location searches and business setup. Once they’re established, our network plays a big role. Whether helping UK employees understand German business culture or supporting German executives adjusting to the UK market, having a trusted group to exchange insights is invaluable. It’s not about trading secrets. Beyond that, we help companies with practicalities like VAT obligations and payroll management, especially for smaller teams. This lets them focus on growing their business without getting bogged down by administrative hurdles. Many medium-sized companies want to expand in the UK but don’t want to be slowed down by paperwork. We handle the back-office tasks so they can concentrate on what they do best. While we’re not experts in every industry, we specialize in handling the operational side so companies can focus on what they do best.
EF: When you reflect on your time working in the chamber, what are your key memories? What key moments come to mind?
UH: When I started here, it was during the Blair years, a time of shifting social policies. As I always say, it was about offering a hand up, not a handout, empowering people to improve their lives. Some Social Democratic parties in Europe tried to follow that approach, which was an interesting intellectual shift. In a way, it was completely different from Margaret Thatcher's era, though both brought major changes. If I had to name the most impactful UK prime ministers since World War II, it would be Thatcher and Blair, though from very different political angles. Both brought new ways of thinking that didn't just shape the UK but also influenced Europe and beyond. It shows how the UK can be a thought leader. It's a dynamic trading nation that thrives on flexibility and seizing opportunities. The Blair years and the Brexit era were particularly interesting because they forced the UK to redefine itself socially. Brexit happened, and regardless of whether people regret it now, the focus has shifted to how the UK sees itself: as a European nation or something distinct. Given the current geopolitical tensions, it's interesting to see how the UK will define its role on the global stage. Keir Starmer's strategy is one to watch. He's trying to position the UK as a bridge between the EU and the US, leveraging the country's historical, cultural, and language ties. It's a smart move; it could be a real win. In today's world, we need all the bridges we can get.
