Ekonomus has interviewed Natasha Meah, director of Europe Business Finance (EBF) Consulting and member of the Lanzarote Chamber of Commerce, and Daniel Trigg, president of Lanzarote Business Association, which brings together most of the British business owners on the island.
In recent months, various surveys, both public and private, show that the majority of British people regret Brexit. In the latest barometer in the United Kingdom, 58% of citizens regret the decision to disengage from the European Union. At an economic level, the negative effect on macroeconomic figures is estimated between 3 and 6% of British GDP.
For British residents of Lanzarote, the largest community of foreigners on the island, the concern about Brexit does not focus so much on macroeconomic issues, but rather on the difficulties that leaving the European Union has generated in their daily lives. Obtaining a work permit, validating a driver's license, paying double taxes on their properties, or their children not being able to participate in the Erasmus program, are also consequences of Brexit.
Natasha Meah was born in Shropshire, near Birmingham, and has lived in Lanzarote for half of her life. Daniel Trigg is from London and arrived 36 years ago. Like four million other British people who had been outside the United Kingdom for more than 15 years, they could not vote in the referendum, but they are witnessing how Brexit has changed the lives of their compatriots in Lanzarote.
The new limitations are progressively affecting British people who have grown up in Lanzarote, such as when leaving for Erasmus. Spanish law does not allow the children of British people to take Spanish nationality at birth. "The son of a friend, who has grown up on the island with a British passport, is studying in Seville and when he reached the third year, he wanted to do an Erasmus in Germany, but he has not been able to do so because, as he is not a citizen of the EU, Germany also sets that limit of 90 days in the last 180," explains Meah.
"Greece has signed a direct agreement with the United Kingdom by which a British person can arrive in November and return to the United Kingdom in April," explains Trigg, who emphasizes that this is not possible in Spain due to the 90-day limitation.
"It could be changed" in Spain too, and it would already "be an advance", he continues, although he wonders if the politicians will be able to solve it. "If they still haven't been able to solve the validation of driving licenses...". With the exit from the EU, the agreements on traffic matters ceased to be valid for driving licenses issued by the United Kingdom. Now only a bilateral solution would be possible.
The greatest difficulty is getting a work permit
But the greatest difficulty among those they relate is getting a work permit. The current legislation makes it extremely difficult for British people who arrive in Lanzarote to work. "We are seeing problems in academies and schools; the island councils had signed an agreement so that native British people could be assistants in English classes in schools. That has stopped," explains the director of EBC Consulting.
Meah emphasizes that this situation "aggravates the problem of many restaurant owners who cannot find workers." An even greater problem for "those who require native English speakers," she highlights.
"The economic wheel is going to start slowing down"
Regarding British investments, Meah highlights that, as stated in the latest barometer of the British Chamber of Commerce in Spain, "corporate investment from the United Kingdom has continued to increase in recent years" despite Brexit. However, with the focus on the British middle class, Trigg explains that the purchase of homes in Lanzarote for less than 200,000 euros by British people has fallen by 45%.
"British people with properties in operation in Lanzarote now have to pay 24% on the income generated, without the possibility of deducting any expenses," explains Meah, who highlights that before Brexit they paid 19% on the difference between income and expenses. Trigg calculates that the legislative change for his compatriots ends up meaning that they pay "double the taxes".
Trigg anticipates that in the coming months there will be "many homes in Lanzarote that cannot be sold." "One or two-bedroom apartments, which were bought by the British middle class, many retirees, to stay 8 months a year. When they died, those apartments returned to the market and could be acquired again by working people from the United Kingdom with normal salaries."
"The economic wheel is going to start slowing down." "Those people can no longer buy them," clarifies Trigg, because "without half a million euros of investment in housing they don't give you residency and if you don't have 60,000 euros in the bank account, you can't get a non-lucrative visa." The non-lucrative visa allows residency in Spain for one year, renewable every two years, but does not allow its beneficiaries to work.
Meah believes that Spain could create an exceptional visa for people who have properties in the country and thus reduce this problem. Despite the fact that a negative effect is not yet noticeable in the tourist figures, since the arrivals of British people to Lanzarote are still around 55% of the total, Meah and Trigg agree that Brexit will end up meaning a reduction in British tourism to the island.
Trigg believes that the virtuous cycle by which formerly "a British person arrived on vacation and then decided to stay to work or start a business" will no longer be possible, which led to "visits from friends and family, who in turn decided to stay."
Meah has her particular vision on the matter, as she considers that if the spending capacity in England continues to decline, it could paradoxically also have a positive impact on Lanzarote. "Fewer all-inclusive tourists will arrive" and "travelers with greater purchasing power" will have more prominence, who spend on all kinds of activities, in line with the strategy of the Island Council and the business owners of the sector.
"Brexit is transitional"
Meah finds it difficult to make a forecast on whether the United Kingdom will return to the European Union: "I don't know, I don't think anyone really knows, first they will have to admit that they were wrong and they are very proud" (referring to the members of the British Government).
Trigg is clear that although "there will never be another referendum, I can assure you of that", there will be an "integration, which will occur slowly, over the years" in the style of Switzerland's agreements with the European Union.
"Brexit is transitional," adds Trigg, "everyone has realized that now the basic things cannot be resolved, so there have to be high-level agreements. "In a decade we will be inside the economic system" of the EU, and "there will be free movement of people in 15 years."
