Anyone who thought Britain was governed by dutiful men and women sitting around the cabinet table taking vital decisions in the national interest calmly and wisely would have had their illusions shattered this week. The Covid inquiry heard extraordinary evidence about the bickering, foul-mouthed ministers and SPADs at the heart of the government’s response in early 2020.
Professor Chris Grey, in an exceptional blog post today, explains how Covid and Brexit are intertwined, with Britain paying twice over, firstly for Brexit itself and secondly because the upheaval ushered in a bunch of Vote Leave non-entities running Downing Street when the pandemic struck. They created the first and were completely incapable of handling either.
The week was also marked by the King’s speech setting out Rishi Sunak’s rather thin agenda for the new parliamentary session notable perhaps for the absence (again) of any significant plans to diverge from EU law.
The IEA report
We also saw the publication of a report published by the Institute of Economic Affairs (IEA) written by long standing Australian Eurosceptic Catherine MacBride, supposedly ‘proving’ that Brexit has “not had a major detrimental effect on UK–EU trade.” It was soon trashed by reputable economists. The prize for the best analysis must go to Gerhard Schneider who comprehensively dismantles the entire thing.
Her report is classic IEA. It looks plausible and well presented with confident – but erroneous – conclusions. But of course, it was never intended as a serious work, only as a means of undermining official OBR forecasts and garnering a few positive headlines to prop up Brexit a little longer, which it duly did.
However, before accepting the report’s conclusions at face value, her supporters may want to read a 2018 Twitter exchange between MacBride and Jim Cornelius captured here, and no laughing, please. Her knowledge of trade matters could be written on the back of a postage stamp in heavy felt tip, but that has never been an obstacle to finding employment in 55 Tufton Street has it?
Notwithstanding that, trade secretary Kemi Badenoch hailed the report in a speech to launch International Trade Week. It was a snub for the OBR, the respected statutorily independent body set up by George Osborne to ensure honesty in public finance reporting. Her own department has over 4,000 staff and the Treasury another 3,200 all with easy access to the facts, which presumably are too embarrassing to reveal. Instead, Badenoch had to endorse a dubious piece of external flimflam which challenged observable reality.
If that isn’t a metaphor for Brexit, I don’t know what is.
If the week was a bad one at the beginning, for Sunak it got worse after Home Secretary Suella Bravermen, the darling of the hard-right, took to the pages of The Times to launch an attack on the Metropolitan Police – apparently for being woke. The PM is now weighing his options, back her and destroy what’s left of his credibility or sack her and destroy the party.
Meanwhile, Brexit rumbles on with 13 added to the dossier this week, all on the downside.
Financial Services
British investors are said to be “fleeing for the exits in droves,” after withdrawing a net £1.2bn from equity funds in October. This makes it the worst month since Kwasi Kwarteng’s disastrous mini-budget debacle last year. Brexit and sluggish economic growth – the two seem inseparable – are blamed, according to research by funds infrastructure group Calastone and reported by The Times.
Bank of England governor Andrew Bailey, conceded that Brexit has led to a “reduction in the openness of the UK economy”. This is sometimes known as trade intensity and measures total trade imports and exports as a percentage of GDP. The IEA report glosses over this presumably because it’s an awkward fit with their conclusions.
Speaking in Dublin, Bailey also said that he hoped to see further close regulatory cooperation with his Irish counterparts to minimise fragmentation of financial markets after Brexit, another sign that serious divergence is off the agenda.
Citizens
Mobile roaming charges were banned by the EU in 2017 and suggestions that Brexit would see them returned were dismissed as scaremongering. The dossier already records several UK network operators re-introducing roaming charged for EU countries. Now EE, after raising prices from £10 to £15 a month earlier this year, has increased it again to £25 per month. Brexit is the gift that keeps on taking.
A Devon couple are the latest to fall foul of the new post-Brexit passport expiry date rules that we have previously covered in the dossier. Retired teacher Andrew Sutherland claims he entered his wife’s passport details onto Cunard’s website but no issues were flagged. The cruise company is now refusing compensation and the couple have waved goodbye to a £3500 holiday.
Sky News revealed that the government will move to enshrine a number of EU equality laws protecting various rights firmly into British law, prompting the chair of the Law Society’s employment law committee to question what Brexit was for.
Max Winthrop told Sky:
“When we are effectively replicating legislation from the EU, and I can understand why the government have done that because it would not be particularly popular to say ‘let’s scrap maternity rights’, it does leave the big question as to what exactly is it that we’ve gained from leaving the EU.”
He is not alone, almost two thirds of the electorate are now asking the same question.
Manufacturing/services
The steel industry are applying pressure to force the UK government to align itself with the EU’s carbon border adjustment mechanism (CBAM) which from 2026 will tax imports where the goods are linked to significant carbon emissions in their country of origin.
Around 75% of the UK’s steel exports goes to the EU and current carbon prices would cost the sector £372mn per year.
Car dealers are beginning to see the impact of Brexit in the price and availability of spare parts with one garage reporting a delay of several weeks in obtaining suspension parts for a Honda. Morgan’s Motor Engineers in Drayton, Norfolk, believe Brexit is a key factor, not just because of the additional duties levied on parts imported from the EU but also because of increased labour costs caused by driver shortages in the supply chain.
Brewing/cheese making
Another brewery is to close with Brexit said to be one of the major factors. Alpha Delta Brewery in Newcastle will be the sixth craft brewer logged in the dossier as planning to end production. Founder Ross Holland said “unforeseen complexities of exporting post-Brexit” had added to rising energy costs to force the closure. In 2021 it was named as one of the world’s ten best new breweries in the Rate Beer Awards.
UK cheese makers are worried that export quotas for cheese are about to be slashed after Canada announced it will not “rollover” a temporary post-Brexit arrangement, agreed in 2020 beyond the end of the year unless the government opens the UK market to Canadian hormone treated beef.
The move leaves trade ministers with a difficult decision about which sector to throw under the bus.
NHS
The Independent carried a disturbing report this week about “severe delays” in obtaining supplies of drugs caused by Brexit red tape. According to the Independent Commission on UK-EU Relations, shortages have affected a range of medicines “across the board” since Brexit.
The Nuffield Trust, a healthcare think tank said there was “significant evidence” to indicate that Brexit is having a negative effect on medicine supply as well as staff shortages.
The Falklands
Unlike Gibraltar, the Falklands didn’t get a vote in the 2016 referendum but now they too have become critical of Brexit. The deputy chairman of the Falkland Islands Legislative Assembly has spoken to The New European about how Brexit has affected the Islands’ economy.
Teslyn Barkman spoke after a joint communiqué signed in Brussels by 60 EU states and Latin American nations referred to the Falkland Islands as the “Islas Malvinas.” Barkman, however, was more concerned about tariffs on exports to the EU which he said, “cannot be the new status quo” and he hoped for a return to the previous tariff-free trading relationship.
The Brexit bill
The Daily Mail without any apparent irony is complaining about the Brexit divorce bill after they unearthed figures showing the UK paid £9bn to the EU in 2022, an increase of 60% over 2021. Irate Brexiters describe the increase as a ‘slap in the face’ for hard-pressed taxpayers in this country.
The paper pointed out that Downing Street had rejected an EU estimate of a total bill of nearly £41bn in July 2021 but within twelve months the government’s own figures put the bill even higher, at £42.5bn.
You can’t believe anything can you? Except in Yorkshire Bylines of course.
