Another busy week here in the bunker with 16 new entries added to the bulging dossier. Brexit is swirling through the British economy like Agent Orange, damaging everything it touches and its impact is being felt by increasing numbers of voters on both sides of the leave/remain divide.
It should hardly come as a surprise to even the most committed Brexit campaigner that support among the voting public for their project continues to crumble, although apparently for some, it does.
Perhaps the weirdest addition this week was one from the IEA – the Institute of Economic Affairs, denizens of No 55 Tufton Street, who have published a highly critical report on the government’s new digital markets, competition and consumers bill (DMCC). Since this itself is a product of ‘the opportunity presented by Brexit’ it must count surely as a downside. The IEA say the bill could impose “tangible harms” on UK consumers.
Well, well, well. Who’d have thought it?
How Brexit is affecting citizens
Fflecsi Bwcabus is a novel bus service that has fallen victim to the government’s failure to meet its pledge of matching EU funding after Brexit. Running both fixed and bookable services, it operated a mix of scheduled routes and an Uber-like system, providing rural communities in West Wales with cheap, flexible transport. Funded for the last 14 years by an EU grant, the Welsh government has announced it will cease at the end of October due to a lack of money.
Tim Bale, a professor of politics at Queen Mary University London is the latest to discover that leaving the EU means exports to Europe are once again subject to the rules of the World Customs Organisation, based in Belgium (wait till Brexiters find out about that, eh?). A £25 book he sent to a friend in Ireland was returned after five months hanging about in a Royal Mail customs shed somewhere because it lacked a proper declaration.
The New European has an article about a disturbing post-Brexit Generation Z brain drain. But for those who stick it out, the Telegraph has some helpful advice: We can “get rich from Brexit” by investing in cheap shares on the FTSE. Cheap because, as the article’s author happily concedes, the London stock market is down as a result of Brexit. Quite.
Mind you, they’ll have to elbow their way into the queue of international venture capitalists who are snapping up bargains in order to ship the profits abroad.
The economy
A reduction in trade was bound to happen after we left the single market but there is a growing tendency on the part of Brexiters to erroneously claim that exports to the EU have increased to record levels. This from David Campbell Bannerman former UKIP chairman and Conservative MEP (not at the same time, just to be absolutely clear) is typical:
However, two entries to the dossier this week both pour cold water on the idea. It’s true that the value of trade has increased but this is only because of inflation. Higher prices make it appear that new barriers created by Brexit have somehow allowed us to increase trade. You only have to think about that for a millisecond to realise how daft it is.
The Grocer did an analysis on figures provided by the Food & Drink Federation that shows trade volumes of food and drink in the first half of 2023 were well down on the previous year. Whisky exports were down nearly 20% and gin by 12%. Beef and pork exports also suffered a fall, both down by nearly a quarter. British Meat Processors Association (BMPA) technical policy manager Nan Jones said the volume of red meat exported has “never recovered to pre-Brexit levels”.
To reinforce the point, an Institute of Directors (IOD) policy paper urged the British government to abandon its target of achieving exports worth £1 trillion per year by 2030 because it was “meaningless”. With inflation, the UK could (and probably will) hit the target even if the amount of goods and services we export actually drops. Crazy isn’t it?
The IOD want to see the target based on CVM or ‘chained volume measure’, a statistical method for removing the impact of inflation from GDP figures. They say while the £691bn of exports achieved in 2022 was an improvement on the year before, in CVM terms it was still below the £700bn seen in 2019.
Such a change would have the added benefit of shutting up Brexiters like Julian Jessop and @TerraOrBust who tweets as Gully Foyle #UKTrade, but seems to know nothing at all about trade.
Food, fishing and agriculture
The CEO of the British Frozen Food Federation (BFFF), says the new border operating model coming in next year will introduce “an entire new layer of complexity, delays, and increased costs for our members and trade partners, upon whom we depend significantly for our food supply”.
Some farmers are upset that the subsidies they get from government don’t match what they once received under the EU’s common agricultural policy (CAP). A Lancashire livestock farmer told the FT this week that she was now paid 50% less than before the UK government started phasing out CAP payments in 2021.
Fishing is still in the doldrums despite a modest increase in quotas. One trawler skipper in Peterhead, Aberdeenshire, Britain’s largest fishing port, welcomed the increase but said it would be offset by the increased costs, delays and extra paperwork needed. A sentiment echoed by the operations director at Nolan Seafoods who told AFP that Brexit has been a “disaster”.
Northern Ireland
Makers of fruit preserves may have a wry smile at the idea of Brexit allowing us to ‘take back control’ after it was revealed that ministers in the Northern Ireland Office are considering renaming jam as marmalade to bring it into line with the EU where ‘mermelada’ is commonly used to describe all types of jam. To avoid confusion marmalade would be known as ‘citrus marmalade’ although it might be easier to go the whole hog and call it jam. Why not?
Apparently, this may eventually be extended to the whole of the UK. The ‘Brussels effect’ preserved in a jar.
Also in the province, the Northern Ireland Human Rights Commission (NIHRC) has identified what it says are “significant concerns relating to access to healthcare after the UK’s withdrawal from the EU”. This is about citizens who reside on one side of the border but are employed on the other, so-called frontier workers.
The NIHRC says they should be able to receive healthcare on both sides and recommends that access to cross-border and all-island healthcare for EU and third-country nationals is “clear, comprehensive, and enshrined in law”.
That it isn’t already is surely a disgrace.
Trade
To nobody’s surprise, people briefed on the Indian trade deal being pursued enthusiastically by Rishi Sunak say the draft text doesn’t contain any legally enforceable commitments on employment rights or environmental standards.
British businesses and unions fear the deal will undercut UK workers’ rights and efforts to combat climate change. Rosa Crawford, trade lead at the Trades Union Congress (TUC) pointed out that: “Suppression of trade unions, child labour and forced labour are all widespread in India.” She added that the deal, “could lead to more good jobs being offshored to exploitative jobs in India”.
The government also published this week a document of bewildering complexity on moving stuff inside our own market: Annex A — licencing easements under the Northern Ireland Retail Movement Scheme is its title. For your edification I give you a sample page:
There are 17 similar pages just like it to wade through. And note “all goods” sent from Great Britain to Northern Ireland “will require both an entry summary declaration for safety and security purposes and an import declaration”. Forget about popping a mixed pallet through a groupage service to an Antrim supermarket, those days are gone.
I seem to recall Boris Johnson promising frictionless trade with the EU, now thanks to Brexit, we haven’t even got it inside our own country.
Manufacturing
The automotive industry is getting ever more twitchy about expensive tariffs being imposed on electric vehicles exported and imported to and from the EU after January next year.
Car makers on both sides of the Channel say they are not ready, with the European Automobile Manufacturers Association (ACEA) warning tariffs could amount to £3.75bn over the next three years with buyers bearing the cost. This is due to cumbersome rules of origin agreed by Johnson under the trade and cooperation agreement signed at the end of 2020.
Nobody was reassured by reported comments from the EU’s internal market commissioner, Thierry Breton, who said it would be wrong to re-open the Brexit deal to satisfy the motor industry. “If something has been negotiated, it shouldn’t be changed”, he told the Guardian.
The UK government would delay it in a heartbeat but after Brexit we are once more reliant on the EU, with zero influence.
Government
I have added a new category to the Davis Downside Dossier – government – to show downsides which primarily affect ministers and Whitehall.
The first entry in the category exposes the hollowness of the phrase ‘take back control’ as the European Court of Justice levies a €32mn fine on the UK government for allowing pleasure boats in Northern Ireland to use low tax red diesel. Brexiters will be fuming, but this is what Johnson signed up to.
In Gibraltar, the chief minister Fabian Picardo has said he is “sick to the back teeth of Brexit and its consequences” and says the 17.4 million who voted for it in 2016 did Gibraltar a “massive disservice”.
Welcome to the club.
Again, there were no upsides to add.
