Ian McConnell: We need to talk about Brexit, Douglas Ross

Imagine he or she or the company they head, in reports to investors and discussions with them, seemed at pains to talk as little as possible about this flagship project, or what had ensued from it and was yet to come.

Now consider Scottish Conservative leader Douglas Ross’s comment last month – as he acknowledged damage from the Boris Johnson administration’s European Union exit by endorsing the need for a compensation scheme to combat the effects on the seafood industry – that he does not look at Brexit as “an electoral issue”.

This seems like an incredible statement. It is surely not a convenient electoral issue for Mr Ross and other Conservatives standing in the May 6 Scottish Parliament election. But it surely is an issue which should be debated extensively ahead of this key election, given its major and widespread effects on Scotland’s economy, households and businesses.

Its effects, of course, go way beyond the albeit utterly lamentable hit to Scotland’s seafood industry.

Scottish goods exporters across a raft of sectors have been hit hard. The food and drink industry as a whole is facing huge Brexit-related troubles.

Alistair Brown, chief executive of Edinburgh-based Bellfield Brewery, this week praised the “dogged determination” of staff in overcoming Brexit challenges after landing an export deal with Dutch supermarket operator Albert Heijn.

And Paul Sheerin, chief executive of industry body Scottish Engineering, has flagged the huge impact of Brexit on companies operating in this key sector.

Sir Tom Hunter Picture: Colin Mearns (Image: Colin Mearns)

A major report commissioned by The Hunter Foundation and produced by consultancy Oxford Economics, published this week, highlighted the drag on the Scottish economy and the UK as a whole from Brexit. Crucially, it touched on the detrimental effect on the immigration which has been so important to growth of Scotland’s working-age population over recent years and decades.

British Chambers of Commerce last week highlighted “post-Brexit disruption” as its latest survey confirmed companies had endured a miserable first quarter.

Suren Thiru, head of economics at British Chambers, said: “Our latest survey indicates a particularly difficult first quarter of the year for the UK economy, as a third lockdown and post-Brexit border disruption weighed heavily on key indicators of activity.”

Hannah Essex, co-executive director of British Chambers, said: “The damage wrought to trading conditions by repeated lockdowns and issues at the border will not be repaired by renewed confidence alone. The Government must recognise the compounded impact that the combination of the pandemic and Brexit-related issues [has] had on firms up and down the country.”

Yet MP Mr Ross, for one, does not seem that keen to chat about Brexit. Nor do the Scottish Tories in general.

Mr Ross might also want to mull the observations by the Chartered Institute of Procurement and Supply and IHS Markit, in their latest survey of UK manufacturing published last week, on how Brexit is compounding the huge challenges presented by the coronavirus pandemic.

This key survey notes the “sector remained beset by severe supply chain and logistic issues … leading to delivery delays from suppliers and disruption to production and distribution schedules”.

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CIPS and IHS Markit declared: “Supply-chain issues remained a constraint on UK manufacturers during March, disrupting raw material deliveries, production schedules and the onward distribution of finished goods to clients. Vendor lead times lengthened to the second-greatest extent in survey history due to … Covid-19 restrictions, low stocks at suppliers, port disruption, shipping delays, post-Brexit issues and raw material shortages. With demand outstripping supply, input price inflation accelerated to a 50-month high. This also led to upward pressure on output charges, which rose at the quickest pace since January 2017.”

There will undoubtedly be a huge cost from the end of frictionless trade with the EU, the world’s largest free trade bloc, in terms of UK exports and consequently economic output and living standards. The EU, whether Brexiters like it or not, is the UK’s biggest export market.

What we are seeing for the most part certainly does not constitute “teething problems”, a phrase used by the Prime Minister, but rather the realities of the UK’s new trading relationship with the EU arising from Mr Johnson’s hard Brexit.

And, of course, over coming years and decades, Scotland’s economic growth potential will be hampered severely by the Conservatives’ clampdown on immigration from EU countries.

So trying to dismiss Brexit as not being “an electoral issue” is the wrong call from football linesman Mr Ross.

Boris Johnson Picture: Toby Melville/PA

It is worth emphasising Mr Ross did vote to remain in the EU. However, what is relevant is where he stands now, and that seems to be very much in line with the Johnson Government on this issue. He seems to recognise a need to tackle problems for exporters but his comments do not suggest a focus on the much broader damage from Brexit.

Of course, Brexit was the main thing Boris Johnson was selling when he secured a big majority in the December 2019 General Election.

And it is what he and his Cabinet continued to plough ahead with, right through the depths of the coronavirus pandemic. The amount of time spent on the project, when the UK Government should have been entirely focused on the coronavirus crisis and tackling the economic fallout from this, was colossal.

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South of the Border, Brexit remains very much the product which the Johnson Government is selling to the electorate.

However, not surprisingly given the large majority vote among the Scottish electorate to remain in the EU in the 2016 referendum, it is a product for which there is far less demand north of the Border. That is not to say there is no demand. There are the die-hard Brexiters, some of whom continue to deny there is any damage from this Tory project. And there are those who refuse to address any question or challenge on the Brexit front, attempting to divert the topic instead to Scottish independence. At times, it seems Scottish Tories want to talk about independence more than the SNP.

What is for sure is investors would quickly run out of patience with representatives of a company that refused to discuss a flagship project that experts had warned against and which had caused havoc, a scenario akin to what we are seeing with the Scottish Tories and Brexit. South of the Border, Mr Johnson and his Cabinet are only too happy to talk about Brexit, refusing to concede it has been a calamity and even trying to argue there are benefits. Home Secretary Priti Patel has celebrated a clampdown on immigration from EU countries, but that is not a benefit. Quite the opposite. It will have a very major and long-lasting detrimental impact on growth in Scotland and elsewhere in the UK.

Here it is worth again spelling out the Theresa May Government forecasts from late 2018, seeing as Brexiters and some others who did not favour leaving the EU in 2016 now refuse to acknowledge the damage or deal with it.

These projections showed Brexit would, with an average free trade deal with the EU, result in UK gross domestic product in 15 years’ time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero-net inflow of workers from European Economic Area countries.

This week’s report from Ayrshire entrepreneur Sir Tom Hunter’s foundation and Oxford Economics declares: “We estimate Brexit will have a significant impact on future growth.”

The report, which examines how the economic growth rate north of the Border might be raised, estimates GDP in Scotland and the UK as a whole will, by 2030, be 3% lower than it would have been without Brexit.

It says: “In recent decades, Scotland’s population has grown more slowly than the UK average, but growth in the working-age population – vital to the labour market— has matched the UK, largely due to inward migration.”

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And it notes, from 2000 to 2019, population growth in Scotland averaged only 0.4% a year, compared with 0.7% UK-wide. The report observes Scotland’s total population would have declined if not for net inward migration of 413,000 people. It points out the population of people aged 16 to 64 grew more slowly, at 0.3% a year, “although in this case the figure was the same as the UK average”.

The report also emphasises Scotland has a lower birth rate than the UK, “which may imply a labour supply constraint at some point in the future, unless inward migration rises further – something made less likely by Brexit”.

The Scottish Conservatives declare in campaign material which has arrived through letterboxes that the nation needs a Parliament “focused 100% on recovery”, featuring a picture of a smiling Mr Ross.

One thing is for sure. Mr Johnson and his Cabinet were not “focused 100% on recovery” when they refused last year to extend the Brexit transition period and at least delay for a while the myriad negative consequences of Brexit for businesses and households. Those who would shout down people who point to the Brexit woe that has materialised continue to fail spectacularly to show any actual benefits of the folly. This is not surprising because there are none.

And recovery across the UK continues to be hampered by the Brexit folly.

We need to talk about Brexit, Mr Ross.

After all, how else are we going to mitigate the colossal damage being done to exporters and many others? This damage is weighing heavily on the recovery from this awful pandemic, and the Conservatives should focus sharply and quickly on trying to sort out to the maximum possible extent the mess they have created. That might help recovery.