Brexit’s new year gift to Britain was a raft of costly new customs bureaucracy arriving on 1st January. Unwelcome indeed, as companies wrestle to control supply chains in the face of the double whammy of the pandemic and leaving the EU’s single market and customs union a year ago. From car manufacturers to supermarkets to specialist small firms, no-one is exempt.
For a moment, it seemed even one of Brexit’s media champions, the Telegraph, agreed this was all too much: “Time is running out to prove Brexit is not a historic failure” thundered a headline. But destructive customs bureaucracy is not a Brexiters’ concern, rather the failure to go headlong for deregulation in a fantasy, reborn free market UK.
No-one wants to take responsibility for the actually-occurring Brexit that businesses are struggling with across the UK (in Northern Ireland too, albeit from the single market side of the Britain-Northern Ireland internal border).
There is a maze of acronyms, regulations, online forms and systems now facing businesses – all part of building the shiny, hard new EU-GB border. No wonder no-one can explain why this is a Brexit win.
Goods imported into the UK from the EU now need instant import declarations (not half a year later as was allowed). Food and plant products must be notified in advance. And to get the tariff-free trade promised in Boris Johnson’s trade and cooperation agreement with the EU, importers and exporters must have proof that goods were substantially made in the UK or EU (to avoid other countries taking a backdoor advantage of differences in UK and EU external tariffs).
If that isn’t headache enough, more rules and inspections are coming down the track in July (export health certificates for plant and meat products from the EU), September (certificates for dairy products from EU) and November (certificates for EU fish products). British exporters to the EU had to face all this last year, but the UK government delayed the controls into the UK until now.
Amidst all this enmeshing bureaucracy, forget competitiveness, just-in-time supply chains, free trade, buccaneering global Britain. As foreign secretary in 2018, Boris Johnson was alleged to have said “f**k business” when challenged about a hard Brexit. Now it’s only too clear, as Prime Minister, that is indeed his approach.
Whatever the Brexiter version of the Conservative party is, it is no longer, in any way, the party of business. More the party of “sod business”.
These cumbersome new barriers to trade with the UK’s biggest trade partner – half our imports come from the EU – hit big and small companies alike. But it’s especially challenging, even prohibitive, for smaller enterprises. The innovative small company was once the leitmotif of the Tory ideal entrepreneur but no longer. They can go hang too.
Yet smaller companies do a remarkable amount of international trade. In 2019, small and medium-sized enterprises were responsible for 41% of Scotland’s international exports. But even before these new rules hit, numbers of smaller UK firms importing from the EU fell in 2020 (while not falling from non-EU countries). UK goods trade with the EU has been falling too, more than with the rest of the world.
The Brexit hit to trade is clear – it’s not just the pandemic. And none of this is surprising. Putting barriers in the way of trade, where before there were none, is damaging, disruptive and costly. There are no upsides. And it was predicted and predictable.
This is, of course, a matter of intense and lively political debate; except it’s not. Labour continues to be missing in action on Brexit. Keir Starmer daren’t even talk about rejoining the single market, never mind turning the clock fully back on this folly and looking to re-join the EU.
But that leaves the main opposition to the UK’s extraordinarily anti-business government with almost nothing to say. Suggesting Labour might, one day, align on EU food health and hygiene rules is like bailing the ocean with the proverbial teaspoon. Brexit will damage the economy much more in the coming decade than the pandemic, but the opposition is silent. It’s a deep failing of British politics.
And even business has been cautious. The UK government doesn’t take kindly to businesses that are remoaners. So Labour mutes itself for its perceived electoral advantage while many businesses mute themselves to retain any access to government at all. It’s a sorry mess.
The SNP does periodically speak up against Brexit still. But it surely could and should be pointing out the mounting damage more regularly and methodically.
Of course, the SNP has its own concerns over what to say about borders given its independence in the EU goal. Yet, remarkably, Scotland manufacturing goods exports to the EU’s single market are almost as high as those to the rest of the UK. And EU and non-EU manufacturing exports taken together are much higher than those to the rest of the UK. There is a story yet to be put together here by the pro-independence side.
There’s not a total absence of debate. Academics and policy wonks are still producing serious analysis of the cumulative impact of Brexit. The House of Lords published an in-depth report in December one year on from Johnson’s trade agreement with the EU. There is some serious media analysis too.
Nor is the public impressed. A YouGov survey this week showed only 15%, across Britain, think Brexit is going fairly or very well while 52% think it’s going fairly or very badly.
Such numbers underline how shocking the absence of serious political engagement by Labour is. The refusal to challenge the UK government on Brexit is as deep a political failing as the economic and social impacts of Brexit.
Back in the actual economy, this week, Scotland’s smaller companies that import from the EU are trying to get their heads round acronyms such as IPAFFS and GVMS (don’t ask). Brexit may be a tale of ideology, delusions, lies and cowardice. But the real world effects are here and mounting.
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