While the UK Government celebrates the use of “new Brexit freedoms” to introduce “pint size” bottles of wine, there is little sign of cheer from businesses and households about the ruling Conservatives’ hard exit from the European Union.
Stark contrast between bizarrely enthusiastic statements from the Tories about Brexit and the grim reality of the folly for consumers and companies is something we should be used to by now.
However, the whole situation is so peculiar that any juxtaposition of the hot air being emitted by the UK Government on Brexit and the cold actuality of the situation grabs the attention.
The Department for Business and Trade declared on December 27: “Pint size wine stocked on Britain’s shelves for the first time ever thanks to new freedoms from leaving the European Union.”
Minister for Enterprise, Markets and Small Business Kevin Hollinrake proclaimed that day: “Innovation, freedom and choice - that’s what today’s announcement gives to producers and consumers alike.
“Our exit from the EU was all about moments just like this, where we can seize new opportunities and provide a real boost to our great British wineries and further growing the economy.”
No one should need much persuading, surely, that the UK Government’s priorities have long been all wrong, looking at the state of the economy and the knock-on effect on living standards.
If they do, Mr Hollinrake has surely provided it.
And here is what David Bharier, head of research at British Chambers of Commerce, had to say when the business organisation published its latest quarterly economic survey this week: “The data also reveal the disproportionate impacts of economic shocks on different types of businesses. Manufacturers, for example, are more likely to be exposed to the trade barriers established with Europe, while many firms in the retail and hospitality sector are reporting recessionary conditions.
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“Businesses have been desperate for a clear long-term plan for growth from [the] Government that addresses infrastructure, access to skills, and global trade.”
Yes, such a plan should surely be more of a priority for the UK Government than pints of wine.
British Chambers also flagged “the recruitment challenges many firms are facing”.
Many business leaders across a raft of sectors, from hospitality to engineering, have highlighted the effect of loss of free movement of people in fuelling skills and labour shortages.
Yet the Government seems either not to hear this, or to not want to listen.
It would rather plough on with some token move over imperial measures, even though businesses and households have made it quite plain that they prefer metric and do not want the confusion of turning the clock back on this.
Businesses and households alike have had to endure very tough times for a long time now.
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Shevaun Haviland, director general of British Chambers of Commerce, said this week: “Our data shows business confidence is growing, but real challenges remain in the coming year. “Worries about interest rates and inflation remain at historically high levels, despite a slight easing of concern. The recruitment challenges many firms are facing underline our calls for a skills plan from Government alongside an affordable immigration system.”
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Mr Bharier said: “The latest QES results show steadily growing confidence among UK SMEs (small and medium sized enterprises), particularly compared to this time last year, when the UK was beset by a significant energy price shock and political instability.
“However, while it’s likely the UK will avoid a technical recession, these [QES] results provide more evidence of a very low growth climate as most SMEs continue to report no improvement to sales, cash flow, or investment.”
A significant number of senior economists have flagged the distinct danger of UK recession.
Data from the Office for National Statistics on December 13 showed UK economic output fell 0.3% month-on-month in October.
On December 22, the ONS revised third-quarter data to show a 0.1% decline in gross domestic product, rather than stagnation, during the three months to September. It now calculates the UK economy stagnated in the second quarter, rather than expanding by 0.2% as it estimated previously.
A further fall in GDP in the fourth quarter of last year, a period for which official figures have yet to be released, would mean the UK would be in recession.
The UK manufacturing sector ended 2023 on a weak footing, with a downturn in production volumes accelerating as intakes of new work from both domestic and export clients declined, a survey published this week by the Chartered Institute of Procurement & Supply and S&P Global showed.
Rob Dobson, director at survey complier S&P Global Market Intelligence, said: “UK manufacturing output contracted at an increased rate at the end of 2023. The demand backdrop also remains frosty, with new orders sinking further as conditions remain tough in both the domestic market and in key export markets, notably the EU.
“The downturn has hit manufacturers' confidence, which dipped to its lowest level in a year, and encouraged renewed cost caution with further cutbacks to stock levels, purchasing and employment.
"With concerns about high interest rates and the cost of living crisis hurting demand, the outlook for manufacturers in the months ahead remains decidedly gloomy.”
Mr Hollinrake, however, seems more interested in pint-size bottles of wine with his declaration that the UK’s exit from the EU was “all about moments just like this”.
He should most certainly resolve to take a good look around at what is going on and amend his priorities in short order.
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