We need to talk about the deal
It’s time someone other than EU Remainer fanatics to mention the elephant in the room: Brexit. Although I voted to remain in the referendum I argued that for the sake of democracy you had to accept the verdict. Like many I had expected Teresa May’s Brexit-Lite deal would have meant we would have stayed in the EU’s open market. As history recalls that didn’t get through parliament and it led to a change in the leadership of the Conservatives and under Johnson the Government received a mandate for a tougher form of Brexit in the 2019 General Election and in particular a trade deal which now looks anything but ‘oven ready.’.
With the effects of Covid on the economy it has been difficult to see the wood from the trees in terms of the how the trade deal affects business other than the decimation of our fishing industry. However bit by bit the fall out is beginning to become clear and although there are perceived benefits as trumpeted by the Government such as the ability to roll out the Covid-19 vaccines compared to our European friends have done the down sides are frankly very concerning.
Frosty relations
Appointing Lord Frost to tackle post-Brexit strategy has two sides. He’s a tough negotiator who will take a harder line in future with the EU but he also is a Johnson man and thus does not necessarily have the confidence of the Welsh, Northern Irish and Scottish Governments who are not currently on board with Westminster on a range of policies. Lord Frost needs to put on his big pants and start to renegotiate parts of the trade deal so it works for both sides and especially over Northern Ireland’s situation. Already the grace period for trade across the Irish Sea has been extended to October – so thankfully that will be the start of a revision of the trade deal as it is pointless if it damages our economy – the opposite of what was promised.
There are some benefits for UK firms which are related to the trade deal. Where UK based companies have sourced parts and supplies from the EU purely on cost when there is an equivalent nearer home then some suppliers will find their order books filling up. There’s evidence that in some sectors of manufacturing this is happening – with Print Week reporting that some print work has returned home due to the cost of transportation. And there have been anecdotal reports that some car manufacturers have looked to local suppliers for help. This is a trend that will continue and is welcome – it’s just hard at this time to weigh these benefits up against the negatives until more statistics are available.
Whichever statistic you take in terms of haulage crossing the English Channel whether it’s from the Road Haulage Association or the Government, freight volumes are down since January 1. Those long queues of trucks on the roads leading to Dover are unacceptable as they conflict with the idea of ‘just in time deliveries’ and of exporting and importing fresh produce. Almost every sector in the UK is being hit by the delays and hold-ups with some firms opting to up-sticks and move to the Netherlands, France or elsewhere to bypass some of the problems. That wasn’t in the leave manifesto. With technology most of the so-called paperwork can be reduced to the minimum and transport delays all but wiped out. And there is a perception that there is some juvenile politics taking place on both sides of the Channel and the logistics sector really does not need this.
From the plight of the City of London to the Cornish fishing industry every day brings fresh bad news as business is hit by the Brexit trade deal. There is a dangerous situation developing on the island of Ireland as well – which was entirely foreseeable. I don’t care how he does it but Lord Frost needs to act fast and sort out these problems this year as the Covid-19 crisis will slowly disappear as the vaccination roll-out continues and the economy will then be exposed in all its nakedness.
Harry Mottram
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