In October 2016, David Davis, the then Brexit secretary, told the House of Commons that “there will be no downside to Brexit at all, and considerable upsides”.
John Davidson, co-owner of flower company Tom Brown Wholesale, said the new post-Brexit border checks are expected to cost his business between £200,000 and £225,000 per year.The Cold Chain Federation, an industry trade organisation, said the costs were bound to affect prices and would have to be passed on to “either the EU importer, the smaller UK retailer, or the UK consumer”.
Nigel Jenney, CEO of the Fresh Produce Consortium, has described plans for goods inspectors at Border Control Posts to clock off at 7pm as “absolutely crazy,” causing huge disruption for truck drivers bringing in perishable goods. Mr Jenney said: “95% of all our consignments from Europe arrive in the evening and through the night to be delivered… so that we can enjoy that produce the next day.” Delivery drivers would have to choose between parking up for the night or driving inland to Sevington which he claims was impractical given what he called the “astronomical” fees charged at the government facility.
The NFU in Scotland has raised concerns following reports from ITV suggesting that, despite the second phase of the UK Government’s Border Target Operating Model starting this week, shipments are being waved through even when incorrect paperwork is submitted. Vice President Andrew Connon said: “The UK Government’s record on introducing effective post-Brexit border controls that protect farmers and crofters from highly damaging plant and animal diseases has, to date, been woeful.
The Daily Mail reports that ministers fear the EU's Entry/Exit System (EES) which comes into force in October is “likely to cause travel chaos for UK holidaymakers.” British and non-EU passport holders will have to go through fingerprint checks and face scans under the new rules. The Port of Dover, which has regularly seen long delays resulting from post-Brexit checks, said the new system could lengthen inspections on cars from 45 seconds to as long as ten minutes.
Lord Howarth of Newport, who was both a Conservative minister under Margaret Thatcher and John Major, and a Labour minister under Tony Blair, has told peers of a florist friend who claims the price for lisianthus, a cut flower with a long vase life, imported from Europe has almost trebled due to new sanitary and phytosanitary checks. The florist foresees “only the rich being able to give flowers.”
Philip Rycroft, the former top civil servant at DEXEU, the Department for Leaving the European Union, has said the barriers that now exist between the UK and its major EU markets act as a drag anchor on the UK and reduce productivity growth. “Coming out of the EU means we will be poorer than otherwise we would have been,” said Rycroft, adding that he also believed Brexit had made an independent Scotland more likely.
The British Poultry Council (BPC) says that certification alone has cost UK poultry meat exporters £55 million a year since January 1, 2021 and claims a 56% drop in poultry meat exports since 2020 underscores the erosion of British poultry supply chains due to Brexit, and shows the need for a Sanitary and Phytosanitary (SPS) agreement. The trade body also says importers have enjoyed a competitive advantage over the same period.
Quoting ONS figures for the three months to December 2023, Bloomberg reports the UK is exporting fewer goods than before Brexit. The volume of exports of goods was around 15% below the level in 2018. That’s in contrast to services exports which have continued to rise after surpassing pre-pandemic peaks. The UK’s trade balance is said to have worsened since 2010, with falling EU trade weighing on progress made to boost business with the rest of the world.
A tender document has been issued for the construction of new border control infrastructure at the port of Fishguard in Pembrokeshire, required as a result of Brexit, with proposed enhancements including expanded parking for heavy goods vehicles and additional processing facilities. The Welsh Government has announced the need to augment customs infrastructure at this key transit point following the UK’s departure from the European Union.
UK food importers claim that the newly introduced post-Brexit checks could increase their costs by up to 60%, pushing up prices for customers and driving some shops out of business. Importers and haulage companies have criticised the lack of clarity over what a “consignment” meant, with many assuming that the cap applied per lorry. Adriana Zalewska, from the small importer Kin Global Distribution, said its lorries could often carry shipments with several types of meat, dairy, and other fresh produce, with the new fees adding upwards of £1,300 per shipment.
Just hours to go before new post Brexit border checks started yesterday, Britain’s commercial port operators are still waiting to discover how they’re supposed to recoup the costs of running new high tech border controls. Richard Ballantyne, CEO of the British Ports Association, and Rhett Hatcher, chief executive of the UK Chamber of Shipping, warned it’s not possible to know “how many eligible goods are being transported through ports as well as who to invoice a blanket charge” without the information on the government’s Import of Products, Animals, Food and Feed System, to which they do not have access.
The Guardian reports that Irish consumers paid €700m (£600m) in customs duties on GB imports in 2021 and 2022, according to figures from the Revenue Commissioners (IRC) in Dublin. The data revealed a 90% increase over 2020, after the Trade and Cooperation Agreement came into force. While a significant amount of customs duty came from imports from China, the IRC attributed the scale of change to Brexit saying: “The level of customs duties has effectively doubled in recent years compared to the previous decade, reflecting the transformation of Great Britain into a third country in 2021.”
Fears are growing that the oil giant Shell, Britain's second most valuable company, may be considering moving its listing from London to New York joining the exodus of businesses who have chosen to abandon the London stock exchange after Brexit because of poor valuations. In April, former Shell CEO Ben van Beurden called the difference in valuations between Europe and the US a "major issue" and argued Shell is "massively undervalued".
An analysis by chartered accountants and business adviser, Hazlewoods, shows the number of UK businesses trading with the EU has fallen to a three-year low of 232,309 in the year ending December 31, 2023, down 4% from 242,029 businesses in 2022. Partner Rebecca Copping said: “The number of businesses having no option but to cease trading with the EU continues to grow. This is a worrying sign for the many businesses that have traditionally relied on a European customer base.”
The manager of a German deli in London has described Brexit as “a massive pile of paperwork.” Susan Schneider was showing ITV's business editor Joel Hills how to enter commodity codes into the government’s “Import of Products, Animals, Food and Feed” (IPAFF) system online for which a customs agent charges her a flat rate of £50 plus £1.50 per commodity line. From this week the new Common User Charge of £10 per commodity line (£29 for “medium risk” products) comes into force and Ms Schmeider's EU supplier has now introduced a new “Brexit Admin Fee.”
ITV has calculated that the cost to UK consumers of the new post-Brexit border checks coming into force in a few days at £2.9 billion a year, more than ten times the government's own estimate published last year. If all the extra costs are passed on to consumers then the average household in the UK would see the price of their monthly food shop rise by £8.57. Anna Jerzewska of Trade & Borders, an independent customs consultant, described tITV's calculations as “robust”.
MPs on the Environment, Food and Rural Affairs Committee have written to the government demanding clarity on plans for the UK’s new post-Brexit border controls after it emerged in the FT that crucial checks on imports would not begin by next week’s deadline. The committee claimed that setting the rate of checks to zero for all goods when the border comes into force was a sixth delay “in all but name”. “It is essential [the government] urgently takes steps to communicate the changed arrangements to businesses and the public to build confidence in our incoming border controls and reduce disruption,” the MPs said in a letter to Environment Secretary Steve Barclay.
A paper published by Aston University and the University of Bristol, based on an analysis of 279 previous trade agreements and export statistics from more than 200 countries suggests that a UK deal to harmonise veterinary standards with the EU could boost British agrifood exports to Europe by more than 22%. The study also predicted imports from the EU would also increase by 5.6% if there was a deal. Professor Jun Du said that because the UK was previously aligned with EU standards and had not diverged significantly since Brexit, it was likely to feel the benefits of a veterinary deal faster than was normal.
The FT reports that small and medium-sized importers of food and plants from the EU will face “punitive monthly charges” when post-Brexit border checks come into force at the end of this month. This is according to William Bain, the head of trade policy at the BCC, who warned that owners of corner shops, cafés and local delis would face an “explosion in costs” with some businesses paying “tens of thousands of pounds” extra each month. Mr Bain said: “It is becoming clearer [the checks] will have an unfair effect upon small and medium-sized businesses. The loser in this will be British consumers, facing higher prices for everyday foods and reduced choice.”
The UK haulage industry has been forced to train extra drivers following Brexit and two years on, logistics trade bodies report that the crisis has triggered a restructuring of the driver industry leading to higher costs and wage increases of 20-30% above pre-pandemic levels, but also a steadier pipeline of younger British drivers. Lee Juniper, boss of FreshLinc, which has trained nearly 200 drivers since opening his on-site driver school 18 months ago said: “I’m not sure it’s exactly a Brexit ‘success story. We’ve solved the problem, but we’ve had to pay through the nose for it.”
The Animal Welfare (Livestock Exports) Bill, introduced in Parliament in December last year will ban the export of live animals including cattle, sheep, and pigs, legislation only possible after Brexit. The government says law will ensure that animals are slaughtered domestically in high welfare UK slaughterhouses, reinforcing te UK's position as a world leader on animal welfare, boosting the value of British meat and helping to grow the economy.
From 1 January, as a result of Brexit, UK wine producers will be allowed to sell 'piquette', a French term which sometimes refers to a very simple wine or a wine substitute, described by The Oxford Companion to Wine as a “wine-like beverage.” Piquette cannot be sold in the EU. The term has also been used as a nickname for French wine of low quality. The UK the government has also removed the need for imported wines to have an importer address on the label, reducing administrative burdens for businesses.
A think tank, The Centre for Economics and Business Research (CEBR) predicts that the UK economy is set to grow more quickly than France in the coming years, making it almost 20% larger by 2038, and narrowing the gap with Germany. The report also suggests the UK is likely to maintain its position as the sixth-largest global economy.
In May this year, the business secretary, as part of the government's de-regulation drive, announced changes to employment law which she claimed could help save businesses around £1 billion a year. Kemi Badenoch said her department would consult on cutting unnecessary red tape on recording working hours, streamline engagement with workers when a business transfers to new owners, and provide up to 5 million UK workers greater freedom to switch jobs by limiting non-compete clauses.
Hailed by The Sun as a major change to Britain's drinking laws, champagne drinkers in the UK may soon be able to buy their favourite fizz in pints. Previously outlawed by EU regulations, government insiders say a consultation with the champagne and English sparkling wine industries is “imminent” and could pave the way for pint-sized servings for all wines “early next year.” A business department source said: “This is just the latest win from our push to ditch pointless and restrictive EU rules.”
DEFRA has announced that following a 2021 market access deal with Japan, UK farmers' processors and suppliers will be able to export fresh and cooked poultry meat into the Japanese market. The industry estimates that this market could be worth over £10 million in the next 5 years. The agreement's implementation had been delayed by an avian influenza outbreak.
The co-founder of Facebook, Dustin Moskovitz, now the CEO of software company Asana, has told The Times that Brexit means the UK has the independence to be a global leader in artificial intelligence (AI). Moskovitz said Brussels’ heavy-handed approach to regulation meant it was “better that the UK is out of the EU”. Speaking ahead of Rishi Sunak’s AI summit at Bletchley Park, he said he was “far more concerned about regulatory friction” in the EU than in Britain.
Moody's, the international credit rating agency has dropped its negative outlook on the UK, saying that "policy predictability has been restored" following last year's mini-Budget. The influential agency noted the UK's "more conciliatory" approach to EU trade and said increased friction due to Brexit had slowed the UK's bid to reduce inflation, which it sees returning to its 2% target in 2026. The move could mean marginally lower borrowing costs for the government's Debt Management Office (DMO).
Qkine, a Cambridge biotech company that manufactures high-purity, animal-free products for life science applications has identified the cultivated meat sector as an ideal opportunity for post-Brexit Britain to surge ahead. One of the founders, Catherine Hyvönen, told The Cambridge Independent “Leaving the European Union means we now have the capability to take something to market in the UK without having to have the sign-off from every European nation.”
Research by Professor Jonathan Portes into the effects on UK productivity related to changes in immigration levels, reveals that “there is some evidence of a positive association between non-EU origin migrants and productivity, and the reverse for EU-origin migrants.” The analysis suggests that an ‘extra’ 1% of the workforce from outside the EU is associated with an approximately 1.5% increase in productivity, while results for EU-origin migrants are less clear. However, Professor Portes says, “the estimates never approach statistical significance, and are quite small.”
The BBC report that Manx fishermen who have started to catch herring around the Isle of Man, for the first time in 25 years. The first boat has started landing the fish following a post-Brexit deal between the UK and the Manx government. Following Brexit, the UK gained a bigger portion of Irish herring quotas, part of which was then shared with the Isle of Man. An initial 100-tonne limit for 2023 is set to be increased in the coming years so more boats can take part.
The UK has formally signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) but the trade deal, according to the government's static economic modelling, will increase the UK's GDP by just £1.8 billion (0.08%) “in the long run.” Nikkei Asia, says analysts see little economic impact from the deal with the main obvious beneficiary being Malaysia, which stands to gain tariff-free acces to the UK for its palm oil.
Wine. Scrapping retained European Union laws will “put a rocket under” the UK’s domestic wine industry and potentially boost vineyards by £180 million, according to the environment secretary. Therese Coffey said the changes being introduced through the legislation would give vineyards the “freedom they need to thrive”. The changes include using more disease-resistant varieties of grape and eliminating the need for foil caps and mushroom stoppers on certain sparkling wines.
Speeding fines. UK drivers caught on speed cameras in the EU could escape fines after Brexit when the Cross-Border Enforcement (CBE) Directive, which allowed the UK and the EU to share driving license information (it worked both ways) was revoked. However, the DfT say the 1959 Council of Europe Convention on Mutual Legal Assistance in Criminal Matters (MLA), which permits the exchange of information and evidence on criminal and administrative matters, will continue to apply to the UK, so you may not be off the hook.
Northern Ireland. A report commissioned by Stormont’s Department for the Economy has suggested that the impact of the NI protocol will see the output of the NI economy rise by 2.2% compared to no Brexit. This is due to the province’s manufacturers maintaining preferential access to both the EU and UK markets and also because the sea border means local producers will face less competition from Great Britain, raising prices for consumers.
Reshoring. Data from BNP Paribas BNP for the first half of 202 2 has revealed a surge in demand for industrial floorspace and increased activity from manufacturing occupiers as they seek to ‘reshore’ activity back to Britain following the impacts of Brexit. Vanessa Hale, Head of Research and Insights at BNP Paribas Real Estate comments: “Reshoring is bringing ‘Made in Britain’ back to our products. There are a number of driving factors behind this including inflation, Brexit, the pandemic, the Ukraine war and the blockage of the Suez canal, which have massively impacted supply chains and overheads.
Duty free goods. Before Brexit, travellers coming to the UK from non-EU countries were limited to personal duty free allowances as set by the EU. This was 4 litres of still wine, 16 litres of beer and either 1 litre of spirits over 22 % vol. or 2 litres of fortified or sparkling wine. Now the UK government has increased these allowances for all countries to 18 litres of wine, 42 litres of beer and 4 litres of spirits or liqueurs over 22 percent in alcohol. Duty free allowances for tobacco products remain broadly in line with the old EU higher quantities.
Import VAT. Travellers purchasing goods (not alcohol or tobacco) from duty free zones within the EU (in ports and airports) no longer need to pay country of origin sales taxes and will face no import VAT when arriving in the UK as long as they keep within the £390 limits (£270 if arriving by private plane or boat). This potentially saves buyers up to £78 per trip.
Asylum claims. According to the BBC’s lewis Goodall, successful asylum decisions are at their highest rate for many years attributed partly to Brexit. The UK is no longer part of The Dublin Agreement meaning we can no longer refuse a refugee’s application on basis they’ve already crossed into an EU country. Dr Peter Walsh, Senior Researcher at the Migration Observatory at Oxford: “The government has recognised three quarters of asylum applications as valid over the last year. This is a significant shift compared to a few years ago, when the majority of asylum applications were initially refused (even if many of these were later overturned on appeal). We now see majorities of positive decisions across a range of groups, from young men to older women….”
Cheaper fish: The House of Lords European Affairs Committee says a deal with Norway, Iceland and Liechtenstein signed in July, will mean cheaper fish in shops and supermarkets. Tariffs on the import into the UK of shrimps and prawns are removed, delivering savings of between £1m and £2.7m annually and Norway has agreed to cut certain tariffs for imports of UK fish feed from 10.5% to zero, thereby achieving annual savings of some £4.1m.
Yorkshire Bylines https://yorkshirebylines.co.uk/the-davis-downside-dossier/