The start of the new
It did not take long to spot worrying gaps in what the Prime Minister described as “a good deal for the whole of Europe.” The ink on the EU-UK Trade and Cooperation Agreement had barely dried on Christmas Eve night as early scrutiny exposed glaring omissions from the new 1246-page trade deal.
Top of the list is the realisation that financial and other services, the 80% kingpin of the British economy, are not part of the deal. An international correspondent explained[i] that as one of the 28 EU Member States the U.K. had profited from easy access to an integrated market. That, however, looks set to change.
Britain’s massive surplus of $24 billion on trade in services with the EU in 2019 provides proof positive of what Britain is surrendering. Compare this surplus with the new trade deal’s focus – the trading of goods - where in 2019 the U.K experienced an enormous deficit of $129 billion in its business with Europe.
UK professional qualifications will no longer be recognised in the EU.[ii] This makes it harder for UK citizens to work in the EU. A similar deprivation is evident in further education where the UK will no longer take part in the EU-wide Erasmus university exchange programme. Northern Ireland students, fortunately for us, will continue to participate in Erasmus, their fees being paid by the Irish Government.
The deal diminishes Britain’s law enforcement apparatus.[iii] Two examples illustrate the point. One is that UK policing has forfeited its use of the Shengen Information Systems (SIS), the database with real-time alerts to locate serious criminals and terrorists. Take a deep breath and consider this metric - when inside the EU, British police accessed SIS over 1.65 million times a day.
The second example of a reduction in the UK’s policing is this. Britain is losing its seat on Europol, the EU’s policing agency. These SIS and Europol examples underscore security consequences of UK’s designation as a third country. I’m reminded of the Albert Camus novel, L’Étranger (the outsider).
Another UK newspaper estimates that frictionless trade will be negated by the need for “massive” new paperwork.[iv] British business can expect to complete 200 million customs declarations annually.
Recent developments
Subsequent woes experienced by Britain’s commercial trading interests validate the Office for Budget Responsibility’s analysis (the Government’s forecaster) that the deal will cost the U.K.4% in permanently lost GDP. Scotland’s fishermen are angry about the barriers to unfettered access to its main market, the EU, and the existential threat to its coastal communities.
The Government’s empathic response to the plight of Scotland’s fishing industry was represented by the Leader of the House of Commons[v] Jacob Rees-Mogg. Using just a dash of jingoistic arrogance, he pronounced to Her Majesty’s Parliament that
“...the key thing is we’ve got our fish back... they’re now British fish and they’re better and happier fish for it...”
If Scotland’s post-Brexit drive for constitutional change should ever need an upper class Conservative advocate, JRM could be the very man to influence public opinion without having to “walk 500 miles” from the shires.
A report by the national broadcaster describes the severe problems being encountered by UK meat exporters[vi] whose trade has reduced by 75% because of customs systems they argue are “not fit for purpose.” The Brexit pledge to “take back control” is failing British business in the country’s first month of sovereign independence. French meat importers are quoted as having to seek alternative suppliers in Spain and Ireland.
The broadcaster’s report adds that HMRC is estimating the extra cost to UK business of customs declarations alone as £7 billion. Tellingly, it concludes that significant additional cost and complexity are here to stay (as opposed to being temporary teething problems).
Supportive evidence for the plight of exporters, this time from non-food sector, details the new export levies on British business.[vii] In addition to one that EU customers must pay on receipt of British goods, there is a “Brexit charge” or export fee per item, a “deferment account fee,” and a “disbursement charge” which differs in each EU country.
Brexit is also causing collateral damage to its nearest neighbours. Ireland transports most of its exports to Europe using Great Britain as a land-bridge. Complaints from the Irish Freight Transport Association to Government have articulated warnings about disruption to supply chains.
Irish reports rationalise the EU responsive attitude.[viii] It is that Britain has received what it asked for in the negotiations. Britain was offered a way to avoid onerous checks on animal and food products if it aligned with the EU. It declined on the basis that the point of Brexit was to diverge. Ireland has been told that Britain’s choices include the strict rules of origin that are impeding EU goods destined for Ireland if they come via a British distribution hub.
Already and with impressive alacrity, more and more of that passing trade is now being shipped direct to France and Spain on longer sea crossings from ports like Rosslare and Dublin. Britain’s loss will benefit ports like Rosslare whose business seems likely to expand substantially.
The same report[viii] referred to objections from British touring
musicians and entertainers to the need for visas to perform in the EU. Apparently the UK declined an EU offer to
exempt performers from the visa requirements.
The report concludes that
Irish Times report 9 January 2021 LeaveEU migrates to EU
“throughout the talks, it was Brussels that sought a closer relationship and London that insisted on the deepest break.”
This sounds like the proverbial hard Brexit.
Bonis nocet quisquis pepercerit malis
Regardless of it now being a fait accompli, literally and metaphorically, many adhere to the truth that Brexit remains a bad policy move for the UK and for its relations with Europe. All of the authoritative empirical evidence during the referendum campaign demonstrated the point (see below[ix]), as in QED. “Project fear” was the vacuous response to facts and datasets from Brexit supporters in Government. Now that the UK has left, the signs from early monitoring are ominous for the impact on Britain’s economy.
While some suggest that there’s nothing we can do about Britain’s new status in Europe, my civic conscience begs to differ. The Latin phrase (above) occurs – he hurts the good who spares the bad. Paraphrased otherwise by the Dublin orator and statesman Edmund Burke - evil flourishes when the good do nothing.
Nobody here wants what happened in Washington on 6 January to be trumped elsewhere. People here voted to remain in Europe, as did our “kith and kin” in Scotland. Likewise did the residents of the nation’s capital - flatly rejecting the DUP’s expensive advertising on the national stage in 2016 to persuade Londoners to vote leave. I debated the issues correspondingly with my MP, a capable lawyer, to explain the errors of her DUP party’s ways (before she lost her constituency seat in December 2019).
That is why after examining the evidence from various sources to inform the drafting this article, it comes as serendipity to read an experienced commentator’s heart-breaking description of what is now the case, “British industry in chaos.”[x] Her numerous examples of the economic damage being wrought - from horse racing show jumping and motorsport, to fishing, to road haulage, the car industry and the fashion industry and more - none are good advertisements for Brexit. Bleak is one word.
What Brexiteers proudly call “this great nation” deserves better, it was promised far more than chaotic sovereignty.
©Michael McSorley 2021
Postscript:-
This Brexit series comprises of the following articles:-
Brexit 25 July 2016[xi]
Global Populism 27 Feb 2017[xii]
Brexit 14 Months On 30 August 2017[xiii]
Our Precious Union 29 August 2018[xiv]
Arguments for/against Brexit as Parliament debates UK/EU Deal 7 December 2018[xv]
Brexit Briefings to DUP MP Jan/Feb 2019 5 March 2019[xvi]
Brexit lampooned 27 April 2019[xvii]
How can the UK’s new PM resolve the Brexit conundrum? 23 July 2019[xviii]
Omnes ad Unum Conservatives and DUP 24 September 2019[xix]
Election Communication 8 December 2019[xx]
Leaving Britain Undone 31 January 2020[xxi]
Brexit Trade Deal: What Price Sovereignty? 30 December 2020[xxii]
Just how good is the UK’s trade deal with the EU? 22 January 2021
Bibliography and references
[i] Benjamin Mueller The New York Times updated 4 January 2021 “Brexit Deal Done, Britain now Scrambles to see How It will Work”
[ii] Oliver Wright The Times 26 December 2020 “How Britain and Europe agreed to differ”
[iii] Observer 27 December 2020 “The deal is finally done – but many crucial issues still remain unresolved”
[iv] https://www.independent.co.uk/news/uk/politics/brexit-trade-deal-contents-boris-johnson-b1778736.html
[v] The Independent 14 January 2021 https://www.independent.co.uk/news/uk/politics/jacob-rees-mogg-fish-brexit-b1787271.html
[vi] Simon Jack Business Editor BBC news 15 January 2021 “Post-Brexit customs systems not fit for purpose, say meat exporters” https://www.bbc.co.uk/news/business-55680315
[vii] Toby Helm and Michael Savage Observer 17 January 2021 “Shock Brexit charges are hurting us, say small firms”
[viii] Naomi O’Leary Irish Times 16 January 2021 “Irish companies’ mounting woes unlikely to convince EU to revisit new trade regulations”
[ix] https://michaelmcsorleyeconomy.blogspot.com/2019/07/how-can-uks-new-pm-resolve-brexit.html
[x] Polly Toynbee The Guardian 18 January 2021 “Brexiteers are waking up to the damage they’ve done” https://www.theguardian.com/commentisfree/2021/jan/18/brexiters-damage-horse-racing-fishing-haulage-industry-chaos
[xi] https://michaelmcsorleyeconomy.blogspot.com/2016/07/brexit.html
[xii] https://michaelmcsorleyeconomy.blogspot.com/2017/02/global-populism.html
[xiii] https://michaelmcsorleyeconomy.blogspot.com/2017/08/brexit-14-months-on.html
[xiv] https://michaelmcsorleyeconomy.blogspot.com/2018/08/our-precious-union.html
[xv] https://michaelmcsorleyeconomy.blogspot.com/2018/12/arguments-for-and-against-brexit-as.html
[xvi] https://michaelmcsorleyeconomy.blogspot.com/2019/03/brexit-briefings-to-dup-mp-jan-feb-2019.html
[xvii] https://michaelmcsorleyeconomy.blogspot.com/2019/04/brexit-lampooned.html
[xviii] https://michaelmcsorleyeconomy.blogspot.com/2019/07/how-can-uks-new-pm-resolve-brexit.html
[xix] https://michaelmcsorleyeconomy.blogspot.com/2019/09/omnes-ad-unum-conservatives-and-dup.html
[xx] https://michaelmcsorleyeconomy.blogspot.com/2019/12/election-communication.html
[xxi] https://michaelmcsorleyeconomy.blogspot.com/2020/01/brexit-leaving-britain-undone.html
[xxii] https://michaelmcsorleyeconomy.blogspot.com/2020/12/brexit-trade-deal-what-price-sovereignty.html
