Brexit

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New post-Brexit trade restrictions have pushed up the cost of parts and raw materials for two thirds of small British manufacturers surveyed last month, and a majority reported some level of disruption. The survey of nearly 300 firms, conducted by consultants South West Manufacturing Advisory Service (SWMAS), adds to an existing picture of disruption from new customs checks that came into force on Jan. 1 for goods trade with the European Union. “Price hikes in the supply chain have been immediate, and we are hearing tales of lead times being extended on raw materials,” said Nick Golding, managing director of SWMAS. Some 65% of manufacturers reported higher costs, and 54% said they had greater difficulties exporting goods to the EU.

 Brexit causing supply problems for small UK manufacturers: survey | Reuters

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Emily Thornberry has accused the government of failing to carry out an economic impact assessment of Boris Johnson’s Brexit deal, after two key government departments told the shadow international trade secretary they had no such document. As official figures showed a 40.7% decline in exports to the EU in January, Thornberry wrote to the international trade secretary, Liz Truss, to ask why she had published assessments of many much less significant deals, but not the crucial Christmas Eve trade agreement with the EU. 

When Thornberry challenged Truss in the House of Commons to produce economic analysis of the deal in January, the minister referred her to the EU taskforce in the Cabinet Office, which spearheaded the fraught negotiations. But when Thornberry made a freedom of information request to the Cabinet Office, she was referred to the Treasury, which replied that it “does not hold a specific document meeting the terms of your request”. Johnson’s spokesman had previously said the government would not be publishing its analysis of the economic impacts of the deal, but Thornberry has now written to Truss to ask whether the government failed to carry out an analysis at all.

“For an agreement of such immense importance for our country’s economy, business, jobs and trade, that is utterly staggering. And when we compare it to the approach taken to the assessment of every other UK trade deal signed over the last two years, it makes no sense whatsoever.” She gave the example of the department’s recent publication of analysis of the deal struck with Albania, a country with which trade was worth £45m in 2019. Trade with the EU is worth 15,000 times as much.

 Labour suggests ministers failed to do analysis of Brexit deal | Brexit | The Guardian

Sooo:

• The government didn't provide any impact analysis on the biggest trade deal change in the country's history (since joining the EU) while doing so on every other trade regime changes. 
  
• And here's why, because they knew the outcome would be every bit the disaster it has turned out to be.
  

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A dramatic 41 per cent plunge in exports of goods to the EU in January is the first official indication of the profound impact of Brexit on UK trade. But the effects for businesses were clear before the new year as they struggled with a mountain of extra paperwork, electronic forms and safety checks. While the government sought to downplay alarming trade figures on Friday, claiming that the record fall was due to temporary factors including Covid-19 lockdowns, firms across the country tell a different story. Some of the effects are probably short-term, and trade experts are expecting a partial recovery over the coming months but businesses are now burdened with significant extra costs and some feel guidance from the government has been severely lacking.

But the impact of Brexit is undeniable. Official figures show food and live animal exports to the EU fell by 54 per cent in January compared to 12 months earlier. Fish and shellfish exports plunged 83 per cent from £92m to £16m. That was despite Boris Johnson’s government making fish a totemic issue during negotiations with the EU.

Ian McCulloch founder and managing director of gin maker Silent Pool Distilleries says “nothing positive has happened yet” for his company as a result of leaving the EU. “We have increased export paperwork, cash is tied up in raw materials from the EU as we have to hold greater stocks; there has been a massive increase in shipping costs, driven in part by the government using containers as temporary storage at ports,” he says.

 Brexit: UK businesses battle with red tape and higher costs as trade with EU plunges | The Independent

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More than 440 financial firms have shifted thousands of jobs and £1 trillion of assets out of the UK and into the EU because of Brexit, with more pain still to come, according to new research. A study by the New Financial think tank indicates that Brexit has hit the City of London harder than first thought and the impact is likely to grow.

It found that banks have shifted around £900bn of assets from the UK - around 10 per cent of the total assets held by the UK banking system. Insurance firms and asset managers have moved a further £100bn. "The worse news is that this analysis is almost certainly a significant underestimate of the real picture," the report said. "We are only at the end of the beginning of Brexit,”

 Banks and insurers move £1 trillion of assets out of UK due to Brexit | The Independent

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As the UK faces labour shortages, a petrol crisis, and potentially empty shelves in the lead up to Christmas, O’Brien slammed Conservatives who now insist that this was all part of the plan. 

Speaking about the Conservative u-turn on issues they once dismissed as Project Fear, O’Brien said: “From the governor of the Bank of England right through to the head of most FTSE 100 companies and every prime minister this country has ever had - everybody who explained and predicted what is happening now was shouted down by the people now in power.” O’Brien said the government has now moved from claiming predictions of labour shortages and empty shelves were ridiculous to claiming it was always part of their plan.

He said: “That’s what they’re doing to you now, these people, led by Boris Johnson and Jacob Rees-Mogg and the rest of them. Getting away with it, not properly held to account for it, barely even questioned about it - they are going from claiming ‘it was all a load of scaremongering ‘remoaner’ Project Fear nonsense’ to claiming everyone knew this was going to happen.

O’Brien said when it comes to business, business owners are now being blamed for not being prepared for “unprecedented and entirely unnecessary” problems the government told them not to worry about. “The message that Downing Street is giving to those businesses is ‘it’s your fault for not being ready to deal with all the things we told you weren’t going to happen’,” he said.”

 James O’Brien explains how Brexiteers have now made ‘Project Fear’ part of their plan | indy100

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The impact of Brexit on the UK economy will be worse in the long run compared to the coronavirus pandemic, the chairman of the Office for Budget Responsibility has said. Richard Hughes said leaving the EU will reduce the UK's potential GDP by about 4% in the long term. He said forecasts showed the pandemic would reduce GDP "by a further 2%". "In the long term it is the case that Brexit has a bigger impact than the pandemic", he told the BBC. His comments come after the OBR said the cost of living could rise at its fastest rate for 30 years, with suggestions inflation could hit almost 5%.

 Impact of Brexit on economy 'worse than Covid' - BBC News

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A British cheesemaker who predicted Brexit would cost him hundreds of thousands of pounds in exports has called the UK’s departure from the EU single market a disaster, after losing his entire wholesale and retail business in the bloc over the past year. Simon Spurrell, the co-founder of the Cheshire Cheese Company, said personal advice from a government minister to pursue non-EU markets to compensate for his losses had proved to be “an expensive joke”. “It turns out our greatest competitor on the planet is the UK government because every time they do a fantastic deal, they kick us out of that market – starting with the Brexit deal,” he said. Spurrell predicted in January that Brexit would cost him £250,000 in sales. “We lost £270,000, so I got one thing right,” he said, describing the post-Brexit EU trade deal as the “biggest disaster that any government has ever negotiated in the history of trade negotiations”. His online retail business was hit immediately after the Brexit negotiator David Frost failed to secure a frictionless trade deal addressing sales to individual customers in the EU. Spurrell said he had lost 20% of sales overnight after discovering he needed to provide a £180 health certificate on each order, including gift packs costing £25 or £30. He said the viability of his online retail had come to a “dead stop”.

 Brexit: ‘the biggest disaster any government has ever negotiated’ | Food & drink industry | The Guardian

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One year to the day since the UK finally left the European Union, the people of Britain believe Brexit has done the country more harm than good, according to a new poll. The exclusive Savanta survey for The Independent reveals that, on issues ranging from the economy to red tape to Britain’s ability to control its borders, more voters believe Brexit has worsened the UK’s position than improved it. Almost six out of 10 (57 per cent) believe Boris Johnson lied to them about what Brexit would be like during the bitter referendum campaign of 2016. And by a clear margin, they said that the Remain campaign’s forecasts of damage to the economy and increased red tape from Brexit have proved more accurate than the Leave campaign’s promises, such as the claim on Mr Johnson’s bus that EU withdrawal would deliver £350m a week for the NHS. By a slim majority of 51 to 49 per cent respondents said that if they could vote again, they would opt to rejoin the EU – with younger voters hugely more enthusiastic than the old for renewed membership.

 One year on from Brexit, poll finds voters believe it has harmed UK’s interests | The Independent

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Russia is a mafia state, and its elite exists to enrich itself. Democracy is an existential threat to that theft, which is why Putin has crushed it at home and seeks to undermine it abroad. For decades, London has been the most important place not only for Russia’s criminal elite to launder its money, but also for it to stash its wealth. We have been the Kremlin’s bankers, and provided its elite with the financial skills it lacks. Its kleptocracy could not exist without our assistance. The best time to do something about this was 30 years ago – but the second best time is right now.



We journalists have long been writing about this, but it is not simply overheated rhetoric from overexcited hacks. Parliament’s intelligence and security committee wrote two years ago that our investigative agencies are underfunded, our economy is awash with dirty money, and oligarchs have bought influence at the very top of our society. The committee heard evidence from senior law enforcement and security officials. It laid out detailed, careful suggestions for what Britain should do to limit the damage Putin has already done to our society. Instead of learning from the report and implementing its proposals, Boris Johnson delayed its publication until after the general election and then, when further delay became impossible, dismissed those who took its sober analysis seriously as “Islingtonian remainers” seeking to delegitimise Brexit.


That is the crucial context for Johnson’s ludicrous claim this week to the House of Commons that no government could “conceivably be doing more to root out corrupt Russian money”. That is not only demonstrably untrue, it is an inversion of reality. On leaving the European Union, we were told that we could launch our own independent sanctions regime – and this week we saw the fruit of it: a response markedly weaker than those of Brussels and Washington.

 Boris Johnson claims the UK is rooting out dirty Russian money. That’s ludicrous | Oliver Bullough | The Guardian

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Brexit is “largely to blame” for billions being lost in trade and tax revenues in recent years, according to a new study by top economists. The Centre for European Reform (CEF) said that by the end of last year, Britain’s economy was 5.2 per cent – or £31bn – smaller than it would have been without Brexit and the Covid pandemic. “We can’t blame Brexit for all of the 5.2 per cent GDP shortfall …. but it’s apparent that Brexit is largely to blame,” said John Springford, author of the CEF study. The CER modelled the performance of a “doppelganger” UK – if the nation had remained inside the EU’s single market – using data from other advanced economies similar to the UK. Mr Springford said “disentangling” the economic effects of Brexit and Covid in recent years was “difficult” – but said it was clear that the bigger negative impact had come from Brexit. 

Mr Springford said the sluggish economic performance after the end of lockdowns in 2021 also showed that the “sizeable” shortfall was “mostly Brexit and not Covid”. “The UK ended Covid restrictions sooner than many of its peers, thanks in part to starting its vaccination campaign early in 2021,” he said. “That should have made its recovery from Covid faster than other countries, not slower.”

The report added: “British politicians may find it difficult to ignore the central role of Brexit in the UK’s economic problems for much longer.” It comes as British firms point the post-Brexit red tape which is continuing to create costly hold-ups in trade with the EU. One seafood firm in Northumberland spoke out about the “ridiculous” paperwork which almost caused a £50,000 delivery to be destroyed, since a form signed 43 times did not include a printed name. The Coquet Island Shellfish Company told the BBC the issue cost the firm up to £15,000 to sort out after several delays. “There have been no discernible benefits of Brexit. Everything takes longer and costs more,” said sales director Jane Pedersen. An influential committee of MPs recently warned that it was uncertain whether the post-Brexit free trade agreements negotiated by Boris Johnson’s government will provide any “actual economic benefits”.

Brexit ‘largely to blame’ for £31bn loss to UK economy, study finds | The Independent

• Turns out, the Common Market was an effort in creating a level playing field and avoid bureaucracy, facilitating trade, the Brexiteers have it backwards.