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Brexit: Ian McConnell: Categorical verdict but will Boris Johnson listen to business?




UK business leaders, asked by The Herald last week whether they thought Brexit was hurting the economy, gave a categorical answer, with 75% saying ‘yes’.

Anyone watching the developing post-Brexit circus, mess or fiasco or whatever name you want to give it – households and businesses – shouldn’t be surprised at how conclusive this answer is. This is, of course, assuming that they are not hidden by ideology.

Many voters, from all walks of life, will obviously refuse, because of their love of Brexit, to admit that there is a problem. And it seems that this observation may well apply to some senior Conservative politicians.

This is why it is so important to collect the views of those on the front lines. Only 18% of business leaders who answered the Herald’s question at the Institute of Directors’ virtual world conference in Scotland last week believe that leaving the European Union does not hurt Britain’s economy, the others giving a “don’t know” answer.

The experience and opinions of business leaders on the post-Brexit situation should certainly carry weight and be listened to by the UK government.

READ MORE: Brexit shortage: Ian McConnell: Will anything make Boris Johnson see and tackle some sad mess?

The Johnson administration, of course, certainly has a duty to minimize the damage to the economy and to living standards caused by Brexit. So you would think that he would be happy to hear the business point of view and that he would try to act to at least alleviate the problems.

It would of course be even better if the Conservative government acted swiftly to provide an appropriate solution by taking steps to join the European Single Market, but to say that the chances of this distant gaze would be a no-brainer is the ideological fervor within Johnson. Cabinet.

In any case, there is no indication that the Johnson administration wants to listen. Many sane suggestions have been made to mitigate the damage. None were picked up.

An obvious decision would be to reverse the crackdown on immigration from EU countries to address the labor and skills shortages which are significantly hampering the recovery of the UK economy from the dire effects of the coronavirus pandemic. The only downside of such a crucial and eminently sensible move would be a specific political one for the Conservative government – given that for many Brexit supporters who brought Boris Johnson to victory in December 2019, the exit from the The EU was to attack immigration. It is a demoralizing reality. However, this is a problem only for the Conservative government and not for the country, which will only be further damaged by a persistent refusal to overturn the stupid post-Brexit immigration stance.

Another step that could be taken quickly is to agree to regulatory alignment and thereby dismantle some of the trade barriers put in place by the UK government. The Johnson administration’s denial of regulatory alignment was always going to maximize friction on trade – and it did. And reversing that reluctance would likely help the Johnson administration sort out some of the mess of a Northern Ireland protocol of its own making.

Brexiters seem increasingly low-key about denying the current chaos, although some are still trying to shift responsibility for what has been caused by the exit from the European single market into the pandemic. And we have to remember that this monumental mess is happening before the UK even begins in earnest its border controls on goods coming from the EU. For major food imports from the EU, the implementation of customs controls was delayed at the start of the year from April to October, with the unprepared Johnson administration’s updated plan to introduce them gradually from that point on.

He says much of the UK government’s lack of preparation for its own hard Brexit wished it felt the need to postpone for months the implementation of customs controls on imports of goods from the EU . After all, in recent years he has seemed keen to piss off our European neighbors wherever he saw an opportunity to do so, apparently with some degree of play for the Brexiter gallery.

Given the degree of chaos so far, we can only be extremely relieved that customs checks have been delayed. However, God knows how much worse things will get when they are finally introduced.

READ MORE: Ian McConnell: Brexit could have taken many forms. Cheshire cat Boris Johnson chose this one

Sometimes people are tempted to look at a mess and think it couldn’t be worse. This is a naïve point of view in many situations, and certainly in the context of the UK’s predicament after Brexit.

Louise Macdonald, National Director of IoD Scotland, summed up some of the woes well by highlighting the opinion of business leaders that Brexit is having a “significant” economic impact, following responses at the conference. business organization to the Herald issue.

Ms. Macdonald cited the effect on supply chains of skills shortages and pointed to rising costs and empty shelves. And she called for government action to prevent further damage to businesses.

The Johnson administration pulled the UK out of the European single market on December 31 of last year. The UK officially left the EU on January 31 last year, but a transition period in which the country remained in the single market ran until the end of 2020.

Last Friday, Ms Macdonald said: ‘While the pandemic may have distracted many from the impact of Brexit, comments from business leaders attending our global conference are clear: Brexit has a significant impact on the economy. In the last week alone we have seen skills shortages affecting the supply chains of many multinational companies and we are all too aware of rising costs and empty shelves in supermarkets. It is essential that the government heed these comments and act now to ensure that the business world is not further affected. ”

It is indeed necessary to act urgently. However, we should not, based on past experience, hope that the UK government will act to alleviate the problems caused by its hard Brexit.

The Johnson administration is firmly in denial mode when it comes to taking sensible immigration action that would at least to some extent help alleviate labor and skills crises in the logistics, hospitality and food production, to name just three. These crises are of course due in large part to the Conservative government’s Brexit and the end of free movement between the UK and the EU.

Also on the commercial front, the consequences of leaving the single European market are all too obvious in terms of damage to British exports. The cold numbers, of course, confirm this whether Brexiters are persuaded of the reality of the situation by them or not.

READ MORE: Brexit damage seen by 75%, independence referendum by 46% of business leaders in IoD survey

Industry figures released last week showed UK food and drink exports in the first half of this year were down £ 2bn from pre-Covid levels, by and large partly due to trade barriers erected by the Conservative government’s hard Brexit. British food and drink exports to the EU fell by more than a quarter in the first half of 2021 compared to the same period in 2019, before the coronavirus pandemic struck.

The Food and Beverage Federation, releasing the figures, noted that sales to non-EU countries in the first half of 2021 were up 13% compared to the same period last year. He added that they stood at £ 4.3bn in the first half of 2021, accounting for 46.6% of the UK’s total global food and drink exports “due to a return to growth in China, Singapore, Australia, Japan and the Gulf region ”.

The industry body said: “This increase means that non-EU exports are now almost back to pre-Covid levels.”

However, highlighting the much weaker picture of exports to the EU, he added: “Despite the return to growth in these countries, overall food and drink sales in the UK are down by $ 2 billion. pounds sterling from pre-Covid levels, due to a sharp drop in sales to the EU. A combination of the current impacts of the Covid-19 pandemic and new trade barriers resulting from new trade deals have resulted in a drop in exports to the EU of more than a quarter since the first half of 2019. Exports to almost all EU members US have declined significantly, including a loss of over £ 0.5 billion sterling sales to Ireland, while sales to Germany, Spain and Italy are each down about half since the first half of 2019. ”

Growth in the UK construction sector slowed sharply in August, amid ‘formidable’ supply chain pressures fueled by Brexit and the coronavirus pandemic, as material and personnel costs have “skyrocketed,” a key survey showed this week.

Expansion slowed last month in home construction, commercial property construction and civil engineering, the three subsectors covered by the Chartered Institute of Procurement & Supply and IHS Markit survey.

It is no wonder that business leaders, many of whom will face grim challenges on so many fronts caused by exiting the European single market while having to deal with the extremely difficult fallout from the pandemic, gave a ” yes ”adamant when asked if Brexit was hurting the UK economy.

The big question now is what the Johnson administration is going to do about it.




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