Boris Johnson's government is 'gaslighting' Britain about the realities of Brexit, critics say
London (CNN)Andy Trust has been exporting fish from Cornwall to continental Europe for 20 years. However, the past seven weeks have given him cause to contemplate shutting down the entire European operation of his fish merchants, Ocean Harvest. "The cost of sending fish into Europe has more than trebled. In an industry that operates on thin profit margins, it could destroy British fishing," he says.
It's been seven weeks since the UK completed its departure from the European Union and Boris Johnson's post-Brexit trade deal came into effect.
In
that time, British exporters have struggled with new trade barriers. In
some cases, orders have been slowed down by paperwork; in others, fresh
produce has failed to reach its destination in time, forcing it to be
destroyed. All of this is a direct result of the UK's policy decision
to leave the EU's single market and customs union.
For
companies who built their businesses on unfettered access to that
market, these barriers -- put up virtually overnight and with little
warning -- have had big consequences. And while it could be argued that
these companies had years to prepare for Brexit, the post-Brexit trade deal was only agreed on December 24 and came into force on January 1.
Under
these circumstances, you'd expect a government to be doing everything
in its power to help struggling businesses. However, critics fear that
the Johnson administration has buried its head in the sand: The Prime
Minister has called the difficulties no more than "teething problems."
"Only
some of the issues we are seeing at present could be legitimately
described as 'teething problems,'" says Adam Marshall, director of the British
Chambers of Commerce. "Yes, some firms are facing adjustment ... But
others are seeing their entire business model up-ended, and their
ability to trade successfully undermined."
Last
weekend, Britain's foreign secretary, Dominic Raab, said that he
understood some companies were struggling as a result of the sudden
change, but that "if you take a 10-year view ... the growth
opportunities in the future are going to come from emerging and
developing economies around the world."
Which
isn't much comfort for businesses that export fresh produce, such as
Scotland's fishing industry. "For many businesses, trading with the EU
now feels like a high-risk, long-odds gamble," says James Withers, chief
executive of Scotland Food and Drink, a lobby group. "The trading
system is more costly, complex, slower and unreliable. For our European
customers who need guarantees of products like salmon arriving at a
certain time, reliability is everything."
Far
from being teething problems, the slower, less reliable trading systems
Withers describes are the consequence of new paperwork on things like
customs, proof of a product's origin, and sanitary standards. In the
case of companies that import parts from Europe before exporting a
finished product, the correct paperwork is needed at every stage of the
supply chain, leaving British exporters at the mercy of European firms
which are also getting their heads around the complex new processes.
Members
of the seafood industry have protested against the post-Brexit
requirements that they say have caused a sharp drop in exports to the
European Union.
"Even
though impact of FTAs is usually analyzed over a period of time, for a
government minister to say we should look at the impact of this deal in
10 years when people are losing jobs and money is a bit tone deaf,
especially when you consider that it was down to the government to
provide guidance to allow businesses to prepare," says Anna Jerzewska,
founder of Trade and Borders, a consultancy which assists exporters and
importers across Europe.
If
the current situation sounds dire, some believe it will get worse.
Withers points out that controls on EU food imports are due to start in
April and that stockpiles are being depleted. And when Europe's
hospitality businesses emerge from lockdown, demand for food and drink
will pick up. "If we can't supply them, our competitors will."
Unfortunately for exporters, neither the UK government nor the EU seem in the mood to reopen the deal, after years of painful Brexit negotiations.
"Politically, the government made a decision to prioritize regulatory
autonomy over economic integration with the EU and the trade deal
reflects that -- it does little to facilitate trade," says Sam Lowe, a
senior research fellow at the Centre for European Reform.
For
the time being, these changes have mostly affected those looking to
export goods. However, there is also major concern at the long-term
impact that Johnson's hard Brexit will have on the UK's services
industry.
"When
we emerge from lockdown and British actors, musicians and people
providing professional services start looking at taking jobs in Europe,
they will be introduced to a world of visas, work permits and European
embassies that they never had to worry about before," says Lowe.
One
of the biggest fears of a hard Brexit was the impact it would have on
the city of London, the world-class financial hub that has been the envy
of Europe for decades. While London has not seen the flight of jobs
many predicted, billions of euros in share trades have switched to
Amsterdam from London since January 1. This doesn't have much of an
immediate impact as the work can still be done by staff in London, but
if this trend continues, it could undermine Britain's status as the
financial capital of Europe and impact future inward investment.
It
had been known for a long time that financial services were not going
to be covered in the trade deal. In some respects, that made life easier
for financial firms. "Because it's such a heavily regulated sector,
there hasn't been too much disruption or job losses," says Lowe.
However, he believes that the impact could come later down the line. "If
you're looking to easily sell new financial services across Europe in
the future, where do you headquarter yourself: Amsterdam or London? The
answer isn't as clear cut as it once was."
Many
analysts thought that the initial trade deal would smooth the path to
some kind of future pact on financial services, but with the UK
government being bullish about the merits of its agreement and Brussels
making noises about taking London's business, things don't look
promising.
"There
might be closer cooperation, but I doubt it at the moment. What's more
concerning is the government's gaslighting. They don't admit that
there's a problem; they play it down; they say to wait 10 years. Which
one is it? Is it all fine or do we need to wait 10 years? And what are
the people currently suffering supposed to do in that time?" says Anand
Menon, professor of European politics at King's College London.
Liz
Truss, the international trade secretary, has refused to answer
questions from lawmakers on their concerns about the deal, while the
government says it has no plans to publish an impact assessment.
Others
are pessimistic about the long term, and unsure if the government is
unaware or in denial about how bad things could get. "It's entirely
possible that 10 years from now, the UK will have pivoted to exporting
beyond Europe," says Simon Usherwood, professor of politics at the
University of Surrey. "My concern is that it will be as part of an
overall reduction in trade, meaning a smaller economy and, ultimately,
job losses."
Alastair
Campbell, who was former Prime Minister Tony Blair's director of
communication, is less charitable. "It makes my blood boil. I think they
are in denial because they cannot handle the consequences of their
policies. They are battering some of our greatest industries and trying
to distract everyone by picking fake fights and starting culture wars."
Boris Johnson's visit to a fish processing plant in the English county of Suffolk was a key event in his campaign for Brexit.
This
is all going to get very uncomfortable. Multiple lawmakers, including
those from Johnson's own party, told CNN that they are still receiving
many emails from constituents who are facing troubles. However, where
initially they sought advice, many are now just expressing their
frustrations.
"They
know we can't do anything in a lot of instances. The government's
websites are not very helpful and they simply are not getting the help
they need," says one lawmaker on the government payroll. "It's
difficult. They are angry that people are canceling orders and that I
personally cannot get a French visa for them," they add.
A
government spokesperson told CNN that it was "committed to ensuring
that businesses get the support they need to trade effectively with
Europe and seize new opportunities as we strike trade deals with the
world's fastest growing markets."
Authorities
were operating export helplines, running webinars and offering support
from advisers, the spokesperson said, adding that a £20 million ($28m)
fund to help small businesses adjust had also been established.
But
back in Cornwall, Andy Trust doesn't see much hope for the future. "The
British public will never eat enough fish to make up for lost European
business. For every man at sea, another 20 jobs rely on them on shore.
Boris Johnson spouts on about investing millions in fishing over the
next five years. In five years, he might have destroyed the whole
industry."
Of
course, the UK is the world's fifth largest economy with many talented
people working in the logistics industry. It is entirely possible that
the situation could improve. However, for that to happen, Boris Johnson
and his cabinet will need to convince their critics that they are
operating in the realms of reality.
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