There has been a huge exodus of British companies to the EU. The Yorkshire Bylines Digby Jones index captures just a few and you would have to believe the real numbers are far higher. The Guardian report that I posted about yesterday showed 500 enquiries from UK businesses about moving to Holland alone since 1 January. It seems to me most of these are either financial companies, banks, insurers and traders or manufacturers and suppliers opening distribution hubs to avoid paperwork.
There appears to be no corresponding move by EU businesses to move in the opposite direction.
So, I was fascinated to read a piece in Briefings for Britain, which as usual, seeks to cast doubt on reality and explain the problem away. Media reports about the issues are apparently due to "negative bias" and UK businesses setting up in the EU are only "presented" as a loss. Presumably, they think it's actually a good thing? They say:
"As for the other side of the equation, the negative bias of media reporting is informative. On the one hand, British companies’ setting up subsidiaries in the EU is presented as a loss for British industry. On the other, when small EU firms no longer export to the UK because of customs difficulties, this is presented as restricting British consumers – rather than as a problem for EU business which the Commission has an incentive to resolve.
The article totally glosses over the size of the single market.
"The elephant in the room, however, is that Britain is a net importer from the EU – meaning that European businesses, on average, are more likely to set up British subsidiaries than British firms will in Europe, once lingering uncertainty around COVID, vaccine deliveries and the future relationship is resolved. "
Their link is to an FT report from 2018 suggesting a rush of EU companies enquiring about setting up local subsidiaries in the UK and no doubt some have. However we see no sign of that happening in practice at the moment. I suspect a lot of them already had distribution centres before Brexit.
This ignores the uncomfortable fact that the share of an EU company's revenue made up of sales into the UK will, on average, be relatively small compared to a UK company's sales into the EU. Hence the cost of setting up a local subsidiary is that much more difficult to justify and the loss of business easier to manage. Being the larger market, they also have more scope to find new outlets. Size matters for EU businesses.
It also matters for UK companies. Because an EU customer will be far more able to source from alternative local suppliers than a UK business will.
The article also ignores the fact that if a company on either side hadn't set up local manufacturing or distribution before Brexit, one assumes it was because it was economically cheaper to ship direct because volumes didn't justify anything else. If they are forced to open a foreign subsidiary to handle stocks there will still be additional costs and prices will rise, making them less competitive.
As for media bias, this must be a joke. The British media has in the main been pro-Brexit for 30 years or more. The Mail, the Express, The Telegraph and a host of right wing magazines and blogs can't seem to find any evidence of this reverse flow that Briefings for Britain thinks is going on unreported.
As an aside on this topic I note we will soon have a rival to Fox News fronted by one Andrew Neil, former Murdoch employee and BBC interviewer. It is to be called GB News and has apparently raised £60 million, some of it from The Legatum foundation.. On Twitter he gets very shirty if anybody suggests he is less than impartial yet going back through his tweets (and there are a LOT) one has difficulty finding any at all which mention the growing chaos at our ports or the loss of jobs caused by Brexit. I could not find one in the whole of January even about the Scottish fishing industry.
You can see any number of his tweets attacking the EU, Germany, Macron, von der Leyen, the SNP and others. He has even tweeted that the gravity model of world trade doesn't apply to us. What does this say? Make up your own mind but I would think he is clearly a committed Brexiteer.
But back to Briefings for Britain. They are asking their readers to believe that the right wing pro-Brexit media in this country, with all their journalistic resources, either can't or won't publish what would be a great Brexit good news story. Imagine the headline in the Daily Express: "Jobs Boom as EU companies flood into Brexit Britain."
It would sound good wouldn't it? The truth is it isn't happening and Briefings for Britain (formerly Briefings for Brexit) will sooner or later have to admit that it has all been a terrible mistake. We can only be buoyed up when the people behind these rabidly anti-EU outlets struggle to argue any sort of case convincingly and resort to challenging the very idea of reality.
