Wednesday 3 February 2021

Gove admits the truth

Gove admitted in parliament yesterday for the first time that the problems at the NI border are not due only to teething. They are endemic and permanent. He told MPs "there are a number of issues that I would not describe as teething problems; they are significant issues that bear on the lives of people in Northern Ireland, which do need to be resolved." He said the grace periods "need to be extended." He was the man who negotiated the deal and staunchly resisted any extension. The penny may finally be dropping,

Johnson denied there would be any checks at all. Now the DUP have called for the whole NI protocol to be scrapped. 

Bear in mind we are now negotiating with the EU the details of how an internal UK border is being operated and learning what life will be like in the future. We will always be negotiating from a position of weakness, constantly having to make concessions in order to get something.  Every member state, even small ones like Cyprus or Ireland, will have significant influence over us.

John Redwood keeps sticking his oar in and now seems to have entered the final stages of some rare mental condition akin to chronic cognitive dissonance where reality is totally denied in order to maintain some contradictory ideas. He tweeted:

UK and EU trade ran smoothly before January precisely because we were all in the single market. The NI protocol effectively keeps NI in the EU, creating the sea border but wherever the border is there will be problems. What he wants is to achieve is the invisible border that took 40 years of painstaking regulatory convergence to put in place but by another as yet unspecified means and in a few days. It ain't going to happen.

I seem to remember someone (Anton Spisak of The Tony Blair Institute perhaps) once saying that one of the things we have lost through Brexit is sovereignty over the main market we sell into, that is the single market and the customs union.  Nowhere has this become more true than in the shellfish industry. Before January shell fishermen had the lawful, automatic, unchallengeable right to sell produce into the SM, particularly France. 

They have now been advised that they are banned indefinitely because, I understand, our coastal waters are not yet clean enough. Up to December, UK seafood businesses were able to sell to EU, especially French, customers who were required to clean the oysters, mussels, clams, cockles, scallops or whatever in purifying tanks.  Since 1 January, UK firms have been able to send only pre-purified, ready-to-eat shellfish - accompanied by an export health certificate - to buyers in the EU's 27 member states.

It turns out the EU only allows in untreated shell fish from areas of the world with clean waters. Everywhere else must use purifying tanks before exporters are allowed to send produce. It turns out the UK does not have the capacity. Until we do, the shell fish business is stuffed.

The result of the TCA deal is more paperwork, more investment and a delay in getting product to market which means a lower price. So, even if the government pays for the tanks, supports fishermen with new boats and all the rest, their industry is effectively finished.  For them, Brexit was insanity, yet it's estimated 90% of them voted for it. 

I suspect this will be the story of Brexit in many other industries until we rejoin. Exports will be more bureaucratic, slower and more expensive.

In a Guardian report in the last few days, a survey by Make UK of its members showed that 60% of companies that had previously claimed they were ready for Brexit are “now experienc[ing] disruption” and are “also finding supply chains significantly impacted."

Yesterday, The Chamber of Commerce in Manchester says over a quarter of Greater Manchester firms think Brexit is having a negative impact on them with requests for help coming in ‘thick and fast’ amid cost increases and confusion about red tape.

I confess I have always thought it was optimistic to thing most companies were prepared for Brexit. The Manchester BCC survey probably includes at least another 50% who also think  they're ready when they are not. The vast majority of businessmen I dealt with in my career - and I'm talking of senior people, managing directors and so on - would get their information by word of mouth or through the pages of The Daily Mail or The Telegraph.  Very few seemed to live in the real world.

As bad as things are now, I still believe there are companies who have realised they are in trouble and those who have yet to realise it.  Beyond that not much.