Friday 19 March 2021

The newly forged Brexit shackles

Brexit is having the opposite effect to the one intended - and promised. The whole idea was to 'unshackle' ourselves from Brussels and to outcompete the EU. Instead we are drowning in red tape as we renew and redouble the shackles. Exporters of goods are battling to get products to the single market with delays and extra cost leg irons dragging them down.  I also posted earlier this week about how service providers are being handicapped, something the FT have now taken up. But the aviation business has now discovered a new shackle.

According to a story on Loadstar, a website for logistics and supply chains, UK charter air carriers are being discriminated against  compared to their EU competitors.

Andy Green, CEO of Jota Aviation says there is a policy in EU member states which allows a domestic airline to "object" to flight permits being granted to foreign operators.

“It’s nonsense; carriers can only object if they say they will do the work instead,” said Mr Green. “‘Non-objection’ requires the foreign carrier to contact the domestic carriers to see if they both can, and want, to service the flight instead. We, the domestic carrier, either say we will – and we service the flight – or we won’t, and then the foreign carrier gets it… the supply chain is unaffected.”

But the UK government deliberately opted against introducing such a policy, with sources claiming they were concerned about the impact on the country’s supply chains and thus confirming we need them more than they need us.

Since January, Loadstar say, according to some reports, the UK charter sector has seen 70 per cent of its business lost to EU counterparts and now the future of the industry is at stake..

One source told The Loadstar that customers said it no longer “thought it worth” approaching UK operators because of the difficulties associated with gaining EU permits, which even when granted can take two to three business days to be issued. This is while EU carriers are apparently able to obtain a UK Civil Aviation Authority permit in “hours”.

Green said,

“That [Brexit] deal has been the worst of both worlds as it has increased competition in our domestic markets while cutting us off from Europe – that notion of ‘taking back control’ went out the window, We are not against competition, but what we have here is not competition, it is an uneven playing field – if you’re a UK company, you’re screwed.”

UK pilots are sitting around while EU carriers take the business and there's nothing they can do except start a campaign.  Save UK Aviation Jobs, calls on the government to implement the reciprocal practice of “non-objection” but I wouldn't hold my breath for that.

It is another absolutely amazing example of a policy, probably the most disruptive one ever imposed on the British economy, and without even an economic assessment being published, not only not working but having totally the opposite effect to the one intended.

Instead of giving British industry a much needed boost it has detonated a bomb under many businesses which would otherwise be perfectly viable.

A few minutes ago we got the public sector borrowing figure for February. It was another new record, the highest level for a February since records began at £19 billion. Of course, most of this was due to the pandemic and lockdown measures. The BBC report the ONS saying that borrowing was £17.6bn higher compared to February last year.  In other words last year we had a surplus of £1.5 billion.

Total borrowing for the year so far has reached £278.8bn, another record, with total public sector debt having now now risen to £2.13 trillion.  The figures also showed a fall in tax revenue, notably from lower VAT, business rates and fuel duty.

However, when lockdown restrictions are eased we are going to need the economy to step up and do so quickly but many businesses will no longer be there and those that are will be cash strapped and now we learn, deliberately held back by the disastrous implementation of Brexit.

No amount of Johnson's boosterism laden speeches will change the underlying issue that Brexit is an unmitigated disaster.