The Davis Downside Dossier

Cranswick Group, a North Yorkshire food producer, has been forced to recruit 400 butchers from The Phillipines in response to what they say are challenges in recruiting highly skilled staff “directly resulting from post-Brexit immigration policies.” According to CEO Adam Couch in the most recent accounts, this “has come at a significant cost to the business” but has allowed them to continue serving UK customers “when others in the sector have had to cut back production due to ongoing labour shortages.”

A survey by Bibby Financial Services, a multinational company providing invoice financing to small and medium-sized enterprises (SMEs) reveals that 58% of Britain’s SMEs that trade internationally are struggling with tariffs, customs, and other barriers. It is said to be the single most frequently cited challenge, ahead of the cost of doing business overseas and currency fluctuations.

A garden centre in Kent claims Venus flytraps are in short supply due to Brexit. Plants imported from the EU now require a certificate which means small orders must have the same paperwork as larger batches. Tim Holmes from Tunbridge Wells Garden Centre, part of the Blue Diamond Group, claims that his group has lost about £30,000 and is experiencing delays in the plants reaching their shelves. Mr Holmes said, “We can't just get one or two trays through anymore, there's legislation involved that is making it really hard to get hold of them.”

The British Retail Consortium (BRC) has warned Rishi Sunak that a number of measures laid out in last week’s autumn statement could add to inflation next year. The retailers trade body said the government risked prolonging the cost of living crisis by driving up the cost of doing business on the high street with Brexit red tape and higher taxes. The cost of managing post-Brexit import checks and labelling rules, due to come into force next year, is likely to be passed on to shoppers, along with increase in business rates and the rise in the living wage, it said.

The owners of what is said to be one of Grimsby's landmark seafood processing factories has announced its closure after recording an £8 mn loss. Management has blamed Brexit, the pandemic, and Russia's invasion of Ukraine. In a major blow to the town, Icelandic Seafood International will now pull out of the UK and will focus on its European operations.

A survey by the global professional services giant Ernst & Young says, “there’s no question that Brexit has reduced the UK’s relative attractiveness for some investors.” And claims: “Against the background of a rise in European FDI projects, the UK saw its project count decline in 2022 by 6.4% to 929, the lowest for eight years. As a result, the UK’s share of all European projects fell from 16.9% in 2021 to 15.6% in 2022, the lowest level in the past decade. The decline in UK projects likely reflected the political instability and uncertainty experienced in 2022, plus a trend towards net outbound project flows since Brexit.”

Having peaked in 2016, foreign direct investment (FDI) in the UK has now fallen for the fifth year in a row. The claim was made in The New European by Jonty Bloom who points to Brexit as the cause. In 2021, FDI into Britain was negative –£51.7bn, down from +£34.8bn in 2020 with more people taking money out of the UK than putting it in. The Department of Trade figures show the number of projects fell 32% between 2016 and 2021 (2265 to 1538).

According to Forbes Magazine, Brexit-related work permits for foreign players arriving in the UK has significantly reduced the number of foreign players eligible to play in the Premier League. A study by the University of Harvard pre-Brexit found that 58% of Premier League signings from abroad between 1992 and 2017 would not qualify for a work permit today. Famous players like Spain's Cesc Fabregas, who joined Arsenal from Barcelona aged 16 in 2003, would not be allowed to come at that age now.

The Office for Budget Responsibility's Economic and Fiscal Outlook for November 2023 claims that Britain's membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could add just £1.8bn to GDP in the “long run.” The OBR said: “if we take the long run to be 15 years after joining, this equates to around 0.04% of GDP.” They also maintain that the UK economy will be 4% smaller than if the UK had stayed in the EU, losing 100 times more than is gained.

The Daily Mail complains that Britain will have sent £24 bn to the EU by next April as part of the divorce bill for leaving the bloc, which Britain agreed to pay under the 2019 Withdrawal Agreement. Payments will continue until around 2064 for items like pensions when the total settlement could exceed £40billion. The report also says the EU is asking for £2.2 bn per year annually from next January for Britain's membership of Horizon, the EU's scientific programme.

The reduction in post-Brexit farming subsidies plus rising costs has led to some farmers reducing the numbers of cows and lambs they own, threatening a shortage of British beef and lamb in supermarkets. The National Farmers Union (NFU) say that upland farm businesses will lose an average of 37% of support payments as basic subsidies are phased out in favour of green schemes. NFU vice president David Exwood said the anticipated fall in government subsidies is “not a surprise to the farmers working in our hills”.

A report by the market research firm Arts Economics, says the post-Brexit 5% import VAT and significant red tape has hugely impacted EU-UK cross-border trade in the arts. Imports to the UK in 2022 were $2.8bn, less than half their level in 2015, the year before the Brexit vote. Anthony Browne, chairman of the British Art Market Federation (BAMF), told a conference in London that, “I don’t think I’ve experienced a more difficult time for our art market than now.”

A former player with the Scottish club Hibernian has suggested that post Brexit rules on the recruitment of EU footballers means English clubs are seeking out rising stars from north of the border rather than looking to the continent. Tam McManus said: “Brexit is now in play as English teams are now scouring our game rather than focusing on Europe in the way they used to.” It leaves Scottish clubs short of home grown talent.

An official of the Ulster Farmers’ Union, has told The House of Lords European Affairs sub-committee that post-Brexit divergence between UK and EU rules is putting the future of some farming sectors. Alexander Kinnear, gave as an example of the use of glyphosate on farms for the desiccation (drying) of crops where the EU is considering extending its use for another 10 years, but not for pre-harvest desiccation. “If we can’t use it for that purpose the viability of the cereal sector in Northern Ireland comes into question, which should set alarm bells ringing,” he said.

A Christmas market traditionally organised by The Danish Church in Hull is set to return on 25 November but organiser Dorthe Hostick, chair of the social fund at the church, says it has become more stressful and “much more difficult because of Brexit.” Ms Hostick added that: "We can still get most of the things that people want to buy but everything is more complicated. Before Brexit we could just order what we wanted and it all came on a pallet from Denmark just a few days later. Now it takes longer and it costs more because of import duty and clearance."

No money has been allocated to Northern Ireland from the £1bn levelling up funding because of Stormont's collapse as the Democratic Unionist Party (DUP) continues to refuse to join the power-sharing assembly in protest over the post-Brexit Irish Sea border. The Department for Levelling Up said no money has been provided to Northern Ireland "at this time" because of the absence of an executive and assembly. The DUP has described the move as "economic blackmail".

The Irish government has warned its exporters that from 31 January next year, new UK import controls will come into force with particular implications for agri-food exporters, including those using the UK land bridge. Export health certificates (EHCs) and phytosanitary (SPS) certificates will be required for medium-risk animal products, plants, and plant products imported into GB from the EU, including from Ireland. Pre-notification of imports of SPS goods from Ireland on the UK’s SPS import system (IPAFFS) will also begin.

The Bank of England’s deputy governor for markets and banking Dave Ramsden, has told MPs on the Commons Treasury committee, that the fallout from the 2016 Brexit referendum had “chilled” investment levels compared with other leading nations and contributed to a lower “speed limit” for the UK economy. Mr Ramsden said: “It’s hard to conclude otherwise, that the decision to leave the EU – that may have had lots of goods reasons for it – but that it has chilled business investment.”

Some citizens with dual UK/EU nationality face problems when the EU’s ETIAS (Electronic Travel Information and Authorisation System) comes into force in 2025. For example, a Portuguese national with dual UK citizenship traveling to the EU will be able to use ETIAS on the outbound journey but will find a manual passport check (see page 41) still needed for the return. This is because the UK’s interactive Advance Passenger Information (iAPI) system does not link the Portuguese passport to the grant of British nationality.

The Vet Times reports that a revolutionary once-daily oral solution for treating diabetes mellitus in cats has been launched. Senvelgo removes the need for twice-daily insulin injections. However, while the product has been approved for use in Great Britain, due to current post-Brexit arrangements, it will not be immediately available in Northern Ireland which depends on separate EU marketing authorisation.