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.
The ‘considerable’ upsides
DEFRA has announced that following a 2021 market access deal with Japan, UK farmers' processors and suppliers will be able to export fresh and cooked poultry meat into the Japanese market. The industry estimates that this market could be worth over £10 million in the next 5 years. The agreement's implementation had been delayed by an avian influenza outbreak.
The co-founder of Facebook, Dustin Moskovitz, now the CEO of software company Asana, has told The Times that Brexit means the UK has the independence to be a global leader in artificial intelligence (AI). Moskovitz said Brussels’ heavy-handed approach to regulation meant it was “better that the UK is out of the EU”. Speaking ahead of Rishi Sunak’s AI summit at Bletchley Park, he said he was “far more concerned about regulatory friction” in the EU than in Britain.
Moody's, the international credit rating agency has dropped its negative outlook on the UK, saying that "policy predictability has been restored" following last year's mini-Budget. The influential agency noted the UK's "more conciliatory" approach to EU trade and said increased friction due to Brexit had slowed the UK's bid to reduce inflation, which it sees returning to its 2% target in 2026. The move could mean marginally lower borrowing costs for the government's Debt Management Office (DMO).
Qkine, a Cambridge biotech company that manufactures high-purity, animal-free products for life science applications has identified the cultivated meat sector as an ideal opportunity for post-Brexit Britain to surge ahead. One of the founders, Catherine Hyvönen, told The Cambridge Independent “Leaving the European Union means we now have the capability to take something to market in the UK without having to have the sign-off from every European nation.”
Research by Professor Jonathan Portes into the effects on UK productivity related to changes in immigration levels, reveals that “there is some evidence of a positive association between non-EU origin migrants and productivity, and the reverse for EU-origin migrants.” The analysis suggests that an ‘extra’ 1% of the workforce from outside the EU is associated with an approximately 1.5% increase in productivity, while results for EU-origin migrants are less clear. However, Professor Portes says, “the estimates never approach statistical significance, and are quite small.”
The BBC report that Manx fishermen who have started to catch herring around the Isle of Man, for the first time in 25 years. The first boat has started landing the fish following a post-Brexit deal between the UK and the Manx government. Following Brexit, the UK gained a bigger portion of Irish herring quotas, part of which was then shared with the Isle of Man. An initial 100-tonne limit for 2023 is set to be increased in the coming years so more boats can take part.
The UK has formally signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) but the trade deal, according to the government's static economic modelling, will increase the UK's GDP by just £1.8 billion (0.08%) “in the long run.” Nikkei Asia, says analysts see little economic impact from the deal with the main obvious beneficiary being Malaysia, which stands to gain tariff-free acces to the UK for its palm oil.
Wine. Scrapping retained European Union laws will “put a rocket under” the UK’s domestic wine industry and potentially boost vineyards by £180 million, according to the environment secretary. Therese Coffey said the changes being introduced through the legislation would give vineyards the “freedom they need to thrive”. The changes include using more disease-resistant varieties of grape and eliminating the need for foil caps and mushroom stoppers on certain sparkling wines.
Speeding fines. UK drivers caught on speed cameras in the EU could escape fines after Brexit when the Cross-Border Enforcement (CBE) Directive, which allowed the UK and the EU to share driving license information (it worked both ways) was revoked. However, the DfT say the 1959 Council of Europe Convention on Mutual Legal Assistance in Criminal Matters (MLA), which permits the exchange of information and evidence on criminal and administrative matters, will continue to apply to the UK, so you may not be off the hook.
Northern Ireland. A report commissioned by Stormont’s Department for the Economy has suggested that the impact of the NI protocol will see the output of the NI economy rise by 2.2% compared to no Brexit. This is due to the province’s manufacturers maintaining preferential access to both the EU and UK markets and also because the sea border means local producers will face less competition from Great Britain, raising prices for consumers.
Reshoring. Data from BNP Paribas BNP for the first half of 202 2 has revealed a surge in demand for industrial floorspace and increased activity from manufacturing occupiers as they seek to ‘reshore’ activity back to Britain following theimpacts of Brexit. Vanessa Hale, Head of Research and Insights at BNP Paribas Real Estate comments: “Reshoring is bringing ‘Made in Britain’ back to our products. There are a number of driving factors behind this including inflation, Brexit, the pandemic, the Ukraine war and the blockage of the Suez canal, which have massively impacted supply chains and overheads.
Duty free goods. Before Brexit, travellers coming to the UK from non-EU countries were limited to personal duty free allowances as set by the EU. This was 4 litres of still wine, 16 litres of beer and either 1 litre of spirits over 22 % vol. or 2 litres of fortified or sparkling wine. Now the UK government has increased these allowances for all countries to 18 litres of wine, 42 litres of beer and 4 litres of spirits or liqueurs over 22 percent in alcohol. Duty free allowances for tobacco products remain broadly in line with the old EU higher quantities.
Import VAT. Travellers purchasing goods (not alcohol or tobacco) from duty free zones within the EU (in ports and airports) no longer need to pay country of origin sales taxes and will face no import VAT when arriving in the UK as long as they keep within the £390 limits (£270 if arriving by private plane or boat). This potentially saves buyers up to £78 per trip.
Asylum claims. According to the BBC’s lewis Goodall, successful asylum decisions are at their highest rate for many years attributed partly to Brexit. The UK is no longer part of The Dublin Agreement meaning we can no longer refuse a refugee’s application on basis they’ve already crossed into an EU country. Dr Peter Walsh, Senior Researcher at the Migration Observatory at Oxford: “The government has recognised three quarters of asylum applications as valid over the last year. This is a significant shift compared to a few years ago, when the majority of asylum applications were initially refused (even if many of these were later overturned on appeal). We now see majorities of positive decisions across a range of groups, from young men to older women….”
Cheaper fish: The House of Lords European Affairs Committee says a deal with Norway, Iceland and Liechtenstein signed in July, will mean cheaper fish in shops and supermarkets. Tariffs on the import into the UK of shrimps and prawns are removed, delivering savings of between £1m and £2.7m annually and Norway has agreed to cut certain tariffs for imports of UK fish feed from 10.5% to zero, thereby achieving annual savings of some £4.1m.
Pint glasses. Ministers are expected to announce plans to reintroduce the crown stamp on pint glasses in pubs in the coming weeks. New proposals will repeal “onerous” rules and allow hospitality venues to voluntarily place the crown on pint glasses, according to The Daily Express
Animal welfare: Live animal exports for slaughter are to be banned and journey times in England and Wales shortened with stricter rules on temperature and headroom in lorries introduced, a joint statement from Defra and the Welsh government has confirmed. It follows a 12-week consultation, attracting more than 11,000 responses – of which over 7,400 came from the RSPCA.
Wine. UK shoppers will save 20 pence per bottle on Australian wine under the terms of Britain’s new free trade deal with Canberra, according to the Government. The deal will see tariffs on Australian wine imports ‘slashed’ by up to 20p per bottle. It is hoped the move will see more varieties of wine imported, giving shoppers greater choice.
EU popular support. Polling shows that support for EU membership is above 80 per cent in most member states following Brexit. The Kantar survey asked how people would vote in an in-out referendum and found that Luxembourg (94 per cent), Portugal (92 per cent), Ireland (91 per cent), and the Netherlands (91 per cent) had the highest support for EU membership out of the 27 countries in the bloc.
EU Recovery fund. The EU have agreed an €800bn recovery fund involving joint borrowing and shared debt, something many believe no British prime minister would have been able to agree without strong domestic political headwinds.