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Yorkshire Bylines

The Davis Downside Dossier

“...there will be no downside to Brexit at all, and considerable upsides”

David Davis

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Upsides 5 : 62 Downsides


In October 2016, David Davis, the then Brexit secretary, told the House of Commons that “there will be no downside to Brexit at all, and considerable upsides”.

On this page we list the ‘considerable upsides’ and also the downsides, as we embark on Brexit after the end of the transition period – with the best possible access that we’ve been able to negotiate with the EU.

At the moment there are plenty of downsides, though the upsides are more elusive. We recognise the upsides may not become apparent just yet, but as they do we will add them to balance things up.

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This article and lists are reproduced with the kind permission of Yorkshire Bylines.

If you know of any specific upsides or downsides, please email editor@yorkshirebylines.co.uk with a link to a confirming story from a reputable source.

The ‘considerable’ upsides

5.

Tax havens: Now the UK no longer has a veto, the European parliament is pushing for British overseas territories and crown dependencies, including the British Virgin Islands, Guernsey and Jersey, to be added to an EU tax havens blacklist after the conclusion of the Brexit deal.

4.

Share trading. The UK will bring trading in Swiss shares back to London in the coming weeks, marking the first significant split from EU policy on financial services since the end of the Brexit transition period.

3.

Gibraltar: To avoid a hard border, Gibraltar will join the EU’s Schengen zone and follow other EU rules, while remaining a British Overseas Territory. The deal was announced by Spanish Foreign Minister Arancha González Laya, just hours before the UK exits the EU.

2.

Fishing: Britain’s fishermen will increase their allowable catch from British waters over the next five years, although the precise amount is disputed and some in the industry claim the new trade deal represents a betrayal.

1.

Advanced warning on goods: From July this year (2021), the UK will start receiving advance data on all goods coming from the EU into Great Britain, something which has not previously been possible under EU rules.

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The downsides

62.

Fishing: Lough Neagh eel fishermen will have to find new markets for a fifth of their catch due to Brexit and the operation of the Northern Ireland Protocol. It means finding new buyers for 50 tonnes of eels, worth £500,000, just months before the start of this year's season.

61.

VAT. An engineering company, is now being charged VAT at 22 per cent on imported goods manufactured by its Italian sister company, which are then sold to another EU country, because it is a UK entity, adding 22 per cent to their costs. MD David Lee. said in a competitive market this is "an absolute killer.”

60.

Yachtsmen. Almost 900,000 UK boaters are due to be hit by restrictions on how long they can stay in Europe after the Brexit transition period ended on 31 December 2020, a new survey by the Royal Yachting Association (RYA) has found.

59.

Credit cards: Mastercard will increase fees more than fivefold when a British shopper uses a debit or credit card to buy from an EU-based company, sparking alarm among companies that rely on online payments and concern among MPs over higher consumer prices.

58.

Fishing. Boris Johnson has unveiled a £23 million fund to compensate the fishing industry for losses caused by Brexit red tape as Scottish seafood hauliers descended on Downing Street to protest.

57.

On-line retailers: UK retailers could abandon goods that EU customers want to return, with some even thinking of burning them because it is cheaper than bringing them home. They say the new EU trade deal has put costly duties on returns at a time when firms are already struggling.

56.

Exporters. British based exporters are being advised by the Department of Trade to to register new entities inside the EU single market, from where they can distribute their goods far more freely while avoiding the extra charges, paperwork and taxes resulting from Brexit.

55.

Wine. UK drinkers face paying up to £1.50 extra a bottle on many European wines while choosing from a reduced range, merchants have warned, as the burden of post-Brexit paperwork takes effect.

54.

Dover: Residents feel “betrayed” and “trapped” by the “lies” of the government over Brexit after being told of a huge new lorry park capable of holding up to 1,200 trucks is to be built in a rural idyll which they say will destroy the quality of their lives and wreck the environment

53.

Business travellers: Businessmen who intend to carry out paid work in the EU will now need to comply with a host of complex national rules including an 'economic needs test' in some cases. The new arrangements have been described as "fiendishly complicated" by Catherine Barnard, professor of EU and labour law at the University of Cambridge.

52.

Exports 1: At least 50 major UK retailers, including Marks and Spencer and Tesco, are in the process of going through their products lines, to establish how many of them will now be subject to tariffs from the EU. River Island and H&M have both confirmed to ITV News they expect to pay penalty tariffs on some clothing sent between their UK and EU businesses.

51.

Packaging 1: All wood packaging materials including pallets must now be heat-treated and marked according to the ISPM15 international standard. Any business that does not comply could face shipments being rejected and, in some cases, fines.

50.

Freight costs: The cost of moving freight from France to the UK surged to more than four times the usual level, after Brexit and a virulent new strain of the coronavirus complicated supply chains.

49.

British expats:  Britons living in the EU face financial headaches as European banks hike international payment fees and British banks close their accounts.

48.

Hauliers: EU hauliers and transport companies are turning their backs on UK business because they are being asked to provide tens of thousands of pounds in guarantees to cover VAT or potential tariffs on arrival in Britain.

47.

Artists: British performers will be unable to work in EU countries without a permit. Actors, musicians and comedians fear the new trade will severely curtail the ability of performers to tour in Europe, and will hamper the recovery of the arts after the devastating impact of the pandemic

46.

Horse Racing: Relative to arrangements prior to 31 December 2020, the process of moving horses between the UK and the EU is considerably more complex administratively and time consuming according to the British Horse Racing Authority.

45.

VAT. New rules mean goods shipped to EU countries are now liable for VAT when they enter the single market. Tax experts VAT IT estimate the levies could add £34bn ($47m) to the cost of UK trade with the EU

44.

Galileo: Britain has lost access to the encrypted public regulated service of the Galileo global navigation satellite system and will no longer be able to play any part in the future development of it 

43.

Ferries: Stena Lines has redeployed a new ferry, the Stena Embla away from its intended Birkenhead to Belfast route to meet extra demand for direct shipments from Rosslare to mainland Europe as traders change supply chains to avoid additional paperwork in Britain. 

42.

Aviation: UK airlines can no longer offer services between EU member states (for example, London-Frankfurt-Warsaw) or domestic services within them (e.g. Paris-Marseille) and have lost the right to operate onward passenger services from EU member states to destinations in non-member states (e.g. London-Amsterdam-Bangkok).

41.

The Falklands: The Islands are excluded from the UK-EU trade deal. Products coming from the islands to the EU could now face tariffs. It’s a major concern for the economy of the islands, which exports 90% of its fish to Europe

40.

Price rises 1: Ford has raised the UK list prices of some of its models, blaming post-Brexit 'rules of origin' tariffs according to Autocar magazine. The Fiesta ST Edition went up by £1,695 between Dec and Jan, with Puma ST getting £1,920 more expensive.

39.

Spanish tax increases: UK-based owners of Spanish properties will see a 24 percent tax rate on income when the transition period ended. This compares with a 19 percent tax rate previously and is due to Britain becoming a third country. Spanish tax authorities will also no longer allow any expenses to be deducted which means gross income is taxable.

38.

Mobile phone roaming: The UK's trade deal with the EU does not rule out additional costs for UK customers using their mobile phones in EU countries. The biggest UK operators have said they do not plan to reintroduce roaming charges, but the BBC say it may not be that simple in the coming years.

37.

Lorry Parks: Government build 2000 truck capacity lorry park on compulsorily purchased land just off Junction 10A of the M20 in Kent against the wishes of local residents in the village of Sevington.

36.

Tech start ups: For the very first time, the European Union will become a direct shareholder in startups. This will be possible via the creation of one of the biggest investment funds in Europe. Brexit Britain will not be eligible.

35.

Freedom of movement ends: British people have lost the automatic right to live and work across 26 nations of the EU (excluding Ireland).

34.

VAT: EU exporters to the UK are expected to collect the tax at source, and pay to register for the scheme. Most won’t, unless we form the bulk of their market, so ‘we do not ship to UK’ will become more common. This could provide a small boost for UK operators, if they can fill the gap, but it limits consumer choice. (Also see Trade 1 above).

33.

Trade 1: Over 150 UK and EU firms have dramatically changed plans due to Brexit, including many who refuse to supply goods to the UK after 1 January this year. The list was compiled by Edwin Hayward, author of ‘Slaying Brexit Unicorns’

32.

Sky streaming services: We are no longer entitled to stream Sky TV outside the UK using Sky Go, Sky Kids, Sky Sports, Sky Sports Mobile TV and Sky Sports Box Office apps. Some Sky apps allow you to download your favourite shows and movies over WiFi before you leave home to watch offline while you’re abroad. This also applies to other streaming services (see Netflix above).

31.

Share trading: The three biggest venues in London that handle European shares saw almost all of this business (about $5 billion) shift into the EU on the first trading day since Brexit. CEO of Aquis Exchange Plc told Bloomberg that 99.6% of its European stock trading moved to Paris, described as “a spectacular own goal” for Britain post-Brexit.

30.

Seed potatoes: The EU has banned the import of seed potatoes, in a move which will be a “disastrous Brexit outcome for Scottish farmers”, First Minister Nicola Sturgeon claims.

29.

Second home owners: UK citizens with second homes in the EU are now only allowed to spend 90 days there, in any 180 day period.

28.

Safety and Security declaration: around 250 million safety and security declarations now need to be made by UK hauliers, adding extra costs to 50 percent of our exports.

27.

Rules of Origin: To avoid tariffs, British exporters to the EU will need to comply with complex rules of origin to provide evidence of sufficient local content to qualify for tariff exemption.

26.

Road hauliers: UK operators are now able to conduct one cabotage trip in the EU, while EU trucks will have the possibility to do two cabotage trips in the UK after a loaded inbound movement, according to the Road Haulage Association.

25.

Professional qualifications: There is no mutual recognition of professional qualifications which means professionals with UK qualifications no longer have the automatic right to practice or work across the EU27

24.

Pets: to visit the EU, dogs now need to be microchipped and vaccinated against rabies, with a health certificate issued by a vet 10 days before the visit. They must go though a designated TPE (travellers point of entry).

23.

Passport queues: Britons are no longer allowed to use fast lanes at European airports and Eurostar terminals.

22.

Northern Ireland (Irish Sea) customs border: collectively, traders now need to file 11 million new customs declarations for goods moving from Great Britain to Northern Ireland.

21.

Netflix: Because the UK is no longer part of the Digital Single Market, cross-border portability of online content ceased to apply from 1 January. UK users travelling to the EU will be unable to access the UK streaming library.

20.

Mutual Recognition: There is no mutual recognition of conformity assessments. British authorities are unable to certify goods made in the UK meet EU standards adding costs to domestic manufacturers and suppliers.

19.

Medical insurance: UK holidaymakers travelling in the EU now need medical insurance cover. Failure to take out the necessary insurance could result in hospital bills of £2,000 for food poisoning or £14,000 for a heart attack.

18.

Meat exports: Government guidance on Brexit, updated on 28 December, states that UK producers of “chilled meat preparations”, are “prohibited” from exporting their goods to Europe as of 1 January. This includes chilled raw sausages, chilled mince, ungraded eggs, and some unpasteurised milk.

17.

Manufacturing: After 1 January 2022, manufacturers will need to meet two different standards and will have to label products UKCA for the home market, and CE for those exported to the EU, adding costs to certification, manufacturing and stocking.

16.

Football: UK football clubs can no longer sign under-18s and are restricted to only three overseas signings under the age of 21, and only six foreign players per season.

15.

Food 3: A raft of red tape plus new checks at the border could add £3 billion in costs for food importers, according to the U.K.’s Food and Drink Federation. That’s about an 8% increase — some of which could work its way down to prices paid at checkouts.

14.

Food 2: There is no equivalence agreement on sanitary and phytosanitary (SPS) measures to reduce or eliminate checks on agricultural goods, like the EU offered to New Zealand and Japan.

13.

Food 1: the EU-UK food chain will be “slower, more complex and more expensive for months if not years” according to Shane Brennan, chief executive of the Cold Chain Federation.

12.

Fishing 2: The Yorkshire Post has learned Whitby fishing ‘crews will be worse off in 2021 than before they left the EU.’ DEFRA Secretary George Eustice, Michael Gove and Boris Johnson were accused of ‘betraying’ fisherman worse then before because they “knew exactly what they were doing when they devastated coastal communities.”

11.

Fishing 1: the shellfish industry now faces a bureaucratic mountain, with a wave of form-filling, certification and tariffs to deal with. Traders who sell live crabs and lobsters into the EU now expect delays caused by bottlenecks and new rules.

10.

Exporting meat products: exporters of food products of animal origin to the EU are now required to pay for an export health certificate for each consignment costing around £200. This also applies to ‘exports’ to Northern Ireland

9.

EU family members of British citizens no longer have the automatic right to join them to live in the UK and now have to comply with entry criteria including income requirements.

8.

Erasmus: the British government has decided not to participate in the student exchange scheme know as Erasmus, for financial reasons. It will create its own cheaper alternative.

7.

Customs declarations: an additional 250 million customs declarations will now be required annually, needing an estimated 50,000 form fillers at a cost of about £7bn.

6.

Crime: UK has lost its access the Schengen Information system, an EU database containing details of criminal suspects. British police accessed the database 603 million times in 2018.

5.

Consumer safety: UK loses access to EU RAPEX rapid alert system (also known as Safety Gate)a notification system used by Trading Standards to share information about unsafe products found on the marketplace meaning more dangerous goods and toys could now enter the UK internal market.

4.

Chemicals industry: is now required to operate a separate registration system for the near 5,000 substances made by UK companies, details of which are currently held in the EU REACH database, at an ‘immediate cost’ of about £1bn.

3.

Business travellers: now face fines of up to €20,000 if they fail to obtain special permits for visits to conferences or exhibitions in the EU after Brexit, as there is no Brexit deal for the service industry.

2.

Architects: As a result of Brexit, architects from the UK will have to demonstrate compliance on a state-by-state basis before calling themselves and operating as architects. See also Professional Qualifications below.

1.

Amazon: Amazon will no longer transfer UK sellers’ goods to the EU in a move set to have major implications for merchants both sides of the border. Amazon has informed its UK sellers that “pan-European FBA (Fulfilled by Amazon) inventory transfers will stop between the UK and EU” on January 1 2021.

Remember if you know of any specific upsides or downsides, please email editor@yorkshirebylines.co.uk with a link to a confirming story from a reputable source.

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Yorkshire Bylines https://yorkshirebylines.co.uk/the-davis-downside-dossier/