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Losing ControlThe Cost of Brexit Starts to Rear Its Ugly Head
The practical impact on businesses and individuals of the UK’s departure from the EU exposes the Leave campaign’s big Brexit lie, says Mike Buckley
The post-Brexit relationship between the UK and EU is less than a month old, but problems faced by businesses since 1 January are beginning to expose the consequences of both Brexit itself and Boris Johnson’s red lines in the negotiations.
The Government hopes to ride out disruption caused by changes to trading rules. In its eyes, the disruption and harm is a price worth paying to gain the right to diverge from EU rules. It will be hoping that the media will tire of stories of border chaos and companies newly unable to export to the EU and Northern Ireland.
But, while daily stories of hold-ups and queues may fade, what will be increasingly exposed is the central lie at the heart of the 2016 Leave campaign.
Johnson sold Brexit as ‘taking back control’ when the end result is the loss of control by British individuals, companies and industry – which are now finding that, within the EU, they had control over imports and exports. Membership of the Customs Union and Single Market enabled them to find suppliers and clients across the continent and guarantee that they would be able to receive and deliver goods on time.
All of that is gone. Given the lack of preparedness, the Government’s 30-year-old computer system and the lack of qualified border experts, companies face extended and unpredictable delays. Hauliers face delays of up to a week when they try to leave the UK. This is the new normal.
Individuals too are finding that control they once had is lost. Workers used to selling services into the Single Market now find a complicated system of rules that differ from state to state. The Single Market only exists from the inside; from the outside there are 27 sets of rules and 27 chances to get it wrong, breaking local laws in the process.
Young people – used to picking up jobs in bars and hostels across Europe – will be badly affected, given the requirement in most nations for a university degree and five years experience, putting the minimum age of a work visa at around 26.
Musicians, orchestras and theatre companies are some of the first groups to have hit the headlines due to their need to get multiple permits and visas to tour, whereas before they could play in Berlin and Lisbon as easily as Leeds and Glasgow.
“Music a microcosm for what ‘taking back control’ means and where control now is,” observed BBC Newsnight’s Lewis Goodall. “It’s been removed from individual musicians and businesses (no longer free to operate across EU) and been returned to the UK nation state/EU which now control who comes, does what and when.”
As travel picks up, lawyers, financial services and anyone else selling services will face the same costs and legal barriers. Like the once-exporting businesses, who are now giving up in the face of new controls and costs, many service professionals will decide it is just too complicated, expensive and time-consuming. They too will find once loyal clients looking elsewhere.
Even Government departments are admitting defeat. Exporting businesses are being told by advisors at the Department for International Trade to circumvent border issues and VAT problems by registering new firms within the EU Single Market, from where they can distribute goods more freely. The net result will be staff laid-off at home and replaced in the EU.
The result for the UK economy will be worse still.
Brexit will have a far greater impact on UK trade than on EU businesses because the UK relies more heavily on the EU for imports and exports than vice versa. Half of the UK’s imports come from the EU and half of its exports go there – yet only 4% of EU exports come to Britain, and 6% of the EU’s imports are from the UK. The disparity means that Brexit harms the UK far more than the EU. The same is true for services, where before Brexit, the UK sold far more to the EU than the EU did to the UK.
We are slowly discovering that we had all the control we needed to run our lives and businesses, but Johnson and his Government have taken it from us.
This has been underscored by the news that the EU offered musicians and journalists the right to work for 90 days, visa-free, in the EU post-Brexit – only to have the offer spurned by the Government. Unwilling to compromise, Priti Patel’s new immigration system to allow EU musicians to come to the UK meant that UK musicians would lose the right to go there. Control imposed by UK negotiators, not taken back for individuals.
These are the early days of Brexit. Much of the public will be glad that it is not dominating news bulletins. The long parliamentary battles of the last Parliament brought MPs and Remainers no glory.
But, over time, the reality that the country has lost control of its trade, and thus the health of the economy, will become clear. And businesses and individuals will realise that their loss of control to buy, sell and travel across the EU has costs that they may be unwilling to bear.