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Brexit is the Election Elephant in the Room – But Business Leaders Know the Truth

Brexit has barely been mentioned during the election campaign – but the impact on businesses and the economy is so much worse than the public might think

Nigel Farage campaigning for Brexit ahead of the referendum in June 2016. Photo: Dinendra Haria / Alamy
Nigel Farage campaigning for Brexit ahead of the EU Referendum in June 2016. Photo: Dinendra Haria/Alamy

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There is an elephant in the room in this general election campaign: the ‘B’ word.

Piers Morgan recently raised it on BBC’s Question Time, challenging Nigel Farage, otherwise it’s as if Brexit never occurred. Strikingly, it did not feature at all in the ITV leadership debate between Rishi Sunak and Keir Starmer on Tuesday evening.

And so it is as if the disaster that is the aftermath of Brexit is not taking place. As far as our politicians are concerned, the UK’s exit from the EU, and what has happened since, is off-limits.

Not so, among the business community.

I recently chaired a panel discussion for business networking organisation E2E to mark the body’s launch of its “International Track 100 for 2024” – the ranking of the 100 British private businesses that had enjoyed the highest export sales growth during the past three years. The panellists were drawn from the list. 

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These were bosses who were successful and who were selling well overseas. Yet, all of them were damning about the UK’s departure from the EU. 

Simon La Fosse, founder and chairman of technology recruiter La Fosse Associates, called for another referendum on EU membership. Others nodded their agreement. Among them was Ed Gillett, creator of CharterSync, which marries freight-forwarders with airlines handling air cargo.

“Pre-Brexit, we could move aircraft without delay. Now, with all the paperwork required, it takes 48 hours,” Mr Gillett said. “This has a major impact, for example, on ‘just in time’ supply chains – say they’re relying on automobile parts, the whole production is left waiting for them to arrive. Previously, we never saw competition from road freight, now there is, as it can be just as quick to send a part by road as by air.”

Before Brexit, another panel member added, all that was needed to cover the whole of the EU was one docket. Now, every member of the EU requires its own forms to be filled in before goods can be transported. 

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Jaitej Walia, director of crop protection supplier JT Argo, said: “It’s very tough, doing business between the UK and Europe. I wish Brexit had never happened.”

He was considering relocating his head office to Ireland, which is in the EU, to use it as a gateway to the bloc, saying: “They need to execute a better trade deal with the EU. Even if we don’t have a referendum, we should at least get a better deal with the EU.”

Mr La Fosse was concerned that “one of the unintended consequences of exiting the EU was that previously, 40% of the founders of tech companies came from the EU – they’d chosen to come to the UK. Now, we’ve made it more difficult for them to come and the UK has become less attractive. If you think about the value creation they brought, and the employment they created, their loss is massive.

“I fear we’re becoming less competitive as a country.”

People who run Britain’s businesses know what is happening – they experience it daily. But they are ignored.

Instead, our political leaders behave as if everything is fine, that the correct decision was made – or at least they prefer to keep their counsel, not wishing to reopen wounds. 

Die-hard Brexiters like to maintain that the UK made the right move. They point to the UK economy growing faster than others in the EU. But that would have occurred anyway, having more to do with countries’ individual economies than the EU. It is true that the UK led the EU in the race for a COVID vaccine, but others soon caught up. 

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Likewise, Brexiters cite the trade deals struck since the UK left the EU as proof of the country’s ability to forge its own way in the world. Most of these agreements, however, merely replace the ones lost due to Brexit. As for the two much-vaunted big ones – India and the US – they have not transpired. 

Brexit’s proponents also love to cite ‘taking back control’. By that they meant a nirvana of low taxes, lower subsidies, British-owned businesses flying the flag for Britain, free of the shackles imposed by the dreadful, leftie bureaucrats and technocrats of Brussels

Low taxes? Not a sniff.

Lower subsidies? Britain no longer features on the EU’s score card for state aid and the Government refuses to publish its own figures. Shearman & Sterling trawled through an official online database of awards to try to establish the true picture. It’s not exact, but what the law firm found was that the UK was outstripping the EU in throwing money at business.

In 2015, UK Government aid amounted to 0.35% of GDP, versus an EU-wide average of 0.67%. That rose to 2.71% in Britain, and 2.39% in the EU in 2020, as the pandemic sparked handouts for hard-hit firms. After that, it fell back to 1.19% of GDP in 2021 and 1.13% of GDP in 2022. 

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Those who thought Britain would be ‘less European’ after Brexit should think again. Under the UK’s post-Brexit system, industry regulators have no power over the Government – a cash award can only be recovered through the courts. In the EU, by contrast, the European Commission must examine and approve the largest subsidies before they are paid. 

As for the proud champions of commerce and entrepreneurship, since January 2020, when the UK formally quit the EU, analysis by the Office for National Statistics’ charts, shows that 2,917 British businesses worth more than £1 million have been bought by foreigners, for a total of £176.7 billion, including the iconic Royal Mail, sold to a Czech for £5.3 billion. 

The once world-beating City has had a torrid time. The London Stock Exchange has fallen out of the top 20 global IPO destinations for 2024, raising as much money as Kazakhstan’s stock market. It is behind smaller exchanges such as Istanbul, Oslo and Athens.

Hopes rest with Chinese retailer, Shein, which is considering the UK for its $50 billion float. If Shein does choose London over New York, it will be because the firm is fearful of a US backlash against some of its labour practices. Ironic, then, that it should select the UK on that ground. 

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This is against a backdrop of top-quoted companies leaving the London market. Without an influx of IPOs, they are not being replaced. 

Still, as a Conservative peer told LBC, there is a Brexit dividend. He claimed there were “many” benefits, but then, when asked to name them, the only one he could think of was the lifting of the cap on bankers’ bonuses. 

We took back control. Now what? On we go, having to pick up the pieces while our political class say nothing. It’s a shaming omertà that speaks volumes. 


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