On 23 June 2016, Geoffrey Betts, the CEO of a small office supplies business in Marlow, Buckinghamshire, had high hopes for his company and the British economy, when he voted in favor of Brexit.
“I thought we’d be like …” Here we are, here we are. We will become the most competitive country in Europe and we will be promoting business ”. Now I think, ‘What have we done?’ ”
His firm, Stewart Superior, has survived, but not without major restructuring and major efforts to circumvent the obstacles Brexit has put in the way of the business’s export.
At the end of 2020, Betts decided that there was no choice but to establish a deposit within the EU’s single market, in the Netherlands, at a considerable cost, to avoid costly traffic delays, mountains of paperwork related to the Brexit at the border and VAT problems when sending goods to customers on the continent.
The change means that, 18 months later, it has retained a decent share of trade with customers within the EU. But as their assets are now distributed from the Dutch deposit, the tax revenue that would have gone to the UK Treasury now goes to the Dutch government. Jobs have been created in the Netherlands, not here. Goods that have been transported from the UK, and that have created jobs and employment here, are shipped directly from the Netherlands to EU destinations, including Ireland.
Last year, with Covid adding to his problems, Stewart Superior lost money for the first time in 20 years.
Betts is “very disappointed” with the UK government. “We’re not sending anything like how much we were. As a country, we’re supposed to be there negotiating with the world, and yet nothing has happened except we have a lot more paperwork and we’ve lost much of our business. He ‘s completely crazy. “
Asked if, in retrospect, he would vote for Loss if there was a referendum today, Betts says, “I think based on what happened, I’d say no.”
Stewart Superior is one of several small businesses the Observer has been following since Boris Johnson finally agreed to a tough Brexit and signed a free trade agreement that went into effect in January 2021.
Others denounce the same frustrations. The markets for their products are there, they say, with many potential customers in the EU. But new barriers to trade, and hidden costs for customers (especially VAT demands on delivery to their doors), as well as rising import costs caused in part by the devaluation of the pound sterling after Brexit, they make it in many cases just not worth accessing.
Unless, say, companies open a branch within the same single market that left the UK 18 months ago.
Gyr King, CEO of King & McGaw, a company with a turnover of more than £ 10 million, which sells art prints online from Newhaven on the south coast, says it has almost stopped exporting to the EU because the costs related to Brexit and the bureaucracy make it uneconomical.
In some cases, he has sent works of art to EU destinations just to get them back because customers have refused to pay VAT on arrival. For legal reasons, the same products have had to be shipped on another slow and expensive return trip to the UK, i.e. a large bill on King’s desk for an unsold custom item.
According to King, Johnson’s tough Brexit challenges a basic rule of the economy. “If you can’t ship your goods to the biggest market on your doorstep, you have to shoot yourself in the foot,” he says.
Leaving the EU has also made it much more difficult to hire the skilled workers it needs, because the UK no longer enjoys the benefits of free movement of labor. “Clearly Brexit has not helped because the reservoir we are pulling out of is much smaller,” he says.
Six years after the referendum that pulled the UK out of the EU, Brexit’s economic arguments are becoming increasingly difficult to make for its supporters, including within the Conservative party.
Most of the trade agreements with non-EU countries that the UK has signed have been reduced in terms of their economic effect, and have simply been “transferred” from the identical ones when we were EU members. Even Brexit Minister Jacob Rees-Mogg has stopped talking about Brexit and the UK economy and instead is focusing on what he says is the democratic dividend, the recovery of the UK. control and the return of sovereignty. It is not surprising because every day economic data accumulates that show the harm that the exit from the EU is causing to the country’s finances.
Johnson and the Vote Leave campaign promised in 2016 that £ 350 million a month would come back from Brussels because we would stop contributing to EU coffers.
The impression was that there would be no downside. We would thrive outside of the European bureaucracy that strangled our businesses with bureaucracy. The huge benefits of the single market – trade freely across borders, with common standards – were never highlighted by Vote Leave, and rarely by the field of Remain, crudely alarmist.
Demand for workers in the hospitality sector has increased markedly. Photography: Rob Pinney / Getty Images
Only now, with the worst of the pandemic (probably) behind us, and the ministers unable to blame Covid, is the reality of Brexit being exposed.
Next year, the OECD estimates that the UK will record the lowest growth in the G20, with the exception of Russia, whose economy is exhausted by its war against Ukraine.
The Office of Budgetary Responsibility says Brexit will have a long-term effect of reducing the UK’s GDP by 4%, an estimate unchanged since early 2020. The Financial Times says this decline means a loss of production. of 100 billion pounds and 40 billion pounds less. annual Treasury revenue. The UK is now behind all other G7 nations in the pace of its pandemic recovery, with a significant decline in UK small business exports to the EU.
Jonathan Haskel, a member of the Bank of England’s nine-member monetary policy committee, said on Friday that Brexit was “disconnecting the UK from its main trading partners” in a clear example of deglobalisation. An
an expert at Imperial College on ways to improve productivity, Haskel warned in 2019 that British business investment would likely be weak for several years due to uncertainty linked to Brexit.
Figures from the Center for European Reform show that the Brexit vote has already depressed economic growth. The independent think tank said by the end of last year the economy was 5%, or £ 31 billion, smaller than if the UK had stayed in the EU. In the face of all this, the arch-Brexiters are increasingly turning against Johnson. They do not admit that Brexit was a mistake, but they say it has not yet been made to work.
Richard Tice, leader of Reform UK, successor to the Brexit party, told the Observer that the grand ideal was still good. “Brexit has given us back our sovereignty, so that we can make our own laws, control our money and borders and not be subject to the EU Court of Justice.”
It was just that the rich fruits of Brexit were not yet there to savor them because “in its utter incompetence, the Conservative government has not been able to take much advantage so far, with some exceptions such as being able to make our own previous vaccine launch and some trade agreements ”.
The Conservatives ’defeats in Thursday’s Tiverton and Honiton and Wakefield by-elections suggest that behind the“ red wall ”and the“ blue wall ”the electoral benefits of saying Johnson“ did Brexit ”are not what they used to be.
At the Southwest headquarters, many farmers believed that promises about Brexit had been betrayed. There was a sense of rural revolt. Fertilizer and feed prices have skyrocketed recently and payment systems for farmers are embroiled in confusion.
A constituency steeped in Euroscepticism in the West Country voted in favor of a deeply pro-EU party, the Liberal Democrats, sending a tremor through the Conservative party. Other sectors harbor feelings of Brexit betrayal as memories of Covid’s confinements fade.
The fishing industry – promising a new life outside the EU – is on the brink of crisis, with rising fuel costs making it almost uneconomical to catch fish, especially because exporting to the EU is now very heavy. The trawling crew working with a portion of the profits now earn less than £ 3 per hour after paying for the diesel, even though the fish has record prices.
Sarah Ready of the New Under Ten Fishermen’s Association, whose vessels are less than 10 meters long, said bureaucracy has been on the rise since the Brexit vote and they now face additional hurdles to sell. their catches.
Brexit was not to be like that. “Certainly some of the requirements have come from Brexit,” he said. “I think Brexit was a very nasty divorce between us and Europe and obviously they won’t make it easy for us in any way.” Health and hygiene procedures, EU import rules and other control requirements had grown dramatically.
Rees-Mogg said last week that he had no intention of controlling the economic effects of Brexit. “I will not do such assessments because lots were done before the referendum and they are all sentinels,” he said.
Brexit Minister Jacob Rees-Mogg says he has no intention of controlling the economic effects of Brexit. Photography: Kirsty O’Connor / PA
Ministers cannot hide reality much longer. What Rees-Mogg was referring to were predictions. We now have facts, evidence of Brexit that affects people’s lives. Those who want a holiday can see queues at airports, longer than before Brexit, and wonder: why?
Last week, easyJet CEO Johan Lundgren contradicted aviation minister Robert Courts’ claims that Brexit was “unlikely” to have caused a shortage of staff that would have disrupted airports. Lundgren responded that 8,000 job applications from EU citizens had been rejected by his company because candidates were not allowed to work in the UK.
“The group of people is smaller, they’re just math,” …