Brexit: Ian McConnell: A year on, we’re all reaping what the Brexiters sowed

TOMORROW it will be one year since a grinning Boris Johnson signed the deal delivering the hard Brexit so craved by his administration and his acolytes.

Following the December 30, 2020 signing of this agreement with the European Union and the UK being ripped out of the single market at 11pm the next day with the loss of hugely beneficial free movement of people and frictionless trade, we have all had to reap what this Conservative Government sowed.

The UK finds itself in the grip of a skills and labour shortage crisis, with the ruling Tories having clamped down on immigration from our EU neighbours. This move has exacerbated greatly the woe already visited upon the UK in the form of a plunge in net immigration from the EU in the years following the ill-judged 2016 Leave vote, as people across the bloc reacted to the grisly developing situation in Brexit Britain.

The scale of the labour crisis is evident in the ideologically hidebound Tories having been forced to introduce emergency visas for heavy goods vehicle drivers, poultry sector workers, and pork butchers. Of course, these visas have not been particularly attractive to many EU citizens, given their short-term nature. And in any case the labour and skills shortages, while evident in all of the aforementioned sectors, are far, far broader. For example, Scottish Engineering chief executive Paul Sheerin has repeatedly highlighted the impact on his sector. Business leaders in hospitality and food manufacturing have also flagged major effects. The UK Government has now implemented temporary visa measures for care sector workers, attempting to point the finger at the pandemic and ignore the Brexit impact in this context.

Mr Sheerin said in late November: “Brexit still lingers like a bad smell, a gift that not only keeps giving but never seems to go away either.”

He added: “In the crucial skills area, one-quarter of members have been impacted by the loss of EU nationals, and over 70 per cent honestly outline that they are not fully prepared for the scheduled implementation of Brexit-enforced import checks due to start from January 1, 2022.”

It is indeed with trepidation that those who have understood the Brexit shambles for what it is so far wait for the introduction of import checks, which were delayed from this year amid a lack of readiness on the part of the UK Government. Thank goodness they were delayed, given the degree of the shambles we are already having to deal with on so many other fronts because of Brexit.

As the UK faces up to major demographic challenges in the years ahead, with an ageing population, the drag on growth from the sorry decline in net immigration will become ever more apparent, although it is obviously plain to see already. Scotland, of course, faces particular demographic challenges and it remains galling that it was dragged out of the EU even though its population voted very convincingly to Remain. Of course, Scotland is not alone in this situation, with a big majority of people in London, for example, also seeing the benefits of staying in the EU in spite of the British nationalist bluster of the Brexiters’ campaign.

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UK exporters have faced huge troubles getting their goods to market, with the seafood sector’s high-profile woes just one example. And the Federation of Small Businesses has flagged survey findings showing many smaller firms have either given up on exporting to the EU or are considering doing so because of Brexit.

The major Brexit drags on the economy have come at the worst possible of times. Of course, there would never have been a good time for such a foolish crusade as Brexit.

All of the noise from Tory Brexiters over recent years about big, brave new trade deals that were somehow going to make Britain great again has turned out to be exactly what it looked like from the outset – hollow nonsense.

There have been a slew of rollover free trade deals with various countries, offering the UK what it had as part of the EU in any case. People could be forgiven for thinking these were shiny new things, given the amount of noise made about them. However, big volume is a trait of this Johnson administration. And it usually means there is actually nothing to shout about. On the Brexit front, it often seems the big noise is in large part just about putting on a show for the Brexit faithful.

The Johnson administration has unveiled new free trade deals, with Australia and New Zealand. It has done so even more noisily than for the rollover agreements.

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However, the benefits of these new deals are minuscule compared with what has been lost with Brexit, as shown by the UK Government’s own estimates. In the case of the New Zealand deal, any net benefit is, on the basis of these estimates, pretty much imperceptible.

The House of Commons Library information and research service published a paper last week on the UK-Australia free trade agreement by Dominic Webb, which noted: “The Government’s estimates suggest that the overall effect of the agreement on the UK economy is likely to be very small, with a projected increase of between 0.01 and 0.02% of GDP. This is partly because Australia accounts for only 1.7% of UK exports and 0.7% of imports and because tariffs on most UK-Australia trade are already low.”

A document published by the Johnson administration last year entitled “UK-New Zealand Free Trade Agreement/ The UK’s Strategic Approach”, declared: “A trade agreement with New Zealand is estimated to have limited effects on headline gross domestic product…in the long run, with the estimated impact on GDP being 0.00% under both scenarios.” So that’s zero, to two decimal places.

In stark contrast, the effect of Brexit on UK GDP is huge.

Figures published by the Theresa May government in November 2018 showed Brexit would, with an average free trade deal with the EU, result in UK GDP in 15 years’ time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero net inflow of workers from European Economic Area countries. The Conservatives have of course clamped down on immigration, a move which is costing the economy dear and will continue to do so over the decades ahead unless the ill-judged action is reversed.

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You would imagine that eventually even moderate Leavers will realise what the Johnson administration has delivered, in terms of the damage to the economy and living standards as well as society, with its hard Brexit. Who knows though? In the meantime, sadly, the Johnson administration does not seem to care about the grimly negative effects of its hard Brexit, meaning we should continue to expect it to do nothing of any significance to even try to mitigate them. Unfortunately, it is households and businesses the length and breadth of the UK which are, regardless of their views on Brexit, having to reap what Johnson and co. sowed in terms of bearing the costs of the folly now and in the future, not the ideologically driven Johnson Cabinet.

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