Brexit: the news lottery

19/02/2019

The legacy media is totally addicted to personality-based news, so much so that the value of a news story now seems to depend on whether it can be associated with a celebrity or other well-known person.

Thus, while I broached a Formula 1 story on 22 March 2017, and again on the 26th, after Booker had carried it in his column, the story about the impact of Brexit on the industry has remained largely dormant until now. In fact, of the very few comments on the Booker column, a proportion accused him of scaremongering.

But what has now catapulted the story into the legacy media has been a complaint by a sports personality conveyed by the BBC - none other than Mercedes Formula 1 boss Toto Wolff. He has just made the headlines with the claim that a no-deal Brexit would be "a nightmare scenario" for British-based teams.

This is no more (and in fact rather less) than what I was writing on this blog nearly two years ago, with some considerable detail about the industry and how it might be affected. But such issue-based reporting is of absolutely no interest to our star-studded media until – in this case – a personality in the industry raises it, whence it immediately becomes news, two years after the story was first reported.

No longer is it confined to the speciality press, but it shoots straight into the Guardian, where Wolff is given headline treatment as he describes a no-deal Brexit a the "mother of all messes" for F1 teams.

The fact that any half-awake journalist could have written this at any time over the last two years is neither here nor there. A journalist reporting on issues these days is simply not news. It does not become news until the name of some grand personality can be attached to it.

Thus, the only time the issue has been aired previously is when Jonathan Neale, the chief operating officer at McLaren, warned the result of a no-deal Brexit could "put the ability of teams to stage Formula One meetings at risk". Then, as now, it went straight in the Guardian, then to disappear as there was no further celebrity input to sustain it.

As a result of this dynamic, even the reporting on such vital issues as Brexit becomes something of a lottery, dependent not on the intrinsic merits or importance of the content, but on whether the right person has said anything about it. Without that, the issue can remain invisible – which has been precisely the case with Formula 1.

Here is an industry which is almost entirely dependent on the freedom of movement – of goods and workers – that came with the EU's Single Market. Although championship car racing long precedes our membership of the EU/EEC, the way that the industry has developed, and the pace of race meetings, is entirely dependent on our current status within the EU.

Speaking back in November, Neale recounted how an F1 car had about 14,000 parts and the carry-over between the last race of the year and the first of next year was less than ten percent. Many of those materials were sourced from a number of small-to-medium enterprises in the UK and across Europe, he said.

Developing this thesis, Neale went on to say that some complex sub-assemblies will cross many borders before they arrive here. "If every time a border is crossed there is a transaction", he said, "it introduces a huge amount of inertia and inefficiency to our supply chain. It will be the same for everybody but as a business it is something we would be keen to avoid".

But, from that relatively low-key exposition, we now get the industry waking up to the real consequences of a no-deal Brexit, but it wasn't until last December that we saw serious reporting in the specialist press, with the headline: "Why Formula 1 teams are worried about the impact of Brexit".

Then, Mr Wolff was reported as saying that Mercedes had already "taken steps" to make sure that goods imported from the EU were "not stuck on the border", but Neale pointed out that F1 effectively operates "on a knife-edge" in terms of meeting deadlines when transporting freight for races.

He gave the example of McLaren almost being caught short for last year's Abu Dhabi season finale because of a customs clearance issue over hydraulic parts going into the United Arab Emirates. Three or four pallets were held up in customs for three days and left McLaren "24 hours away" from being stopped from taking part in a vital practice.

Effectively, with the introduction of border checks on F1 movements between here and the continent, it would be extremely difficult to maintain the current race schedule.

Despite that, Wolff still doesn't do detail. The actual legacy media reports are very thin. You would have to go back to my report in March 2017 to get any real sense of the way the industry will be impacted. Then, the legacy media doesn't need detail. As long as it has a "name" to cover its back, that will suffice.

What none of these reports has picked up though is the effect of Brexit on the hospitality operation run by F1. This is an integral part of the industry and does much to maintain the prestige of the sport, also providing the forum where much of the business is done.

Where British cooking was once the joke of Europe, the UK has developed considerable expertise in the highly technical and complex area of event catering. This in itself has become a multi-million pound industry, with its own highly specialised vehicles which travel to each of the meetings from their UK bases, carrying pre-prepared gourmet meals for crews and guests, prepared in high-tech kitchens.

With free cross-border movement currently guaranteed, post Brexit, these vehicles will have to be diverted to border inspection posts for veterinary inspections (yes – pre-cooked meals have to be inspected by vets), before they can travel to the race circuits.

All of this is not just of academic interest. We are dealing with a £9 billion industry which brings thousands of high-value jobs to the UK, with multiple spin-offs which even find applications in fields as diverse as the NHS.

For MPs to be properly informed of the consequences of their actions, in voting down the Withdrawal Agreement and exposing us to the risk of a no-deal Brexit, they needed to know exactly the details which we are beginning to get now but which, even a year ago, were only available on this blog.

It is not good enough, therefore, that the debate has been informed only by a news lottery dependent almost entirely on the intervention by high-prestige personalities and celebrities. Not least, industries which lack high-profile celebrity sponsors, tend to remain invisible.

Who, therefore, is there to speak up for the passenger lift industry or for the vital but totally unglamorous business of manufacturing equipment for use in explosive atmospheres? And when it comes to complex areas such as the Emission Trading System as it applies to airlines, these remain invisible to the legacy media, even after their impact has been felt.

And waiting in the wings is an even bigger issue, a king-sized elephant in the room which has the potential to cause massive disruption in the event of a no-deal Brexit. Mentioned briefly in a Commission Press Release yesterday, this is the VAT system, which will undergo fundamental change.

In a no-deal scenario, the release says, goods coming from or going to the UK will be treated as imports from and exports to a "third country". This means that customs formalities and controls will apply at import and export. Customs duties, VAT and excise duties will be levied at importation, while exports to the UK will be exempt from VAT.

And in those brief words hides a whole world of pain. Although there have been some concessions on VAT, where UK VAT registered businesses importing goods to the UK will be able to defer payment, postponed accounting will not be introduced for parcel consignments valued up to and including £135, which do not contain excise goods and are customs-declared for release to free circulation.

These goods imported from the EU will become immediately subject to VAT before they can be released, adding to the bureaucracy, damaging business cash flows and seriously inconveniencing online purchasers. But, without a figure of the prestige of Toto Wolff to complain, the issue is completely invisible.

The media is quite ready to jump the gun on the official announcement from Honda about its plant closure, before the reasons for company's decision have been formally released. But when it comes to reporting actual news on Brexit, the real news, the personality lottery decides what we get to be told.