Richard North, 02/02/2021  
 


"If the state can compensate businesses hurt by lockdown, it can rescue the industries struggling outside of the customs union", proclaims Simon Jenkins from the ivory tower of his Guardian column.

Although in his piece, there is a quote from Tory MP Neil Parish, who told the BBC that the public had "voted to come out of the single market and customs union", it is nevertheless clear that Jenkins is focused almost exclusively on the customs union.

As well as asserting that the public "voted to come out of the EU and was never asked if it wanted also to leave the customs union", he maintains that it was told a lie – that leaving the customs union would be "frictionless". Other countries such as Norway, says Jenkins, "are outside the EU but enjoy free trade within the customs union".

At this stage of the game, it would be hard to believe that there was any serious commentator who could actually assert that Norway is in the customs union, or that any major national newspaper could fail to spare the blushes of one of its own, by allowing such an egregious error to go unchecked.

But while we were quick to lament at the relative ignorance of the "brilliant" Financial Times", in real life it seems that we are still having to deal with the prominente who don't even understand the basics.

It was very early on in the post-Brexit debate that we realised that this was the case, although it comes as something of a shock that there are still people in elevated positions who haven't mastered the difference between the customs union and the Single Market. And I very much doubt that Jenkins is on his own.

But it is this basic error which lies at the heart of much if the grief currently being experienced by a wide range of businesses owners. If they had been on the ball after Mrs May's Jumbo-jet crash speech on 17 January 2017, they would have realised that the writing was on the wall and we were due for a torrid time, once we had fully dropped of the European Union.

That is not to say that anything fundamental would have changed. But a proper understanding of the effects of leaving the Single Market – and an awareness of the certainty that nothing could be negotiated which could take its place – would have helped.

At the least, it would have allowed businesses to prepare for the inevitable, taking mitigation measures, such as setting up EU-based subsidiaries or restricting their businesses to cope with the inevitable loss of trade. Departure would still have been a systemic shock, but some of the worst consequences could have been avoided.

After all, it is not as if, in the broader scheme of things that this could not have been predicted. I wrote in November 2016 of experiences recorded before the advent of the Single Market where, customs formalities at the internal borders of the Community were taking an average of 80 minutes per lorry – and this was before the introduction of the complex SPS controls that are currently in place.

It was then, in 1984, that each hour's delay was estimated to cost between £2.50 and £3.25. The overall cost of customs controls was therefore in the region of £1.7 billion (at 1980 prices) – between 5-10 percent of the value of the goods transported across frontiers.

If anyone needed an update, only a month after my piece on pre-Single Market delays, I wrote a post on border delays then experienced at the EU's external border. In this, I particularly emphasised the problems with Turkey, which has a customs union with the EU.

At the Kapikule Border Gate, marking the transition between Turkey and Bulgaria, more than 1,000 trucks had been reported, waiting for days to cross through to access European markets. This was by no means an uncommon event, and one which was experienced elsewhere.

But already, the intellectual rot was there, with Duncan Buchanan, deputy policy director for the Road Haulage Association, telling The Times that "imposition of customs procedures could have a particularly serious impact on Britain's food supply chain". Nearly 30 percent of food consumed in the country arrived from the EU via lorry, he said.

The use of the generic "customs procedures" failed to acknowledge the distinction between customs formalities (partly if not mainly attributable to the lack of a customs union) and the "official controls applicable to food and animal movements, relieved only by participation in the Single Market, and entirely separate from customs formalities.

Currently, Jenkins points to "enraged farmers and despairing fishers", fuming as their food rots in lorries and warehouses, unable to export to Europe or even Northern Ireland "because of Brexit". But Brexit, per se, is not the issue. This rests with Mrs May's determination to leave the Single Market, executed by Johnson when he took over as prime minister.

Of all the groups that might have most awareness of the impending problems, one would have thought that those representing farming and food interests might have been most on the ball. But it was not to be.

For instance, in a letter dated 30 November 2016 to Theresa May, fronted by the four UK farming unions, and joined by "71 leading food businesses with a collective turnover of over £92 billion", the signatories talked of "a bold and ambitious vision" for the industry.

But, when it came to specifics, their key demand was "maintaining tariff-free access to the EU single market". This, they wrote, was "a vital priority". The sector needed, they said, "access to EU and non-EU seasonal and permanent labour", alongside assurances that EU workers already working permanently in the UK would be allowed to remain.

This access to labour is essential as it underpins the UK food chain's timely delivery of high quality affordable food to consumers, they added, thus urging the government to seek "both these goals as the whole of society and the economy will benefit".

Nowhere in that letter, nor subsequently, did we see any reference to the impact of "official controls", the primary non-tariff barriers that would kick in once we left the Single Market. The thrust of the letter, when it reached the BBC was reflected in the headline: "Brexit: Food chiefs warn on EU tariffs".

Then, once Article 50 had been triggered, the NFU even went so far as to post on its website an analysis of what the 2016 referendum result meant "for the future of British agriculture", calling in aid the board chairmen to explain the position.

For the livestock sector, they had Charles Sercombe who stressed that the key issue for the UK sheep sector was "being able to maintain our ability to export to the European single market".

Without tariff free access for our lamb, he said, we would simply lose this market which would have a dramatic impact on farm gate prices. Then, for beef, again it was "the impact of a tariff barrier between the UK and EU" that could significant impact on trade flows.

Not for one second did Sercombe indicate that he had any understanding that the tariff barriers were entirely separate from the Single Market and that, even with tariffs removed, his sector faced a far greater threat from the non-tariff barriers.

Right up to 2019 and beyond, NFU leader Minette Batters was prattling about the effects of a no-deal outcome. UK farmers, she said at the 2019 Oxford Farming Conference, would have third-party (sic) status and would face high tariffs to sell their goods into Europe. "We'd be priced out of the market", she said, claiming that the result for UK farmers would be "catastrophic".

The very obvious point to make here is that, if industry "chiefs" never raised the alarm about non-tariff barriers, the ignorati in the media could hardly be expected to work it out for themselves. And, since the politicians seem to rely for most of their information on the legacy media, they would also remain blissfully unaware of the dangers.

Yet now, after the almost complete failure of industry to make any attempt to head off the inevitable effects of leaving the Single Market, we have the likes of Simon Jenkins – still unaware of what is going on – calling for government to compensate individuals and firms for their losses.

One can, of course, have sympathy for the individual businesses involved in this mess, but I cannot help but think that they should be looking to their own trade leaders for an explanation as to why they have been so badly let down.

In a perverse reversal of Aesop's fable, when the wolf was at the door, the trade representatives cried "sheep". And now their members are paying the price.

Also published on Turbulent Times.






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