It's OUT! The first #Brexit Briefing of 2021...which explores how unrealistic some industry expectations are about 'fixes' to the current deal, now the penny is dropping about what it means for supply chains and UK position vis-a-vis EU

So take the example this week, where the @Foodanddrinkfed raised the issue that UK-hubs for food and drink were "unworkable" since goods that came in from the EU were attracting full tariffs when the were spun back into Ireland or other EU members /2

https://t.co/PY0ernQ73u
@Foodanddrinkfed They were backed by other EU associations - and both said they would lobby UK govt and @EU_Commission to 'fix' what they presumed was an "unintended consequence" of the deal....except that both EU officials and UK govt have basically shrugged. The deal is the deal. /3
@Foodanddrinkfed @EU_Commission This is in no way confined to food industry - clothes and retailers are also hard-hit.

But lots of industry has wrongly bet that 'common sense' and 'self interest' would prevail once the nasty negotiations phase was out the way...but that's not the signal being sent. /4
As one EU official puts it: “You can’t expect the UK to remain the food import hub for the EU. It’s not sustainable, and makes no sense in the mid-to-longer run." And that applies to financial services, clothing, retail goods....a bureaucratic curtain has descended. /4
So what does that mean?

Well on the 'micro' front it means that businesses will start to split their supply lines between the EU and the UK...shrinking their UK footprint as a result. Take @AstonChemicals which supplies chems to cosmetics industry.... /5
@AstonChemicals As @DanilLoughran tells me, they shipped their last UK-EU load on Dec 18....now all the EU product will go into Poland. As a result her UK warehousing staff headcount has shrunk by one third. /6
@AstonChemicals @DanilLoughran Why? Because importing all the chemicals into the UK for distribution to EU makes no sense - they need dual registration, risk tariffs because of rules of origin + all the border delays and paperwork. So she hubs from Poland. /7

https://t.co/KwtJIWTNoa
@AstonChemicals @DanilLoughran It's a similar issue for Premium Plus UK, but as a dental devices importer, their issue is medical services directive that means EU importers must be responsible for goods them import (a legacy of bursting breast implants)...but makes it non-viable to hub from UK too. /8
@AstonChemicals @DanilLoughran For others like @reneewatson77 of Curiosity Box science kits, it's more wait and see if it makes sense to pay for dual certification - EU 'CE' mark and the UK's UKCA mark - which will cost her £20,000 her small business doesn't have. /9
@AstonChemicals @DanilLoughran @reneewatson77 Others like Kiran Tawadey of @hampsteadtea will get through by shift processes - more warehousing in German, but that means bigger loads and £65k-£75k to her base costs. How long she keeps basing of out the UK she isn't sure /10

https://t.co/4DIjZB00bX
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea All this will make life very interesting (to put it mildly) for those at the sharp end like Paul Jackson's @ChilternDist which has invested £1m in recent years in temperature-controlled distribution...and now waits to see how the border shakes down in practice. /11
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist Which is to say that #Brexit impact is not really about 'delays at the border'...it's the permanent, structural disadvantage of UK businesses vis-a-vis EU counterparts. i.e Those 'non-tariff barriers' that @BorisJohnson said did not exist (in a universe of alternative facts)/12
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist @BorisJohnson And the idea that UK business can 'just do more exporting to the rest of the world' overlooks the basic fact that they could do that as an EU member - but didn't, for a variety of existing reason. viz someone else doing it cheaper usually. /13
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist @BorisJohnson Brexiters love to defy economic gravity (particularly when it comes to services) but the economic reality is that competing with advanced economies on your door step is what keeps you productive - it provides economic muscle tone, because you have to compete /14
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist @BorisJohnson As @JohnSpringford explains to me beautifully, it is about specialisation and exchange: “The UK provides advertising to big business in Germany and big business provides the UK with cars" and it that process that we’re weakening by #Brexit /15
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist @BorisJohnson @JohnSpringford The net result is that UK workers shift into lower paid, less productive jobs over time and the UK will end up poorer relative to its EU peer-economies. That may even happen without anyone noticing - we don't live the counterfactual. /16
@AstonChemicals @DanilLoughran @reneewatson77 @hampsteadtea @ChilternDist @BorisJohnson @JohnSpringford It may even be that the politicians who rode to power on the back of a bus emblazoned with alternative facts will continue to prosper politically, but you can't escape that they have signed essentially a reverse-cooperation agreement with the EU. Truly unique thing to do. 17/ENDS

More from Peter Foster

More from Brexit

On this, I think it’s highly unlikely to occur in the timeframe given. For several reasons, I don’t think it’s realistic for Scotland to secede, and then join the EU, in 9 years.

For that, thanks goes to Brexit.

A thread because why not...


Two important dates: March 2016 and January 1st 2021.

Firstly, prior to the 2014 referendum, the Nationalists proposed a date of March 2016 to secede.

Secondly, today - the end completion of Brexit five-and-a-half years after Cameron’s majority in 2015.

Brexit has demonstrated many things, primarily that splitting unions is not easy. The UKs membership of the EU was 47 years and by the end it was not at the heart of the EU. The Union has existed for over 300 as a unitary state.

Dividing a unitary state, like the UK, will not be easy. Frankly, it will make Brexit look simple. Questions of debt, currency, defence, and more will need to be resolved ... something not addressed with Brexit.

Starting with debt. Scotland will end up with its proportionate share of the UKs national debt. It’s not credible to suggest otherwise. Negotiating what is proportionate won’t be easy when both sides disagree.

It’s importance will be seen shortly.
1. #Belfast #IrishSeaBorder There is no doubt that Brexit & the accompanying Irish Sea Border has destabilised the Union. Whilst the constitutional status of Northern Ireland has not changed, the fact of N.I remaining in the single market of the EU confirms it is”a place apart”.

2. Belfast Steve Aitkin/UUP, Mervyn Gibson/OrangeOrder,Jim Allister/TUV, Jamie Bryson/Unionist Blogger, etc etc, all see the Irish Sea Border & different economic arrangements for NI apart from Britain as a “betrayal”. It comes in a long line of Tory”betrayals”.

3. #Belfast They are correct. The Irish Sea Border & EU single market moves N.Ireland closer to the Republic of Ireland in terms of economic
https://t.co/tdKZhjKhWu,it doesn’t change the constitutional status of NI but it is a huge psychological blow to a Unionism.

4. #Belfast The DUP utterly failed to “strengthen the Union”. Their attempt to hold the minority Tory Theresa May govt to ransom backfired spectacularly when Boris Johnson won a significant majority. Their arrogance led them to be isolated & resented in Westminster.

5. #Belfast How does Unionism now react to this?Retreat to the”Bunker”?Repeat the ineffective “Flag”street activism of the past? The Union can now only be saved imo by reaching out to the 5-10% swing vote that will decide a future Border Poll on Irish unification,& it is coming.

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