Move to EU to avoid Brexit costs, firms told
theguardian.com
theguardian.com
One of the major goals of the EU is the reduction of this red tape, but the UK government spent a lot of time making a political argument about how everything would still be fine. Businesses obviously had to work with that advice. Now that the barriers are there and real, it's been a bit of a shock. This is particularly true for sectors like food products, which now require health and biosecurity checks (which are expensive!).
One of approaches to compensate for this to some extent is to ship products in bulk to distribution centres or similar facilities within the EU – this reduces the per-shipment overhead. But obviously this means you move staff and investment to the EU, and the UK loses out on employment and tax revenue.
The whole thing means it just becomes much less attractive to import from, and export to, the EU. That translates in the long term to a dark on the UK economy. Baffling as an economic decision, but politics seems to defy practicality in the UK these days.
(1) The lack of EU regulation would allow the UK to negotiate its own trade deals with non-EU countries, potentially making up the loss of trade with the EU
(2) The lack of red tape would also allow the UK to become find new efficiencies in the production of goods and services
The UK is a resourceful country so in the long run they will make up for some of the loss, but I doubt they will ever reach the same trade potential as if they had stayed in the EU. What's clear is that the short term looks dire for a lot of businesses.
The British - like the Germans - are good at doing. They're going to have a really hard time for the next decade but they'll pull themselves out of the slump.
The Dutch - they are more "managerial", the culture involves spending a huge amount of time talking and very little doing. Our PM is a great example - he's an identikit guy in a suit, who ticks all of the boxes. Even as far as keeping the parts of his life which do not confirm to standard quiet. No vision, manages like a soft MBA, mediocre. Looks a saint compared to Johnson or Trump. The previous guy was the same.
Just compare our vaccination efforts to those of the UK or Germany. Miles behind. We're probably still discussing the ethical ramifications and impact of the human rights of the tiny subgroup of people who will reject the vaccination for hipster*/religious reasons
* Management culture, so you have an army of dummies who study something easy at university so they can get a career in middle management, drinking coffee and reading/sharing pseudo science on Facebook.
The irony being that red tape has gone way up due to Brexit, not down, and this was obviously going to happen to anyone with even small amounts of experience with international trade.
Things have become so much more expensive and difficult that some businesses are shutting down due to non-viability, some EU businesses have decided they can no longer ship to the UK (not worth the hassle), and UK businesses have decided they can no longer ship to EU countries.
There was one company I saw recently that now ships products to every country in the world except the UK, because the UK is currently more difficult to deal with than random third countries.
It’s not easy to move staff. UK citizens need to secure a Visa to work in the EU. This is the kind of move that requires months of planning.
It was not a “given” the situation would end up like that. For instance if the UK was allowed to collect VAT on behalf of the EU you could imagine the experience of the average “shopper” to be somewhat better.
> Rachel Reeves, shadow chancellor of the Duchy of Lancaster and shadow minister for the Cabinet Office, said: “Once again we see this government’s sheer incompetence and lack of planning holding British businesses back and slowing our economic recovery. “They’ve got to get a grip on this now and stop leaving our businesses out in the cold.”
Brilliant, if only they'd thought of 'planning' and 'not leaving businesses out in the cold', thank god for that contribution.
Sir Keir Starmer (opposition leader) actually seems pretty good on this front, especially in re coronavirus which is what I've mostly seen him speak on. Not afraid to say (the situation's diabolical but) the government's doing the right thing etc. His predecessor Jeremy Corbyn was by far the worst offender I've seen.
That and it raises the their personal and party profile while highlighting the opposition doing poorly.
I'd argue that UK politics don't tend to be won on ideas but mainly on perception of competency.
>by advisers working for the Department for International Trade (DIT)
The DIT is not advising companies to move to the EU. I'm no expert but VAT has to be paid somewhere and now the process (especially given changes being introduced separately of brexit for e-commerce) is confusing and unexpected for small businesses. The way to deal with this is to set up a company (probably in Ireland) to make accounting easier and obviously avoid tax issues at the border.
That's only part of the problem for goods but seems to be what the article is mostly referring to.
And given that the EU market is bigger, that number might increase further as time goes on.
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
Some reasons would include China and Japan being highly protectionist and difficult markets to enter into successfully, the language barriers, but most importantly, distance.
I can give you an example, a lot of people I know that did ecommerce and sold on PAN EU Amazon used UK as a hub for imports - not anymore of course.
Maybe things will improve on customs processes because there might be a big volume of bureaucracy that wasn't there before, but it will always be a bottleneck. Such bottleneck makes sense because the EU must guarantee that the block businesses aren't being penalized by UK businesses.
I don't see a good way around the language issue -- every developed country requires most consumer products to be described in the official language(s). (I see French and Spanish on "Made in USA" things, presumably so they can be sold easily in Canada and Mexico.) Medium and large manufacturers put multiple languages on the label, either all of them (e.g. Ikea) or some of them (e.g. my toothpaste is labelled for sale in Britain, Ireland, Norway, Sweden, Finland and Denmark). Very small manufactures just stick a sticker over the default label, you see the same at the Chinese food shop and the Polish food shop -- that does increase costs.
The EU has a project to improve cross-border delivery, which I think is particularly motivated to improve the situation for individuals and small/medium businesses -- large businesses that move stuff by the lorryload aren't bothered by the borders. (e.g. "Amazon.de" has a distribution centre in Poland, and offers free delivery to Czechia, Denmark, Sweden etc if you spend €39, rather than the €29 for free delivery in Germany. Can an American business in California offer flat-rate delivery to the whole USA? I see e.g. UPS does, but I don't know if there are alternatives that undercut them for in-state or next-state delivery.)
What was happening was that collection was being done by the customs, and only a small fraction of the goods were being flagged for not having VAT, then they had to collect it, and then proceed to return it. This puts an extra layer of work on customs, and many goods are sold at a price that can't be matched by EU businesses because they have to collect VAT.
So EU now demands businesses that want to do business in the EU to do what every EU business does: collect VAT on sale and return it.
The end result is that the cost of doing business went so far out of scope he decided to simply stop any sales to UK, because UK wanted him to pay register for VAT and pay it. This is much more complicated than it sounds, not only because of the registration requirements.
Simply put, just figuring out how the frak do we note the UK VAT on the invoice started to sound more expensive than the sales lost by just ignoring UK. Because there's no space in VAT system to put VAT twice, or at least no clear guidance could be achieved. And yes, he would need to put in VAT twice - first the 0% export declaration to Polish tax office, then somehow add the UK vat for UK, then figure out how to declare it so that the UK VAT collected isn't taxed locally as income.
In my country if you ask the majority of accountants about some of these matters, they don't know how to reply to you, or don't do it because they're afraid of getting it wrong. If you call the Finances 3 times, you might get 3 different answers.
It's a mess.
And the guidance on HMRC page is so convoluted that it's hard to figure out if there's an exemption or not (hint: there's none, you're fucked, and welcome to trying to figure the declaration differences between sub-135 GBP and above it)
This will be the protocol for EU as well, but it was delayed to June 2021 if I'm not mistaken!
But I'm with you, information about such matters is so detached from the "regular" citizen it's weird how in 2021 things aren't straight forward. Like people give shit to Terms & Services of apps, social networks, etc, because they're are ridiculously lengthy and with legal/uncommon language, but a lot of government documentation and laws are written the same way.
A good text by Fish "How Brexit Has Destroyed UK Artists’ Ability To Tour In The EU" [0]
[0] https://www.facebook.com/derek.dick/posts/10157827728953587
My guess is that Brexit will be somewhat bad for Britain, but not majorly so and Britain will cope just fine.
The main way Britain could lose is from a geostrategical point of view and regular citizens don't really care about that (until it's too late). But who knows, maybe the "Special Relationship" will help.
Can't find that interview from a Norway official or EEA representatives that basically said "Hell no, we don't want you to screw up our relationship with the EU like you did. You are toxic.".
I wonder what polls are saying about how Europeans see the UK right now.
edit: found it https://www.youtube.com/watch?t=189&v=tsyudJFE8DA
edit2: just found again this interview https://www.youtube.com/watch?v=VtNr4z3YrYo in which Farage says the UK will be (I think he meant remain) a member of the EEA on Brexit day. It didn't since they were only member by virtue of being a member of the European Union.
UK is not part of EEA nor part of the Schengen area.
A key difference is that in Norway and Switzerland the "political elite" is pro-European and often wants closer ties up to joining, in UK however the brexit is the culmination of a decades long "RU/Europe/Brussels is evil" campaign and the British government gives little reason for the EU to believe in good reason for their negotiations.
I am aware of companies that have done actually this, splitting UK and EU sites into two separate business entities.
This is we are not in EU but we will keep our laws in line and pay to be part of EU economical zone.
Its pretty much as if they haven't left EU but now they have no say in anything.
Well that is happening (1.3 million last year) and it isn't a good thing.
The new blue colour sometimes being issued is completely unrelated to passports issued before the standard red EU ones (and is indeed closer to the currently-issued EU Croatian blue passports).
1. We could have had blue passports without Brexit.
2. Many of these unfavourable conditions on UK firms and UK citizens are imposed by the UK government itself.
It's not a simple case of the larger trading partner giving the smaller one unfavourable terms. In this case, the smaller partner chose to impose hardships on its own firms and people, while the larger partner was willing to offer more benefits so long as they were mutual.
For example, those UK musicians who can't tour the EU any more. That's a UK decision. The EU was willing to allow that touring as long as EU musicians could tour in the UK on similar terms. But the UK declined. That's why there are petitions about it, because if the UK changed position on that, the EU would probably accept.
But you have to recognise that UK government is generally harsher to smaller businesses and to people than EU institutions.
In general, EU directives and regulations are more oriented towards easier and fairer trading, and better support of human rights than UK government attitudes towards those things. It's not true of every little directive of course, but the general trend is that way.
For cross-border trading, the problem is that UK business and UK government aren't aligned at all.
So the UK government being in control means screwing a lot of UK business, and government appears to be fine with that, as long as they get re-elected. The current prime minister literally said "fuck business" when anticipated issues around Brexit were discussed some years ago. His position does not appear to have changed.
You can see this misalignment on LinkedIn posted from HM Government that advise on actions businesses "need to take" now. On each post you might see 99-100% of the comments expressing disappointment, annoyance and contempt at the government.
Considering the popular vote split on Brexit, it's striking how the comments on HMG LinkedIn posts are almost universally negative.
I think the government's real priority was made clear by the previous prime minister: Many speeches about Brexit negotiations to UK audiences started with words like "on XXX date, freedom of movement will end". It was strikingly consistent. Preventing people in the UK from freely moving to the EU, and vice versa, looks to me to have been the primary agenda item of those leading the Brexit movement throughout. That's what being "in control" is. Control of people. Some parts of the resulting trade agreement reflect this, for example the EU offering to allow touring musicians so long as it was mutual, and the UK declining, and the UK's decision to decline the EU offer to continue the Erasmus student exchange program.
However that's not what happened as it was never realistic or possible, and now the 46% of UK goods exports that go to EU27 are in a very tough spot, thousands of businesses and jobs at risk, direct and indirect. Not to say anything of services which are of course not included in tarrif free trade deal UK now has.
anyways purpose of Brexit was not "sovereignity" or whatever other lies were told, the purpose was to distract from decades of mismanagement by political elites in what is a fundamentally undemoratic system (Monarchy with hereditary head of state, vs presidential republic, upper house made of lords vs elected senators, lower house composed of Etonian elites, no constitution, centralisation of power at expense of Scotland, Wales, N. England, well basically everywhere outside the M25)
A shit tonne of brits haven't done much with their lives. They've just sat and grumbled that their job doesn't pay enough (while refusing to work harder or change employer or get a qualification).
At the same time, for the last 30 years anyone who worked hard, invested, got skills, started businesses etc has been rewarded.
The first group are really upset they're being left out. That's why you get all this talk about mysterious "elites".
The first group voted for brexit to fuck with people just trying to get on. They're actually very pleased that those companies are struggling and their workers are suffering. The first group would never have started a small business exporting to the EU. They'd have stayed in the pub moaning over stale lager.
This is result (and many more to come) is exactly what many brexiteers wanted and voted for: a fuck you for trying hard.
Nor did I say equality was equally distributed. It's not.
I just said a significant number of people CHOOSE (chose) not to take whatever opportunities they were presented with. Now they're upset because the world where you sit in 1 job for 50 year, get a pay rise every year, don't have to worry about anything, and get a nice house and to retire early is long dead.
Some of the most deprived places in the country voted to stay in (London) because they choose opportunity. Plenty of well off rural areas voted out because people their don't like others succeeding.
That's the great irony here. The people with the least opportunity and the ones at the worst part of the inequality problem mostly want opportunity. It's the ones further up the curve that are standing on the hose. Those who insist they're middle class but are really just workers who inherited a bit of cash or got a free council house.
For these people, the "elites" are people in the South East: people in Greater London who have benefited from enormous investment - the investment which should have been spread out more fairly.
Because these areas have seen a lack of investment, they are cheap to live in. They also see a lot of Polish/Romanian/Hungarian immigrants who are doing seasonal / tough work (because it's cheap).
So if you're going to get **d anyway, why not take some of those smug **s down with you?
* Even TheGuardian are a great example of this horrible LONDON focus.
Let me surprise you: I don't really disagree about the North getting a rough time. I'd argue about some definitions and whether that excuses crashing the rest of the country in revenge. But whatever.
Here is the thing though: why do you think that makes you special?
I am in Dagenham in East London. We were dock workers. Then the docks shut or went containerized and electric so there were no jobs and a lot of poverty.
Westminster, less than 50 miles away did nothing for us.
Ford came and opened a plant here because we were willing to work. They became the major employer.
Then they shut.
Central government again did nothing for us.
So we went up into London, got jobs in insurance. We had to start at the bottom. We had to spend a lot of money and time on overpriced trains. We had to retrain, office work is nothing like assembly lines.
Tell me I'm wrong.
When a load of that offshored, we jumped to finance.
Right now, they're building crossrail near me. The first investment we've had in a century.
I don't doubt the North has had it hard. But so had the South. I agree Westminster is a bunch of toffs with no interest in the lives of real people. But I'm as much of a real person as you.
The only difference here is we know no White Knight is coming to save us. Given the last 1000 years of history, I don't know why the North keeps thinking that the likes of Boris and Farage are "on their side". It's especially amazing to me that you call me and elite (first person in my family to go to uni, born and raised in one of Europe's most deprived areas, no inheritance coming for me) and not them?
Your comment on immigrants underlines my point: immigrants getting on and working hard is exactly the sort of thing people who don't want to get on and work hard find maddening.
Are you now ready to go to those fields and do that work? Or will you continue waiting for Westminster to save you?
I've been quite blunt with you here. Its not because I don't like you. It's not because I think I'll win something. Its because this is where we are. Whether I like it or not, we're in this together now. The North, like everyone else, will need to get on and go. If you don't think the North got the investment it needed before, it won't get it now, so there is no point waiting. Its go time.
This is the horrible truth that Farage and Bojo will never speak aloud. They'll keep lying and telling you it's the Europeans, the immigrants, the elite, the educated, the benefit claimants, and whoever else.
Now tell me I'm wrong.
I am from one of those countries that come and work in UK. The people that work in the fields for cheap, live in horrible conditions in UK, just to be able to send money to their families back home, their life is not in UK. That's not a role model for hardworking, these people are just desperate and would prefer to live a more normal, less hardworking life.
Actually making a go of modern capitalism (or whatever we call this) requires a lot of steps, over a long time.
I'm sure plenty of immigrants manage the "go where the work is" and "earn more" but then fail to manage the next step.
It's hard. But it's the only option anyone has and it does work. No one is going to wave a magic wand and make the North of England (or those immigrants) NOT have to work hard and take risks and "make it work". All brexit does it reduce the opportunities they could have used...
Thats sort of my whole wpoint here: not only is there is no alternative, refusing to engage is why people are in this position to begin with.
The UK has - quite literally - decayed in that time. It's really sad visiting, seeing high streets gutted. Infrastructure dilapidated. So few young people. So many people in terrible shape. All signs of the economic disparity that the statistics showed.
The right have their modus operandi, they're the same everywhere. The two-party system in the UK (and US) enables the very worst of their behaviour because they're able to concentrate power more easily and have paths to minority rule.
I almost suspect that the Farage class of politicians are designed (and funded) to fill the gap which which would otherwise be filled by socially progressive populists. Someone to the left of Corbyn (who is center-left despite the media lies) but with charisma.
Ironically, in some of the poorer areas there's been a fair amount of investment by the EU (via local development grants). You can see it: There are signs on various local features and buildings saying supported an EU grant, with an EU symbol.
That EU funding in poorer areas is now going away, to be replaced by what?
The UK gov't promised it would make up for the lost funding, but I honestly don't believe them, because it could have done so before and did not.
"For those who believe the market will fix it: Well paid drivers no longer exist. The last time he has seen a local work as truck driver was in mid-2000 and meanwhile salaries have dropped to ~€700 and less therefore only some Eastern Europeans can justify that working as a driver still makes sense for them. There is not much wiggle room left in terms of just paying better salaries - even smaller freight-forwarders are asking themselves whether it continues to go there (at least for now)."
Think about that. A job which used to pay enough for British people to live on had its pay driven down so much by EU rules that the only people who can afford to do it are Eastern Europeans living in countries with much lower cost of living. (More specifically, by the requirement that people living in those low-CoL states and with licenses issued by them be able to compete freely with local drivers for deliveries.) In this case, the Brexit-related change that's fucking with businesses is literally the removal of the direct, casual reason why some people are unemployed in Britain - and the response has been to insist that it didn't happen, that those people were just brainwashed into thinking the EU was the reason they didn't have work.
(The Eastern European countries with lower cost of living don't seem to be doing all that well in many ways either after joining the EU, which is probably partly why they continue to have such low cost of living in the first place.)
https://www.bbc.com/news/uk-politics-36616028
A nice fat majoring of people under 45 voted Remain.
Edit: and that was when the bore happened, so that's not basically everyone under 50...
A majority, sure. But that’s still 29% (or 27% with your source) of 18-24 year olds. That is certainly what I’d call "plenty"
This is neither fair nor accurate, and is the same kind of thinking that people attributed to Trump supporters in 2016. The reality is there are whole areas of the country that feel unsupported by their government.
Jobs they held have been offshored as a result of globalalisation and deepening income inequality ensures that they receive smaller and smaller shares of the pie, despite worker productivity vastly increasing.
If only we'd stayed in, we could have joined the euro and fixed that issue.
As it is, places will have to compete or we'll need a second currency?
The general problem with the UK is that it has the expectations of being treated according to its legacy. It expects the world to keep throwing away money on financial services in London, because?! As part of the EU, if they switched to Euro, that could have made a little sense.
I think the US also spent the last two decades going into that legacy rut where it expects it can sell high priced information while becoming increasingly disconnected from the actual places information is used. The US is quite lucky to have had some industrial restart thanks to greater automation.
I agree the uk and London are high cost. For the uk that won't change. For London, it's high cost and high wage. Maybe when the wages disappear the costs will fall. But I don't think that's what people want. At least not what they claim to want.
The wages in the UK are embarrassing, I think your reference must be within the UK and maybe part of Europe? There is simply limited capacity and a lot of old legacy things competing to occupy London. Plenty of east coast US cities are similar. Not enough going on, but insufficient housing stock. Rents take too much of the profits and are driven up by older businesses owning things they could not afford to rent at the market price on their income.
Yes, why not? Reasons like expertise on EU investments in English were already an eroding advantage. Many finance groups were already reducing the portion of their staff there and are now moving more of their staff to offices in the EU.
(The UK was in a tough spot because it wouldn't commit to the EU. The fix was to make a worse choice, the UK is too small and too dependent on eroding advantages to maintain what it had.)
I don’t think you can really compare with the American system where you elect a de-facto king every 4 years...
But a president just tried to use all of the power in the executive branch to overturn an election. And he didn’t even come close. That doesn’t seem very king like to me.
A couple of US websites even banned the previous president while he was president, and he couldn’t do anything about it.
Even ignoring the secret veto that the Queen and Prince Charles continue to use against proposed legislation[0], the effect of the Monarchy (and the uncodified constitution) is that the Prime Minister of the day can effectively act as a monarch without the checks and balances that would exist in a republic.
> as for the lords yes the process of becoming one is not great (it is no longer hereditary however)
The House of Lords is the biggest parliamentary chamber of any democracy in the world (currently at 792 members), which is not a sign of how much expertise exists in it, but rather how easy it is for the government of the day to expand it with their cronies, who may then hardly ever turn up, except to vote to force through whatever legislation has passed in the Commons.
Also, it is incorrect to say it is "no longer hereditary" since there are, by law, 92 members who hold hereditary peerages.[1] Admittedly, the specific selection of these peers is subject to a vote (some elected by the House as a whole, though most are elected by only their fellow hereditary peers), but it is still an affront to democracy to have dozens of seats in a legislature which citizens are ineligible for due to their ancestry.
> I don’t think you can really compare with the American system where you elect a de-facto king every 4 years
You absolutely can compare it with the American system, and it compares badly, since the UK's de-facto king is elected only every 5 years, and they are chosen not by the people, but by the MPs, who on average were voted for by 37% of eligible voters at the last election.
[0] https://www.theguardian.com/uk/2013/jan/14/secret-papers-roy...
[1] https://en.wikipedia.org/wiki/House_of_Lords#Hereditary_peer...
As we've seen in the past 4 years, these checks and balances in a republic like the US can be completely invalidated without the relevant laws in place. Things like senate majority leader having the final say on what gets debated, or how a criminal trial is conducted (e.g. during Trump's impeachment).
Neither our current system works properly, nor does the US system, and I'm willing to bet this two party system is the bigger issue rather than having a monarch whose power is mostly ceremonial.
I will say, I was unaware of the what was layed out in the guardian article. I'd be curious how much this had happened since 2013.
The much vaunted checks and balances may have come to one dude in Michigan upholding democracy:
> The monstrous pressure that descended upon Van Langevelde is not easy to convey. He was one of two Republicans on the four-person board of state canvassers. Trump needed them both to sabotage the certification, and one had already signed on. State and national party leaders were broadcasting lies about fraud. The president and a parade of prominent Republicans had sent the message that Van Langevelde must follow along. He ducked their calls. He went off the grid. Observers in Lansing expected him to resign.
> He did not. On the afternoon of November 23, Van Langevelde showed up, pen in hand, for a public hearing. All 83 county authorities reported valid election results. Van Langevelde leaned forward to toggle on his mike, pulling down his face mask to speak. “The board’s duty today is very clear,” he said calmly. “We have a duty to certify this election based on the returns.”
[…]
> If Trump had suborned just that one man, Van Langevelde, the Michigan certification would have failed and the Republican legislature would have had an excuse to meddle. Van Langevelde was not a prominent party member—his day job was deputy counsel to the state House Republican Caucus—but he was thought to be a reliable one. All he really had to do was abstain, and the board would have been unable to certify the results.
* https://www.theatlantic.com/politics/archive/2021/01/how-clo...
See also Georgia:
> “If Brian Kemp had agreed to be completely lawless, he could have called in the state legislature and they could have tried to appoint a different slate of electors,” Richard Hasen, an election-law expert at UC Irvine, told me. “He could have refused to sign the certificate of the electors. I’ve never thought of Kemp as a voting-rights hero … but he was a hero here, stood up to tremendous pressure given the hold that Trump has over the Republican Party right now.”
* Ibid
I won't claim that a Westminster system is better, but I'm not sure how the US is something to use as an example (there may be theoretical ways it is better, but the implementation seems to suck).
A good text by Fish "How Brexit Has Destroyed UK Artists’ Ability To Tour In The EU" [0]
[0] https://www.facebook.com/derek.dick/posts/10157827728953587
We don't have a codified constitution, but we still have one; it's just made up of various written laws and unwritten things like conventions.
I agree that the system isn't particularly democratic though: the executive (Government) can pretty much do what it wants when it has a majority in the Commons and the relevant promises in its manifesto (to bypass the Salisbury Convention in the Lords).
Monarchy tends also to be cheaper than presidential offices, in countries with president/prime minister (UK may be an exception).
edit: grammar
No, that's missing the point too. The purpose of Brexit was very much sovereignty for the political elites. The entire point of Brexit was that the policital elites were ceding too much power to Brussels and they explicitly campaigned to "take back control". The Monarchy doesn't enter into it, they'd ceded their political power to the elites centuries ago.