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Tangled up in red, white and blue tape July 28, 2022

Posted by WorldbyStorm in Uncategorized.
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It’s been long argued on this blog that once Brexit was passed the key approach was mitigation to a softer form of Brexit. But as the data comes in I’ve got to admit that I’m sometimes surprised at how bad in practical terms this project is turning out.

The issue at Dover this last week was striking. Here was Brexit made manifest, and as noted in comments, in large part due to the manner in which it was pursued by the British.

Then one reads this and it is apparent that on so many levels it is hugely crippling to economic activity.

A British wine wholesaler who last year criticised Brexit as the biggest threat to his business in 30 years has decided to leave the UK after post-Brexit paperwork made a £150,000 hole in revenue.

Daniel Lambert, who supplies Marks & Spencer, Waitrose and 300 independent retailers, is moving to Montpellier in France later this week with his wife and two teenage children.

There he will set up a French company to export back to his own company in Wales.

And:

Daniel Lambert Wines imports more than 2m bottles of wine a year. Business boomed during the pandemic, with revenues up by about £500,000 as locked down consumers substituted visits to the pub with home supplies.

But the end of the Brexit transition agreement in January ate into any profits, with red tape costing the company “between £100,000 and £150,000”, Lambert said.

Before Brexit, transporting wine across the Channel was relatively straightforward. After Brexit, it has turned into a nightmare with hauliers fleeing the sector because of the complexity of the additional paperwork. All goods imported must be accompanied by paperwork detailing a commodity code and other information such as origin and destination of the cargo.

Wine imports require specialist expertise. For a start, each type of wine has an individual commodity code depending on the variety of grape, the type of wine, the alcohol strength, the size of the container it is being imported in and whether it comes from a protected designation of origin.

This, as noted in the piece means that there’s a deterrent effect with next to no hauliers or logistics companies willing to transport alcohol and only doing so with very large charges. Who could blame them? And this isn’t just a matter of wines, but of a broad range of goods which are similarly controlled. Clearly not every company can or wants to set up in the EU in order to circumvent such charges. 

What does such a massive dislocation do to an economy or a society? And what of the preconceptions already baked in? In a world of Just In Time logistics and where people expect to cross borders smoothly where does this leave those who find the opposite is the case? There will, of course, be adaptation, but at a minimum it would appear to suggest that the next few years are going to profoundly difficult for Britain. And in a sense there’s a sort of control in this experiment in the shape of Northern Ireland which has a different status to Britain and is doing remarkably well economically. 

I’m not a fan of Simon Jenkins but in the same paper he makes an incontrovertible case:

While many of the present frictions might have been negotiated away under a softer Brexit – Brussels was initially prepared for this – Johnson’s orgy of anti-EU hostility simply ignored any downside. If Britain lost its EU labour supply, he suggested the hospitality, farming, health and care sectors should simply pay British workers more. He never planned for this. The implied cost to the public sector was never budgeted for, or its inflationary implications considered.

That is the problem in concise terms. Rather than accepting that different approaches would offer different challenges and act accordingly instead the British government fixed upon the most ideologically hard-edged version and, well, ignored all and any downsides. That worked because, ironically, the actual process of Brexit was delayed in the sense that it didn’t come fully into effect for some years and secondly the pandemic hit. But it couldn’t work indefinitely. And now it isn’t working. 

 

Comments»

1. Tomboktu - July 28, 2022

Restrictions on importing wine to Britain from France led to a niche market for some Irish businesses in the 17th century. A 27-minute episode from Eat This Podcast from 2016 is available here:

https://www.eatthispodcast.com/how-the-irish-created-the-great-wines-of-bordeaux-and-elsewhere/

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