The initial impact faced by some sectors of UK business is less drastic for now, but will be felt harder in the future, according to an expert in economic transition. Bart Los, Professor of Economics at the University of Groningen, believes that the new regime will likely divide businesses into two camps – those that can find exporting to the continent profitable enough to continue doing it and those that will halt altogether.
A month since the UK was split off from the rest of the European Union with a new trading regime, evidence has emerged of the difficulties that have largely beset businesses based on the British Isles. Tales of long queues at the port in Dover, rotting shipments of seafood and logistics companies giving up on transporting goods across the Channel have painted a worrying picture. France’s decision to ban travel from the UK at the start of the month in the face of a new British variant of the coronavirus had further complicated the situation.
However difficult the situation is, there is indication that Britain might have smoothed over some of the initial shock that came with departing the EU.
Los suggests a very sudden cliff-edge for businesses might have been delayed “because firms on both sides of the Channel wanted to have sufficient stocks on the other side, to survive short-term problems,” but that some sectors not covered under the hastily packaged Brexit deal agreed in December, such as financial services, “will be hit hard soon.”
Asked which sectors have benefited from Brexit early on, Los says “maybe the transportation services sector,” but cautions even that might not last very long.
Being ready to navigate the complicated new system is key and Los tells of a consensus among trade experts that the information campaign to prepare businesses was executed better in the EU than in the UK.
“The UK government did not have any incentive to show the problems to UK business before, because it would risk the erosion of public support for Brexit,” Los says, revealing the project’s ideological insecurity.
British fisheries, another hard hit sector, is already reeling from the unmanageable bureaucratic circuit for exporting that has resulted in collapsing prices and spoiled stocks, leading to the Scottish Fishermen’s Federation’s (SSF) chief executive describing the situation as “the worst of both worlds.”
The Scottish Seafood Association (SSA) chief executive Jimmy Buchan told the Scottish Affairs Committee yesterday that EU exports were slowly improving, but still “far from perfect.”