On Friday the BBC and Sky announced that Jaguar Land Rover is set to cut 5,000 jobs from its 40,000-strong workforce in the UK. There was no doubt in the minds of the presenters (and no doubt the editors that feed the lines) about what was the apparent root cause of this decision, which is fear over Brexit.
Although noting, rightly, that JLR have been faced with a multitude of factors, the spin was clear. The lay-offs were to be part of a £2.5bn plan to cut down on costs. Although some production staff may be affected, it was later revealed, by Jaguar Land Rover themselves, that most of these cuts will target how the company manages itself. Cuts to jobs in management, sales and administration, in addition to 1,500 made globally last year.
Such job losses are occurring in the car industry globally. In other news at the end of last week, though buried far lower down the newsfeeds, were reports that Ford will be cutting thousands of jobs across the whole of Europe. Surely these cuts in Bordeaux and Saarland cannot also be blamed on Brexit as well? The Ford management made it clear that this was not the case – although it does make it clear that future decisions will look into the economic impact of Britain leaving the EU, which any sensible company would do as a matter of course.
So what has caused the hit on JLR if it isn’t Brexit? They have lost about 50% of their market in China, due in part to consumers’ caution over Trump’s trade war. That lack of sales alone has contributed to this crisis.
Then there is their focus on diesel engines: following the Volkswagen diesel emission scandals, and with increasing tax takes on diesel fuel and plans to clear the streets of diesel by 2030, the resale value of JLR products has dropped through the floor.
Furthermore, JLR products in the UK offer no small car option, only luxury items, only one electric car, and that’s priced at £64k. Whereas on the other hand, competitors offer small cars and a good range of electric vehicles for less than half that price, with the Nissan Leaf at £26,995. Nobody wants to buy a car at an exorbitant price knowing that its value will drop by half in the space of two to three years.
Plans made over the course of two decades, years before Brexit, have led to Jaguar Land Rover’s downturn.
Again, nothing to do with Brexit.
This all falls in line with a global downturn in the car industry, centred around massive changes in the dynamic of how the industry operates. The traditional car dealership is unfit for purpose and as we go increasingly online for car purchases, they will eventually die out.
The potential PCP (Personal Contract Purchase) crisis will be front and centre of the dynamic changes to come. As we know, the FCA is already investigating the current and most popular way of buying a car. This financial product, as most suspect, has been mis-sold due to the product being centred on future valuations of car prices. Due to the volatility, mainly on diesel cars, this will potentially leave customers with cars in massive negative equity.
This, in itself, will change the way people purchase their cars, as trust will be lost in this product, which is what car dealerships rely on. Contract hire, cash purchases or traditional HP loans will become the new norm once more. All this before we factor in the impact of driverless cars.
This, along with everything we’re seeing in the news with Jaguar Land Rover, and Ford, all adds up to the technological changes facing the car industry; and it has nothing to do with Brexit.
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A true economic miracle is happening. An extraordinary leap in the UK’s global export trade has occurred – a complete reverse of the ‘Doomsday’ predictions of the Treasury, Bank of England and Department for Business in London both before after the Brexit vote.
According to figures published by the UK Office of National Statistics in November – in the second calendar year following the EU referendum – exports to non-EU countries were £342 billion while exports to EU countries were £274 billion.
In the same period, the growth in exports continued to outstrip the growth in imports, almost halving the UK’s trade deficit from £23.4 billion to £15.8 billion. Most exceptionally, since the referendum, exports have increased by £111 billion to £610 billion.
Doubters will say it is a temporary blip caused by the falling pound. Not true. The boom is in new markets, and largely in new products and services, too. UK exports not just increased but doubled in hitherto obscure countries such as Oman and Macedonia. Exports to distant Kazakhstan climbed to $2 billion, only slightly less than the UK’s exports to Austria, worth $2.43 billion in 2017, which like many EU nations buys very little from the UK.
In the 12 months to September, the value of UK exports grew by some 4.4%, including strong growth in the manufacturing sector. Indeed, HMRC stated that exports of goods had shown “robust growth in every single region of the UK”. The number of Welsh SMEs which export doubled during the last two years to 52%.
Curiously, none of this has been spotted by any of the UK’s headline media – the BBC, Sky News or the FT. Not a peep from the new editor of the Daily Mail. Even The Economist was asleep on the job. Meanwhile, various government departments are spending much of their time issuing ‘Death in Brexit’ forecasts in a co-ordinated campaign with the Bank of England and other allies – and rarely champion our achievements.
Four years ago I was interviewed by Richard Cockett, The Economist’s UK business editor. I told him the UK was experiencing an unparalleled SME boom. How did I know, he asked? Since leaving the FT as a technology correspondent and columnist in 2003, my small team in central London has maintained a uniquely comprehensive database of more than 70,000 UK smaller companies.
As a result, daily we receive an avalanche of success stories. In the food and drink sector alone, if you want whisky marmalade or beetroot ketchup, or 500 new gin varieties or more than 1,000 new craft beers launched since 2011, our very brave, risk-adoring micro-SMEs will deliver.
If a New York cathedral needs a new, hand-made organ that £3 million contract comes to Britain. We sell sand to Saudi Arabia, china to China, and Turkish delight to Turkey. In the ultra-competitive auto components sector, UK exports are up 20%. Luxury goods, consumer goods, clever instrumentation for NASA and crucial cerebral input into US defence projects are all avidly listed in our dataset.
And yet, in our view the true importance of the export boom is as much political as economic. It proves that a No-Deal exit from the EU – or what I much prefer to call ‘Our Own Deal’ – is by far the best option, and far less damaging and disruptive than the ‘experts’ at the Bank of England, IoD, CBI, OECD and World Bank have forecast.
Far from being the ‘poverty and isolation’ scenario predicted by the chin tremblers who endlessly appear on Radio 4, the UK will be far much dependent on the EU in as little as five years.
Fears about UK-made cars from Japanese firms such as Nissan and Toyota being cut off from Europe are groundless. First, the UK could retaliate against BMW and VW – something no post-Merkel German politician would tolerate. Any anti-Japanese actions by the French would result in the rapid diminution of the £4 billion annual exports of French cosmetics to Japan. And the French know it, no matter what Macron might bluster.
But the export explosion is not the only piece of recent great news for the UK – there is more. First, in October 2018 Japan’s Prime Minister, Shinzo Abe, invited the UK to become part of the Pacific free trade pact – although this is dependent on the UK leaving the EU’s Customs Union. It would make the UK the sole geographically-distant member of the grouping, helping the country to rebuild trading links around the Pacific Ocean that stretch back more than two centuries.
Next, BP’s huge Claire Ridge oilfield, west of the Shetlands, just came on stream, providing no less than £42 billion in revenues over the next 25 years. It is a development much envied across energy-starved Europe – and there are more oilfields to come.
At this critical moment in the Brexit saga, it is vital the UK now wakes up to the much brighter future it has outside of the EU, and vital that Mrs May copies the bravery of our SME exporters. The so-called ‘No-Deal’, a term that needlessly frightens ordinary citizens, should indeed be re-named ‘Our Own Deal’, in which we invite all nations to trade with us on fair trade, low or no tariff, basis.
The UK economy will soon be in a solidly secure position to refuse any damaging ‘deal’ from the European Commission. Perhaps it was always the height of imbecility to think we could ever get a good deal from the Commission.
Finally, the tide of history is in our favour, even in Europe. The current, sub-optimal generation of European politicians – Cameron, Merkel, Juncker – will soon ‘be history’. Merkel goes next year – and every EU Commissioner will be replaced, too.
As Brexit talks limp from one embarrassment to the next, a No-Deal option will not be the doomsday Theresa May, the financial and property elites, and the heads of the UK’s top organisations and PLCs have long predicted. In fact the UK should never have negotiated with the Commission – from whom no fair deal was ever possible. The UK should introduce its own deal, ‘Our Deal Now’, in which we offer all nations fair trade agreements with no or low tariffs.
For hundreds of thousands of small UK companies, a complete split from the EU can’t come soon enough.
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So the EU and the 27 have rubber stamped the deal and as our Prime Minister embarks on her nationwide tour to try and convince the public to lobby their MPs to back it, what does it means for us as a medium-sized business?
With 130 employees, exports to more than 140 countries to date in nearly a century of trading and multi-million pound investment plans, our future – and that of our people and their families – hinges on this deal and the outcome in Parliament on Tuesday 11th December.
And we think it is a con. The deceit behind the establishment’s efforts is plain to see. Our nation will not have taken back control and, as many have already said, this deal will leave us in a worse situation than had we actually remained in the EU.
Neither of these options – agreeing to Mrs May’s deal or officially remaining in the EU – is viable.
Mrs May wants us to lobby our MPs, and we should. We should tell them to vote against this terrible deal and to push for a totally clean break – the time has come for a ‘no deal’ Brexit.
And here is why – staying in or agreeing to Mrs May’s deal would:
- Leave a business like ours under the control of EU regulation. Our business would be exactly as we were pre-referendum. We voted to Leave to be out of this trap. This deal damages our business, our staff and their families and many other UK companies.
- Leave us unable to sign trade deals with the rest of the growing world where the UK makes a surplus in our trade on goods. Not only will this be damaging to our business, it will damage all of us.
- Prevent us from being able to negotiate a future trading arrangement with the EU that is favourable to us. Already the French and Spanish are using the agreement to the Irish backstop to their advantage. This backstop is a threat to our United Kingdom and it allows others with different political agendas to use it as leverage against our country.
For the above we have the privilege of paying a £39 billion price.
Let us remember just what our membership of the EU has meant for us. Firstly, the payment of circa £10 billion (nett) a year in membership fees and the surrender of our sovereignty by allowing the European Court of Justice (ECJ) to reign supreme.
Membership has resulted in the demise of our manufacturing heartlands as multi-national companies exploit the system in their favour. Many jobs have been exported to other member states where labour is cheaper and regulations differ. Some businesses have even received EU backing to export British jobs overseas.
The never-ending burden of bad EU Directives and Regulations has held back business, and stifled competition and innovation. Meanwhile the free movement of people has helped to hold back productivity due to some employers taking advantage, making it less affordable and attractive for business to invest and boost output.
The uneven playing field that exists means that we are not able to trade fairly in the EU because of individual hurdles that are erected to keep us out and of course, the unfair competition that we face due to not everyone playing by the same rules.
Crucially, membership has led to the loss of our world-renowned British Standards (BS) and their replacement by Euro norms, despite them being probably the best in the world. REIDsteel has 150 structures in the Caribbean, all designed to British Standards. Every single one stood up to the category 5 hurricane that saw Chinese and American buildings blown away last year. The forced use of Euro norms increases costs by an average of 20%, making us less competitive in the real world.
So, unforgivably, Prime Minister May’s deal betrays what the people of this country voted for and locks us back into almost everything that the EU stands for; it is a capitulation.
Furthermore, if our politicians allow themselves to be bribed, coerced and pushed into agreeing the deal as it stands (even with the backstop removed) the insignificant gains of the arrangement will undoubtedly ebb away and we will be left like a sitting duck.
As Mrs May once said, no deal is better than a bad deal. The elite and the ultra-Remain camp promote catastrophe at the very thought of no deal, but this is absolute nonsense.
There will undoubtedly be some short-term disruption but it is worth remembering that Operation Stack at Dover has been in force more than 211 times without any reported catastrophes to the just-in-time delivery chain.
In any case, ‘no deal’ actually means a deal on World Trade Organisation (WTO) terms which is infinitely better than what the Prime Minister and her Government are trying to sell us.
Those who prophesy the end of days in a no-deal scenario either don’t know what they are talking about or are deliberately spreading fear and lies to frustrate Brexit or bring it about in name only.
Most of the rest of the world can and does trade on WTO terms and countries like China, Australia and America seem to manage just fine; it is complete nonsense to suggest we can’t do the same.
We can and we should have a clean Brexit. So let’s get on with it. Write to our MPs and tell them to start believing in our country by supporting the rejection of this terrible deal and backing a clean and proper break.
Only then can we ever have a good meaningful relationship with our partners in Europe and across the world.
A no-deal outcome will be just fine: we will go on to prosper outside the EU’s protectionist bloc that has never protected our country and its people.
Without this we will never take back control.
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I recently added my name to a long list of other business leaders calling on MPs to reject the EU Withdrawal Agreement.
But whereas those trying to keep us in the EU, or who support this deal, like to roll out big name brands from huge multinational companies, we speak as those who make up a larger part of the economy – Small- and Medium-sized Enterprises (SMEs).
According to the latest figures from the Department for Business, Energy and Industrial Strategy, 99.9% of all businesses in the UK are SMEs and account for over half of the private sector turnover in this country.
Small businesses, like the technology company I helped found, which employs over 15 people in the UK, are the life blood of our economy. Those entrepreneurs who have staked their own money and reputations on realising an idea – whether it’s the sole trader, the family-run business or the established regional player – are the ones politicians should be listening to when it comes to our future relationship with the EU, and with the world.
We are the ones with the confidence to try and to fail, to risk and to reward, to expand and to innovate.
We don’t have the same marketing muscle as big business. Our pockets aren’t so deep as to be able to continually lobby Brussels or government for favourable regulatory and tax regimes.
We trade fairly and squarely on our own terms, ready to use our agility and flexibility to deal with whatever change in the markets comes our way.
Big business likes to stifle competition and discourage new players from entering the market. Despite public protestations to the contrary, they encourage, embrace – and often have a hand in writing the regulations that become those barriers to entry for entrepreneurs looking to innovate and compete.
And this is why big business has no problem with this deal. It’s why it campaigned to remain in the EU in the first place.
A protectionist bloc with a tariff barrier wall around it – keeping global competition out and as many rules as possible in. Encouraging scale and consolidation, not innovation and productivity.
Free trade with the rest of the world, with our external tariffs reduced to zero, would see a level playing field with companies competing based on quality, cost and inventiveness. Prices would go down, as we would not be forced to buy from expensive EU producers.
The UK has a service-dominated economy. If we want the countries of the world to buy those services, we will be expected to buy their goods in return. But we won’t be able to if we are locked into the EU rule book on goods. This is why saying we could still forge our own trade deals under this agreement is so misleading. Which countries will want to trade with us on such terms?
SMEs like mine want to trade, we want to compete, we are eager for the challenges that await us. We don’t need a deal that locks us into a system where there are no exits. We don’t need subsidies and handouts.
The Government’s EU Withdrawal Agreement lacks practicality and realism – two things that, as a business leader, you can’t do without.
We’re told that we must essentially remain in the customs union and the goods regime of the single market because of the Northern Irish border. Yet as someone who has spent their life in the technology industry, creating products and services that have never existed before, I can tell you that we can use British technological innovation to solve these border issues.
So, let’s free ourselves from the stifling standards of the Single Market. Let our small businesses buy from the world to lower prices for our consumers, replacing government aid with free trade.
The small business backbone of this country stands ready and eager to get on with the job, come 29th March 2019.
I’ve spent the whole of my working life solving problems no one thinks can be solved. Don’t let anyone tell you that “no deal” cannot be done.
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I was pleased to attend the publication of Lord Lilley’s Fact – NOT Friction in London this week; an excellent, informative paper published jointly by the European Research Group and Global Britain explaining how there are widespread misconceptions about the costs and implications of not being in a customs union with the EU. I agree with him: these misconceptions have led the Government into the wrong negotiating strategy for Brexit.
In Rotterdam the week before last, I saw how transit documents procured in advance and lodged electronically allow veterinary goods from third countries all over the world outside the EU to move predictably and rapidly into the EU, and be cleared by their import declaration and any other checks necessary in commercial premises 40km behind the border.
The three essential documents to make this run are the export declaration; the transit document to get the goods through and behind the frontier; and the import declaration that can then clear the goods once inland.
Non-veterinary goods go deep into Europe under such documents and are cleared when the import declarations are made on arrival at customer warehouses or kept in bond for future clearance.
The cost of this whole customs process is around €25 per document or between 0.1 to 0.4 per cent of value for the average consignment value of €25k depending on whether a company gets a customs broker to procure some or all of the documents, (plus up to another 1 per cent for the veterinary inspections on veterinary goods, around a third of which could be subsidised by our government if it chose to do so, being the government vet fee).
The export declaration is fairly easy for companies to do themselves, but the transit document and import declarations take a bit more customs expertise. Specific border inspections for veterinary goods can take place in authorised commercial premises well away from the frontier itself, and from the perspective of their authorisation they just need access to adequate space and facilities, government vet availability, and reasonable off-site access to professional sample testing facilities.
These processes do not require the exporting country’s domestic regulations to be aligned with the EU. EU standards need to be met for imports in the same way that goods exported to the US need to meet US standards.
What they do require for borders to remain efficient is for the documents to be prepared in advance so that lorries do not need to be stopped before leaving because they can’t be guaranteed to get through the other side.
The costs involved were corroborated by a major Japanese car company operating in the UK which told us in our International Trade Committee a few weeks ago that they can run these documentary procedures in-house for about £30 per shipment of equivalent salary cost. Multinational firms such as these are already well used to the data and documentary requirements for sourcing components globally.
I also met roll-on roll-off ferry operators in Rotterdam who have Nissan’s UK operation as a major client, who are expanding capacity to meet demand for regular just-in-time shipments and are most focused on getting their customers, who are often the freight forwarders, geared up to ensure all arriving trailers have the right pre-cleared documents. They need them an hour in advance to be able to match up their port traffic management systems with the documents of the lorries they expect to arrive.
There is no reason why similar processes could not also be effected behind the border at Calais to keep the frontier flowing freely and shipments being cleared with predictable timing as in Rotterdam, and if the authorities there want to keep their business that is what they will end up doing.
We need to get our exporters and our exporting ports and service providers geared up to have their export and import declarations and the transit documents ready in the same way. That way just-in-time supply chains are not threatened.
Businesses need to be ready with processes for generating the data to lodge electronically. Dover, Folkestone and Calais need to adjust their port inventory management so as to reconcile their traffic bookings and manifests with the documents matching the shippers’ documents. At first this might have to be somewhat rudimentary because the authorities have left preparation so late, perhaps being done by hand and needing more advance notice; however more efficient modern systems could be introduced fairly quickly.
Investing in these logistics processes will be equally useful for trade, whether, as is my preferred option, we end up with a regular free trade agreement as offered by the EU in March (and the processes can be adapted to ensure no hard border in the island of Ireland too); whether we leave the EU at the end of next March without agreeing a Withdrawal Agreement; or whether we have an “orderly no deal” with side agreements in key areas like transport and licensing which can help the logistics industry, as the “no-deal” preparation the EU has set out suggests they want. The basic requirements for borders are the same, and are what businesses all around the world manage successfully with standard processes every day.
If we prepare in this way, we will be prepared, whether we are able to arrange zero tariff and zero quantitative restriction trade with the EU before or after the end of March next year.
It is worth considering the costs of these processes in the context of the rest of the transport supply chain. They are a very minor part of the cost of the overall shipping cost, which is often many hundreds of pounds for each of the inland transport legs, from premise to port, port to premise, and the ferry or rail crossing carrier cost.
At 0.3 to 1.4 per cent of average shipment value they are also only a tiny fraction of the 12 to 24 per cent non-tariff barrier costs that were assumed in the “Cross-Whitehall Briefing” leaked in February, which were the major factor in the Government’s negative economic forecasting of World Trade and FTA scenarios for our trade with the EU.
The Government has ill-advisedly been using these hugely over-negative estimates as the reason for its negotiating strategy of high regulatory alignment and “frictionless” trade with the EU, and this has landed it in its current mess. Ironically the outcome of that mess is the idea of the customs union “backstop”, which when you read the small print contains the more costly and completely antiquated requirement for physical paper forms inspected and stamped by customs officers, for every commercial shipment between the EU and Great Britain, and every shipment across the Irish Sea.
While there may be a few teething troubles with the above processes being implemented from the second quarter of next year, with the right application by authorities and businesses costs of such high scale shouldn’t eventuate, and in any event won’t persist for 15 years as Government assumes.
In particular the car industry should be able to adapt relatively easily, and rather than prejudice our independence by worrying about overestimated costs, we should focus on getting small- and medium-sized businesses ready, and improving general business conditions. Whatever the size of business, most just want certainty as to what they need to do, and that is of far more value right now than indefinite transition, more political argument and risk.
The perfectly normal customs processes I saw, available now, without new technology and under current EU law, should be the focus. Preparing them is a far better strategy than tilting at the windmills of a never-to-be practical “Facilitated Customs Arrangement”, suffering under the illusion that economic Armageddon is the alternative, and waking up to the reality of the EU being in control of our destiny.
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Many people seem to think that innovation in construction is something that happens as a matter of course. From Palaeolithic caves to living in Neolithic mud brick houses; from Greek lintels to Norman arches; and from massive stone walls to slender steel frames, improvements in design, content and material efficiencies are a signal feature of progress over time. While it appears that living conditions improve naturally as history moves forward, in reality progress requires conscious human intervention to challenge and change the old, less efficient, less imaginative way of doing things.
And yet, the construction industry is stuck in the past. Over the decade to 2016, the National House Building Council Foundation confirmed that a constant 85% – 92% of new housing has been constructed using traditional brick/block masonry construction, a labour-intensive mode of building that has ostensibly remained the same for centuries. Essentially, clay raw material is dug from the ground, formed in moulds, placed in kilns and fired into bricks, these are transported by lorry across the country where armies of labourers work for weeks and months, in sun and rain, to place one on top of another.
There was a brief period, post-war, when new prefabricated techniques were almost commonplace. According to Chartered Surveyors, Peter Barry, between 1945 and 1955 “around 20% of new housing was system-built, amounting to some 500,000 units, with a further 750,000 units being constructed between 1955 and 1970”. However, sixty to seventy years later, we still sanctify the “wet trades” – sticking block upon block, slapping plaster on it and painting it by hand.
In 2010, at the height of the recession, there were 1.2 million construction labourers engaged in laborious processes. Surely, if innovation is required, here is a good place to start. But we have to recognise that if such an innovation revolution is to happen, then it is not going to be painless. As a vociferous opponent of Thatcher’s assault on the miners in the 1980s, I still realise that the transformation of the construction industry is going to have to be as radical if it is to be meaningful. Until then, we’ll continue to read reports that bemoan the lack of innovation. “It’s time to modernise the construction industry”, says the 2016 Farmer Review. You don’t say!
Brexit could be the one significant spark to help generate the innovative construction sector that we all need. It should, and must, force the construction industry to innovate.
In the UK, around 7% of construction workers come from other EU countries and 3% come from outside the EU. The Office for National Statistics reports that London’s construction sector relies on 28% of workers in London coming from EU countries, and 7% migrant labour from outside the EU. Of the EU workers, the majority are from central and eastern Europe, while 10% are Irish. Even though the Farmer Report cites an extant decline in the construction labour force due not to Brexit, but demographics (there will be, it says, a “20%-25% decline in the available labour force within a decade”), it is reasonable to assume that Brexit may indeed result in a shake-out of foreign workers labouring on sites across the country. But this needs careful assessment, not knee-jerk reactions.
Polish plumbers do not relish sticking their hands up the U-bends of the British public for the rest of their days when they could be employed back home laying much needed infrastructure; not all Romanian labourers are content to shovel gravel on the driveways of East Cheam when they could be building houses in their home towns to create a better quality of life for their children. The success of EU free movement has created a flow of poor people desperate to make something of themselves away from home, but not all enjoy the menial lifestyle that they have to endure to achieve it. It takes skilled and semi-skilled labour away from where it is needed.
Of course, like the characters in Auf Wiedersehen, Pet, working abroad for short stints to amass some cash is a legitimate sacrifice for many. But many migrants will not be sad to leave their badly-paid, labour-intensive, shift-working existence crammed in the modern-day tenements of North London, provided that there are opportunities elsewhere. This is not a legitimisation of “a tough immigration policy” (as Brexit ought to provide the chance for a more liberal immigration policy), but a chance to improve working conditions and modernise a Dickensian industry. Industry needs will change and the consequence should be to allow people to make their own decisions rather than be driven by capital flows and an iniquitous labour market.
But if Brexit makes it more difficult to recruit menial manual labour (and there is nothing yet to say that it inevitably will), then this could provide the stimulus for innovative change. “Cheap labour” and “labour intensive” are the hallmarks of developing countries and nothing to be proud of. Mechanisation and investment in the next round of productive forces are important for the development of society through the liberation of workers from common drudgery.
The Independent recently described Brexit’s potential impact on the farming sector. By withdrawing the Common Agricultural Policy subsidies and the looming threat of restrictions on cheap, exploited Bulgarian and Romanian crop-pickers, there ought to be a drive for efficiency and innovation. One picker describes starting work at 5am until late afternoon earning £500-a week for six weeks of six-day work. Meanwhile, The Economist reported that “Brexit will force a change in farming that could change the face of rural Britain” and after reading about the paltry wages, we might add, “for the better”. Of course, it might simply increase the price of strawberries and seasonal vegetables. It might be that farming industry will refuse to play ball and British grapes will literally wither on the vine post-Brexit. But it should present an opportunity that can and should be seized. Cheap labour contents itself with a lack of innovation – why invest in machines when you have thousands of expendable workers willing to slave for a pittance? This is something that we ought not to condone.
Drawing the analogy back to the construction industry, the same opportunity prevails. Just as machines may pick crops, so machines may spray paint houses. Factories might make mass housing. Machines might 3D-print homes.
Of course, maybe construction costs will rise. Indeed, maybe construction workers’ wages will rise (surely no bad thing). But maybe, all those prefabrication and modern methods of construction innovators – who for years have not been able to get a foothold in the market because of the closed shop of the labour-intensive, old-fashioned construction industry – will suddenly find that they are being listened to. Suddenly “creativity” – the lifeblood of architecture – may be allowed to flourish. This could be the basis of a rational construction industry.
Obviously, none of this will happen if we perceive Brexit as a danger. But it is equally true that Brexiteers need to see this as a challenge. It is not a done deal. Innovation requires conscious planning for results to mean anything. Simply shaking up industry doesn’t mean that industry will respond positively or progressively. It requires political will. As the Egan Report said exactly 20 years ago: “We are issuing a challenge to the construction industry to commit itself to change”. Let’s seize the day.
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The Today programme on BBC Radio 4 recently gave coverage to Japanese Prime Minister Shinzo Abe’s statement that Britain will be welcomed into the Trans-Pacific Partnership with “open arms” after it leaves the EU. In a bizarre turn of phrase, the BBC presenter described this as a ‘tonic for Brexiteers’.
The referendum – that decisive, once-in-a-generation ‘People’s Vote’ – took place on 23rd June 2016. Whether you voted Leave or Remain is now moot. To quote one MP: ‘We are all Brexiteers now’. The people of this country gave their clear instruction and the Government must deliver on it. Therefore, the BBC was incorrect. What Prime Minister Abe stated was not a tonic for Brexiteers but a tonic for the whole United Kingdom.
Yet from spring 2018 onwards we have witnessed a co-ordinated and unrelenting media assault on Brexit by multinational companies and their confederations. Day after day, the British public and its Government have been subjected to thinly-veiled threats from those corporations and interest groups with most to gain from the status quo. Their arguments about the dangers of Brexit have been allowed to percolate freely down into our national consciousness without any analysis or rebuttal. We presumed the battle was won and thus have surrendered the business argument.
Suddenly Brexit had stopped being a cut and thrust of differing opinions and become a torrent of carefully orchestrated negativity. What was missing was the voice of businesses that were positive and optimistic about the future of a sovereign Britain – the hundreds and thousands of smaller businesses with no lobbying power and fragmented representation who saw opportunity from Brexit as a catalyst for change. So it was that the Alliance of British Entrepreneurs (or, like the Japanese Prime Minister, ABE for short) was founded out of frustration by me and Ed Harden.
ABE set out to give those smaller businesses a banner under which to gather and a mouthpiece to amply their voice. Our great aim was to remind both the Government and the British public that business does not start and end with Airbus and the CBI. In late September, 200 of our business supporters wrote an open letter to the Daily Telegraph in support of a Canada-style free trade deal. We have since, in true entrepreneurial style, grown explosively, nearly doubling in size in a couple of weeks.
We are often asked why we refer to our business supporters as entrepreneurs. In our mind’s eye, it is easy to imagine an entrepreneur as a certain type of person. Someone involved in the tech industry perhaps. Someone modern, disruptive and metropolitan. Indeed, we have a number of supporters who fit those criteria. However, for ABE, being an entrepreneur is about a mindset. To us, entrepreneurship is characterised by adaptability and a positive outlook coupled with a firm sense of self-belief and a willingness to take responsibility. This definition transcends background, sector, geography or gender. As such, we are proud to have the backing of hundreds of entrepreneurs: from the sole traders in the West Midlands to the CEO of a London-based asset manager and all the family businesses, manufacturing firms, haulage companies and fishing boats in between.
Whilst we have had some initial success, we face two great challenges. The first of these is apathy.
Brexit didn’t end with the referendum. That vote was the first shot in a battle that is now being fought hand to hand in the mud with both sides dug in. The public at large are tired by years of political wrangling and are perplexed as to why it is taking so long. Even amongst those small businesses and entrepreneurs who feel passionately about the future of this country many are too busy running their day-to-day activities – investing, training and expanding – to devote time to campaigning. We have tried to counter this by doing their campaigning for them. Seeking their views on a light-touch basis and then doing the leg work to get them heard as one of a hundred voices singing the same tune.
The second great challenge was communication. SMEs don’t have corporate PR firms on eye-watering monthly retainers. Indeed, most don’t even have a separate media department. Even where there was the will to share their view, this was drowned out by the lobbying and closed forums of the big business and establishment set-up. We knew we lacked the resources to broadcast at a conventional level. Instead, using the power of social media and specific, targeted correspondence we have aimed to create enough noise to be heard. Our short-term goal has been to disrupt and interfere with the prevailing message of the big lobby groups. Every time they have a press release ready, we’ll be there putting one of our entrepreneurs forward with a counter that relates to their own business, hitting their statements with real world, real business rebuttals.
We admit that our entrepreneurs don’t and can’t always speak for their thousands of employees. But as the strategic decision-makers for those firms, they have looked at the future and seen a Britain that prospers outside the EU: a free-trading, dynamic Britain whose regulation stays lithe and reactive to changes in the global economy; a Britain that looks resolutely outwards and unrelentingly seeks out new global alliances and partnerships. This Britain cannot exist under the Chequers proposal. ABE will continue to lobby for a Canada-style free trade deal that respects the referendum and allows British business to once again take its place at the top table of global trade.
This great and noble opportunity must not be squandered.
Find our more about the Alliance of British Entrepreneurs at their website
The news that Boeing has just opened a £40 million manufacturing facility in Sheffield to make parts for their latest 737 and 767 aircraft, which are assembled in the United States, serves to remind us that our world-class aerospace business is global and to torpedo the claims of Airbus – and some car manufacturers – that Brexit will threaten jobs in the UK because it will cause havoc to the just-in-time manufacturing process. Boeing’s plans call for the production of 52 aircraft a month with thousands of parts being shipped every month to Portland, Oregon, so timely delivery will be just as critical to Boeing as it is to Airbus.
So, the question arises: if Boeing can operate a slick production process using parts made in Britain, shipped six times the distance to their assembly line compared to shipping Airbus parts from Bristol or North Wales to Hamburg or Toulouse (and BAE ship 15% of every single F35 Joint Strike Fighter to the Lockheed Martin plant in Dallas), what is Airbus’s problem? The answer lies not in economics but in politics.
As is increasingly clear, despite protestations to the contrary, elements of the EU really do want to punish the UK for having had the insolence to Leave and to deter other countries from following our lead. France seems to be the most determined to press for punishment, partly to try to seize the City of London’s business and partly to promote President Macron as the new EU leader as Angela Merkel’s grip weakens.
Recently there were reports, subsequently denied, that President Macron intended to require UK visitors to France to obtain visas whilst those Brits with homes in France would immediately upon Brexit become illegal visitors. Apparently, the word ‘not’ was omitted in translation and the proposed new law designed to prevent such action. However, Dominic Raab subsequently spoke about the possibility of France ‘deliberately’ delaying lorries entering the port of Calais.
Earlier this year, the EU announced the creation of a fund to develop new defence equipment, a programme from which the UK, home to Europe’s largest defence contractor and with the largest defence budget in Europe, was to be excluded. Furthermore, the UK is to be ejected from key parts of the EU satellite navigation programme, Galileo, despite having contributed £1.2 billion and constituting, through Airbus subsidiary Surrey Satellites, a key portion of the technology. Any reasonable person would ask where was the commercial, let alone defence, interest in excluding such a major European player. Again, the answer lies not in economics but in politics: the UK has to be punished even if it means damaging the defence interests of the continent.
As we approach the sombre commemorations of the centenary of the 1918 armistice which ended The Great War, it is worth pausing to reflect on the role of some of those nations who, in the famous words of Margaret Thatcher, ‘we either rescued or defeated’. The British people have voted freely but decisively to Leave the EU, yet face punitive measures by some on the continent for whose liberation in two world wars this country and its Empire shed 1,300,000 lives. Whilst falling over themselves to secure favourable trade deals with the rest of the world, the EU’s leaders have adopted the reverse policy with their closest neighbour, refusing to discuss trade arrangements before sorting out an artificial problem of their creation by weaponising the Irish border, a clear solution to which has been proposed by the ERG and others.
In another example of the pathetic approach in Brussels, I understand that the EU’s aviation safety agency, EASA, is debarred from discussing with our CAA how we manage air travel post Brexit. Given the UK’s prominence in air transport, with Heathrow being the most important transatlantic gateway airport in Europe, why is EASA not engaged in constructive debate? Iceland, Norway and Switzerland are members of EASA even though they are not EU members, so why remove the UK? Again, the answer lies in politics, not economics. They want to cause inconvenience, if not chaos, to rub home to the others the cost of recovering national sovereignty.
All this illustrates the fundamental naivety exhibited by the UK at the outset of the negotiations, namely that if we conceded and acted in a friendly fashion the EU would respond in similar vein, leading many Leave voters to question the motives of those in charge. We never acknowledged the determination of the Commission to protect The Project (to create the United States of Europe) and we failed to recognise the strength of the cards in our hands.
So we threw away the security card, offering unconditional support to the 27, only to be rewarded by exclusion from EU defence programmes. The Prime Minister offered to pay a staggering £39 billion of our money in return for – nothing. Well, if she thinks British taxpayers will tolerate that, I fear she is mistaken. I can no longer withhold my vote in Parliament, but I can withhold my taxes unless I see a fair trade deal is secured.
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