This is just more evidence of what a complete shower this all is. The port of Rotterdam hiring a thousand new customs people - you might say Brexit is increasing employment - but what kind of employment? They aren’t adding to value, but there to deal with all the excess regulation Brexit brings to the party. Regulation that adds more time between goods moving between us and them - which is an increased cost to business, and inevitably an increased cost to us.Clarets4me wrote:Here is the full article, written by James Bartholomew, it was not a " Telegraph " editorial, by the way. Let people make up their own minds ...
Banks and businesses aren't waiting for instructions
Before long, the show will start all over again. Theresa May will probably strut her stuff in Brussels and Berlin. Jean-Claude Juncker will reject British demands, insult Mrs May, then say she’s terrific. Emmanuel Macron - boy wonder that he is - will take time out from the chaos in his own country to be condescending about ours. Crisis summits will be held. Angela Merkel will look worried.
Subliminally, we in the audience will get the impression that everything depends on presidents and prime ministers arriving and departing in black limousines. They are, of course, important. All right, very important. But what tends to be forgotten is the role played by “the little battalions”: actors in the drama who don’t get into the headlines – people who do not “run” the economy but “are” the economy. If we end up with no deal, their activities will be crucial.
One worry has been that the ports will get clogged up. But European ports are not inert objects, like chess pieces, which the limo-riders get to move around as they please. Ports have their own managements. Take Rotterdam. Roel van’t Veld is the chief of the Customs Authority of the Port of Rotterdam. As Rotterdam is the biggest port in Europe, he is part of quite a big battalion. He is not waiting to get a directive from Jean-Claude. Once Britain leaves the EU, the UK will become a “third country” for EU purposes which means extra work processing freight traffic. Roel started recruiting up to another 1,000 new staff earlier this year. A new IT system has been introduced. A simulation study has been done to identify potential bottlenecks. Roel said, “Our job is to make sure things don’t seize up and we are pretty good at it.”
Our own shipping companies and ports have not been waiting for instructions either. Seaborne Freight has been working on a new shipping route from Ramsgate to Ostend. Associated British Ports is spending £36m on new container port capacity at Immingham. Such extra capacity will be available to profit from any clogging up of the Dover/Calais route. But talk of blockages there may be exaggerated. Jean-Marc Puissesseau, chief of Calais port, is another of the “little people” working hard to keep the traffic flowing. He remarked, “we are doing our utmost” to avoid stacking lorries on the motorway.
The great illusion is that people and organisations don’t react – that they could see a train heading straight at them and not budge. They take action because they have every reason to. If businesses see an obstacle, they immediately start thinking how to get round it to preserve their profitability. Politicians have been creating uncertainty as if this were their primary job. Businesses have been working to reduce it. It is one of the advantages of a pluralistic society that we do not depend on central direction. Companies and individuals are independent units.
The banks, insurers and other financial companies have all been making extensive preparations in the past few years. Barclays has added an extra 150-200 staff to its subsidiary in Ireland which will now handle the business which needs to be done from within the EU. Jes Staley, the chief executive, says the bank is “100 per cent prepared” for a no-deal Brexit.
What about the £14 billion Aviva savings and insurance company? To be honest, it hasn’t done much. That’s because, in this particular case, there has been no need: “We have a presence in several global markets and so believe Brexit will not impact us at all, as all our businesses are incorporated locally.” Standard Life, another insurance major, has beefed up its presence in Ireland and Luxembourg to conduct its EU business. In fact, the picture for financial services – one of our biggest industries - is remarkably good. Even the Remainer-oriented Financial Times has reluctantly admitted, “financial services companies have made extensive preparations”.
Michel Barnier looks grave and haughty as he tells us we can’t have this and we can’t have that. It is tempting to imagine that companies need his permission to do business. They don’t. Lord Bamford wrote a letter to the Telegraph last week saying that his company, JCB, which makes diggers, is fully accustomed to selling on World Trade Organisation terms. Forty per cent of his exports go to such countries. It’s “a matter of routine”. The routine can be extended to the EU.
Yes, there are problems in certain specific industries. Britain is big in pharmaceuticals and this area is full of non-tariff barriers. But, again, our companies have reacted. They are multinationals and have been selling in the EU for years. They know what they need to do to comply with the rules. GlaxoSmithKline, for example, one of our pharmaceutical giants, has been re-testing and reregistering its products where necessary. It is costing the company £60-£70m but that’s a small fraction of its £30 billion annual sales so it is able to make this remarkable statement: “Over the long term, we believe that Brexit will not have a material impact on our business.”
The industry where the obstacles seem most difficult is automobile production. Components whizz across the Channel and back again. There is a relatively high EU tariff of ten per cent and non-tariff barriers, too. It would be useful, even in the case of no overall deal, if a side-deal could be made for this industry. If not, the adjustments might be painful. But even here, companies are certainly trying to work out how to change things here and there to smooth Brexit. Harald Krueger, chief executive of BMW, has remarked “BMW is about flexibility”.
The natural bias of news is towards star politicians and anything negative, which includes any news about problems with Brexit. What tends to be missed is the myriad individuals and organisations making plans and reacting to circumstances. There will be much more of this to come in the next three months as the crunch date approaches. All countries have on-the-ground flexibility but Britain, being less centralised than, say, France, is particularly good at it. Sometimes people on the outside perceive this better than we do ourselves. David Folkert-Landau, chief economist at Deutsche Bank, remarked recently, “I am not at all worried about the UK whatever the arrangement because they’re the most flexible country in the world.”
Business deals with this (and passes the cost to the consumer) but our public sector can’t, because it is starved of money by a government happier to hand out tax breaks to the rich than actually pay for things people need.
Those who suggest a no deal Brexit will be fine should be held to account.