This week in Brexitland, July 29, 2022

1. A British business man departs for the EU, demonstrating along the way why “F**k business” is in fact an underlying principle of Brexit

Daniel Lambert is a man who runs a successful wine import company. Or at least, it was successful until Brexit made that a lot more difficult. He still supplies M&S, Waitrose and hundreds of smaller retailers, but the paperwork has by his accounts cost his business £150,000. That’s £150,000 of real red tape, not the imaginary “EU red tape” various government departments have been chasing for years.

To get round this, he is setting up a company in France that will handle the bulk of the business. “I am doing what the government was suggesting, which is to have a company here and in Europe to mitigate the impact of Brexit,” Lambert said. Get your mind around that for a second: the government is telling British businesses that the best way round the problems created by Brexit is to relocate at least part of your operations to the EU.

This is the thing I always return to: I don’t see how the British right can continue to support Brexit forever. Leaving the EU made less than zero sense from a centre-right perspective. It’s not a coincidence that it was post-referendum, not before it, that Boris Johnson uttered the infamous “f**k business” line, or that it took the country voting to Leave for uber-Thatcherite John Redwood to start babbling about austerity. Brexit is ultimately pro-government, anti-business, pro-bureaucracy, anti-free trade, and you can either believe in Brexit or believe in those other things, but in trying to believe in both you will end up finding it impossible after a while and unconsciously start sounding like John McDonnell.

We are now in a situation in which it is much more advantageous to set up a business in France than in Britain, even with all of the downsides having a business in France contains when put next to the smoother Anglo-Saxon way of doing these things, simply because you get access to the single market and Britain has insanely decided to set up a system which rewards EU companies over British ones in terms of importing and exporting. This is why Daniel Lambert won’t be the last businessman to leave Brexitland for good - unless we sort out this insane situation, we are disincentivising foreign investment, free trade with all of our nearest neighbours and doing business in Britain in general.

And yet, we have two finalists to be the next Tory prime minister who can’t even bring themselves to admit that the queues at Dover have anything to do with Brexit, never mind the larger structural problems that are leading to businesses leaving Britain and heading across the channel. It’s no good having lower corporation tax when it’s a pain in the arse to sell your goods into a massive marketplace right on your doorstep. As I say, one day, the British centre-right will cotton on to this. How long that takes, however, I wouldn’t like to hazard a guess. Feelings always trump facts in politics, now more than ever.

2. Brexit red tape worse than expected

Rishi Sunak and Liz Truss have both vowed to axe as much “EU red tape” as possible, tacitly promising that the economy will be vastly improved once all of the legislation deriving from EU Directives has been blown away. The irony of this is that it is Brexit that has in fact created red tape, all in the spirit of the 18th century vision of sovereignty the religion of Brexit espouses.

This Brexit red tape is going to hit the profits of the UK chemical sector by £2 billion (yes, £2,000,000,000), a phenomenal figure, over the coming years. This is double the amount the sector itself thought the new Brexit red tape would cost them only last year.

The reason for this is actually easy to explain. When we were in the EU, the regulatory schemes that governed things like the chemicals sector in the UK were continent wide. Most things have to conform to a set of standards that apply across almost all of Europe (every country in the single market, plus most countries outside of it adhere to the standards anyhow in hopes of joining someday). When Britain left the EU, it decided to set up its own set of standards in lots of areas, the chemical sector being one of them. The reason this costs businesses money is that it means that companies now need to adhere to a whole new standard, even if it is very similar in practice to the EU standard. It is a new round of red tape to get through - and I mean “red tape” in its true, actual definition, as in regulation that provides no actual benefit, be that to employees, businesses, the environment, anything or anyone whatsoever - just a bunch of regulation that ties things up and goes nowhere.

The regulations created for the chemical sector in particular are pure Brexit vanity, a great example of having a new regulatory orbit just for the sake of it. Using newfound sovereignty simply to demonstrate that you now have it. Again, even I get tired of saying this all the time, but this is exactly the sort of thing the centre-right is supposed to loathe. Regulation for the sake of it, governments doing things just because they can for no clear positive purpose, all of these things used to be anathema to the British centre-right. Now, it’s their modus operandi. As I asked in the first item this week, how long can this go on for? The most interesting thing about the Brexit mess for me is the answer to this question.

Thank you for reading. If you haven’t subscribed yet, please do. And as ever, I will be back next week with the worst of Brexit.