On the four-year anniversary of Brexit last Wednesday, business and trade secretary Kemi Badenoch trumpeted its successes. “The British people’s conviction that the UK would excel as masters of our own fate has paid dividends,” she said, launching a report detailing the benefits.
Some notable accomplishments included a significant increase in honey sales to Saudi Arabia, a rise in pet food exports to India, a surge in UK pork exports worth £18 million over five years to Mexico’s restaurants and households, and a significant growth in UK beauty product sales in China due to the removal of barriers.
Badenoch, who is viewed by numerous Conservative MPs as one of several individuals asserting their influence for a potential leadership bid in the near future, stated that our department is utilizing the opportunities presented by Brexit to establish the UK as the premier location for initiating and expanding a business.
However, the confident attitude and numerous claims made in the Department for Business and Trade’s (DBT) document on the 4th anniversary of Brexit were met with skepticism from the industries mentioned.
According to Paul Barton, a representative of the Bee Farmers Association in the UK, none of their members are exporting significant quantities to Saudi Arabia.
“Speaking from the industry, we’ve not had any assistance from the government in exploiting [the Saudi Arabian] market, getting access into that market. So I don’t know where their increases come from.”
He stated, “I recall a man, possibly from Kuwait or Saudi Arabia, who came to the door and purchased a few buckets of honey years ago. I assume he packed it in his carry-on bag.”
In the UK honey industry, individuals appear to be prioritizing different matters. It is concerning that only a small percentage (less than 10%) of the honey consumed in the UK is actually produced domestically, according to Barton. This is due to the strong competition from inexpensive honey imports from China.
Regarding Brexit, a major concern involves importing queen bees rather than exporting the end product to Saudi Arabia or other countries. However, Brexit is causing more issues than providing assistance in this aspect.
Queens are reared in southern European countries and brought to the UK so that farmers can begin their hives earlier in the season. But Brexit red tape means the bees are now subject to expensive and disruptive veterinary checks.
According to industry experts, the government’s assertion that a £550 million barrier resolution has aided British beauty companies in exporting to China is not related to Brexit. Instead, the recent relaxation of animal testing regulations in China has made it easier for UK manufacturers to sell their products in the Chinese market.
Millie Kendall, the leader of the British Beauty Council, stated that the negative impact on trade with the EU far surpasses any benefits. She emphasized the desire to continue selling to Europe and the US. The economic consequence has been a loss of £853m in exports to the EU, which makes up 65% of total exports. While £550m may seem like a significant amount, it does not make up for the overall loss.
A member of Kendall’s team shipped some items to Spain in August, but they have yet to be delivered. Another larger company had to construct a warehouse worth £1m in the EU solely for the purpose of distributing products. According to Kendall, many smaller companies have given up altogether.
Experts stated that Badenoch’s accomplishments may appear insignificant when applied to larger industries. The announcement from the business secretary announced the successful unlocking of £25m in medicine exports and £17m in new business in Colombia.
Dr. Jennifer Castañeda-Navarrete, a senior policy analyst at the Institute for Manufacturing at Cambridge University, stated that when combined, these values make up less than 1% of the overall worth of UK pharmaceutical goods exported in 2022.
In 2022, nearly half of all pharmaceutical exports were sent to the European Union. It was cautioned that the once flourishing pharmaceutical industry in Britain is now facing a trade deficit due to increased reliance on imported medicine. The most recent data from 2022 indicates a global deficit of $5 billion, in contrast to a surplus of $9.7 billion in 2010.
A representative from the business department stated that various sources, including the Observer, predicted negative outcomes for the UK economy post-Brexit. However, as evidenced by this document, those forecasts have been proven inaccurate. While there have been challenges, it was never claimed that everything would be flawless.
The report relies on official data and highlights that many issues attributed to Brexit are actually a result of Covid and supply chain disruptions. Its purpose is to counter the negative narrative surrounding Brexit.
The press release from the business department fails to acknowledge the struggles faced by small businesses in the UK. These companies have experienced a decline in their export markets, resulting in many of them being completely wiped out. According to researchers at Aston University, it was estimated that by 2022, 42% of British products that were once exported to the EU were no longer available on shelves.
Smaller businesses have not had the financial resources to cover expenses such as warehouses, veterinarian services, distribution, customs fees, and additional shipping costs caused by Brexit, unlike larger companies.
According to Thomas Sampson, a professor of economics at the London School of Economics, larger companies have not experienced a decline in exports to the EU while smaller businesses have seen a decrease of 20%.
Sampson stated that while it is commendable for the DBT to address market access barriers, it may only have a minimal impact compared to the significant consequences of leaving the single market and customs union. He believes that the key progress in the next five years will be achieved by prioritizing the EU and streamlining our partnership.
David Henig, head of the UK Trade Policy Project, expressed that the government’s fourth anniversary of Brexit report consisted of “the typical assortment of assertions that are somewhat twisted in different manners.”
Source: theguardian.com
