As part of the UK's exit from the EU, the UK and Spain have agreed in principle that the land border will go, possibly within six months, but the terms of the deal first have to be made into a formal treaty with the EU:
•The single road linking the territories will be widened to allow people and cars to travel freely
• Some infrastructure will stay at the border, a few guards will remain on standby, and finalities still need to be worked out such as judging the necessity of certain customs checks away from the border and if so how they would work
• For the border to disappear, Gibraltar will effectively become part of Europe's passport-free travel area - the Schengen zone - though there is a different use of language from both sides on whether it will be "part of", or "connected to" Schengen
• With the border gone, new arrivals will only be checked if they enter by sea at the port and by air
• For the first time, as well as the Gibraltar border guards, there will be guards from the EU border and Coastguard Agency known as Frontex also checking passports.
Mr Raab dismissed the difficulties faced by fishing businesses as “teething problems” and said he was “not convinced” that the thickets of Brexit paperwork and delays were the result of the agreement.
“The agreement we have struck, both short term and medium term and long term, will create huge sustainable opportunities,” he claimed.
“Of course, we've always said as we leave the transition period with a deal - but even more if we hadn't had a deal - there will be some teething problems.
“We're very focused on working with all of the different sectors, including the fishing industry, to resolve any of these teething problems.”
Mr Raab said that the government was investing £100m into the fishing industry to enable it to grasp the additional opportunities which it believes will be available as a result of Brexit.
Despite warnings from industry figures of boats being tied up at quayside and companies being on the brink of closure, Mr Raab said: “The fishing industry is going to want to increase its capacity to take advantage of those increased stocks.
“That's why we're putting in £100 million to shore up, to strengthen, the fishing industry right across the whole of the UK, to make sure that this really important opportunity of leaving the EU and leaving the transition period can be properly grasped.”
In a letter to Mr Johnson last week, SFF chief executive Elspeth Macdonald accused the prime minister of misleading the public about the agreement and giving the industry “the worst of both worlds”.
"You and your government have spun a line about a 25 per cent uplift in quote for the UK, but you know this is not true, and your deal does not deliver that," Ms Macdonald wrote.
The prime minister's stated approach, known as “zonal attachment”, would have secured British boats up to 90 per cent of the catch in UK waters for important stocks such as herring. Instead the deal actually means the UK share of the herring catch is just 32.2 per cent and for other fish is even lower, while EU boats have "unfettered" access to British waters, she said.
"This can hardly be claimed as a resounding success," Ms Macdonald wrote.
“This industry now finds itself in the worst of both worlds. Your deal leaves us with shares that not only fall very far short of zonal attachment, but in many cases fail to 'bridge the gap' compared to historic catches, and with no ability to leverage more fish from the EU, as they have full access to our waters.”
From horse racing to fishing to road haulage, British industry is in chaos. No wonder leavers are turning on each other
Other industries want to know if Boris Johnson’s promised “compensation” for fishing losses means a huge subsidy in perpetuity for this less than 0.2% sliver of the economy? Because the problems exploding in one industry after another, in less than three Brexit weeks, are not going away.
That well-staged last-minute-deal melodrama was designed to end Brexit stories, relegating all boring details of the aftermath to the business pages. Not so. The stories are so strong even the ardent Brexit-creating press can’t resist them – though now those newspapers add a self-exculpatory slant that blames the government for a bad Brexit. Here are some random discoveries since Brexit day.
The Sun warns of Brexit’s threat to the Cheltenham Festival: last year 180 Irish horses ran, but this year, “Brexit leaves Irish racehorse trainers fearing ‘colossal’ tax bill”. Likewise, the cost of taking UK showjump horses across the Channel is prohibitive for their British owners. Motorsport faces similar fees for cars shipped to EU races.
The fashion industry – especially Asos-type, cheap end with small margins – is hitting a rules-of-origin crisis, paying new duties on its many products manufactured outside the EU. Fun stories in the Sun include the lorry driver crossing the Gibraltar/Spain border whose bottle of Nando’s sauce is confiscated, along with all those ham sandwiches snatched by the Dutch. The Daily Telegraph reports the flight of Europeans from England, but not from “remain-voting Scotland and Northern Ireland”. Farmers Weekly sends up flares about plunging meat prices, due to delayed exports.
All these losses to a host of smaller industries mount up fast. But look at the Sunday Times report on the crisis in a car industry that’s worth £42bn in exports, employing 823,000 people, where car-part delays are halting production at some factories. Yet still, most economically deadly is the unseen slipping away of invisibles, where that 80% of the economy in services is already leaking tax revenues. Bloomberg keeps up its grim recording of no likely progress: “City of London’s plight laid bare as Brexit deal hopes fade,” it reports.
And then there is the unfolding Northern Ireland disaster. Stena Line ferries has diverted its Great Britain-Northern Ireland sea crossings to the Rosslare-to-Cherbourg route instead. The Times headline reads “Doldrums ahead in shipping forecast as Brexit complicates customs”.
Over the past year I have been following the impending haulage disaster through Manfreight, a 200-lorry company in Coleraine. Its owner Chris Slowey says no, the crisis in the GB/UK crossing is not down to “teething problems”, as Raab put it, but is baked into the nature of Brexit. His lorries carrying exports to England return empty, doubling his costs, as English exporters find it too costly to sell to Northern Ireland – and that’s permanent. The Telegraph reports that one in 10 lorries are being turned back at the EU border. Delays will continue: spot checks at EU borders are standard. So will queues, lorry parks and roadside squalor. The pandemic has worsened the Brexit effect, but that was a good reason to extend the transition period.
It’s only human to confess to some remainer “I told you so” glee when ex-MP Kate Hoey wails in the Telegraph, “The Tories have betrayed Northern Ireland with their Brexit deal”. What on earth did she expect? That’s why Northern Ireland wisely voted remain.
Expect a lot more shocked Brexiters to discover what they have done, the Brexit cabinet itself is on a steep learning curve. Here’s one Telegraph columnist: “We Brexiters are being blamed for the problems we warned about. In reality, the fault lies squarely with the government and poor planning.” Oh the schadenfreude! That’s a sharp U-turn from the Telegraph’s too-eager 1 January report from the Dover front: “Chaos? What chaos?”
As Brexiters turn on each other, Brexit politics move fast. Until now the Tories planned to move on, only reviving “Brexit done” triumphalism to re-arouse the captured red wall at the election: Labour just wanted to bury the whole issue.
But the scale of the eruptions bursting out in one sector after another requires the opposition to find its footing on this tricky terrain. Many like Paul Joy on Hastings beach are still as passionately pro-Brexit as ever. Fearlessly, Labour needs to regain its voice of outrage that Brexit leaders deliberately shut their ears to what leaving the single market and the customs union really meant. A better Brexit deal really was possible.
The EU has been able to make "quantum leaps" in European integration since Britain signalled its exit from the bloc, Brussels' ambassador to the UK has said.
In his first public appearance since the UK left the single market on 31 December João Vale de Almeida said he did not think any other countries would follow Britain's example.
"After Brexit, after the referendum in 2016, we see support for Europe going up in all our countries, at least on average. Going up, not down," he told an event hosted by the UK-based think-tank Bright Blue.
"I don't see any country, not even any important opposition party in Europe, advocating exit from the European Union since the referendum.
"And I see the European Union, in the last few years, taking a number of very important and bold decisions that lead me to say that the Union is, with all its problems that we all have in these non-normal times, that the union is is is doing quite well."
Mr Vale de Almeida, a former ambassador to the United States who took his current role last year, cited the EU's response to the Covid-19 crisis as evidence that the bloc was doing fine without Britain's input.
"We made a quantum leap in terms of equipping ourselves with the financial means and the financial mechanisms to deal with this crisis, which are absolutely unprecedented in magnitude in terms of the amount of money," he said.
Conservatives continue to obsess about the burden to business of red tape, except where it is real – at the EU border
Among the various grievances that led to Britain’s departure from the European Union, resentment of worker protections was not dominant for most voters. But it was a point of urgency among many Conservative MPs, for whom freedom to deregulate was the purpose of Brexit.
That is what they meant by regaining sovereignty: emancipation from rules that, in Eurosceptic demonology, suffocate enterprise and limit prosperity. In that ideological conception, a successful Brexit is one that casts off the bureaucratic shackles as soon as possible.
But Boris Johnson has reasons to hesitate. His parliamentary majority is dependent on former Labour voters who do not embrace classical Tory faith in the free market free-for-all. On the contrary, many of those “red wall” voters are driven by insecurity that pushes in the opposite direction – against the sink-or-swim ethos of globalised capitalism. They want protection.
There is a contradiction between the demands of Mr Johnson’s new electoral base and his party’s most cherished beliefs. That tension has emerged this week in government contortions around a review being conducted by the business department into labour laws. Kwasi Kwarteng, the business secretary, denies that the review will lead to lower standards, insisting that the government’s ambition is enhancement of rights. The policy focus of the review is reported to be the regulation of hours (the working time directive much despised by Eurosceptics), holidays and rest breaks. As a committed Thatcherite from the “enterprise group” of MPs, Mr Kwarteng’s instinct towards those rules is unlikely to be to tighten. Mr Kwarteng has played down the departure from the EU working time model on the grounds that many member states exercise their right to opt out.
In so doing, he unwittingly underlined one of the futilities of Brexit. EU membership did not prevent the UK from having the continent’s most liberal labour market. The idea that new vistas of prosperity open up with yet more aggressive deregulation is a symptom of ideological monomania. It will do nothing to boost productivity, upgrade skills or cultivate long-term investment in the workforce and innovation, which most experts see as the central challenges for Britain’s economy.
Post-Brexit, a familiar path beckons for Britain, wooing foreign capital with tax breaks and cheap labour, but that is not a model to deliver any of what was promised to Mr Johnson’s newly recruited voters. Too drastic a movement away from EU standards would also provoke retaliation from Brussels under level playing field provisions in the Brexit deal. But with access to European markets already curtailed by the deal, the reflex to chase a competitive advantage at the expense of standards will be hard for many Conservatives to resist.
The real tangle of red tape is now at the EU border, where Brexit imposes cumbersome new procedures. The cost is already being paid, as fish and other animal products rot before they can be cleared for continental markets. The drag on growth is inevitable. There were warnings, but leavers dismissed them as scaremongering. Ministers now hardly dare admit that such problems exist. The tragedy – and the absurdity – of the situation is that Mr Johnson will feel compelled to indulge the rhetoric of releasing business from a burden of imagined bureaucracy to avoid taking responsibility for the real burden, imposed by him. The prime minister will indulge policies based on ideological fiction, because he turned his back on economic facts several years ago.
The international trade secretary, Liz Truss, has admitted Brexit has contributed to shortages on supermarket shelves in Northern Ireland, contradicting her Cabinet colleague Brandon Lewis.
Ms Truss joined Ireland’s foreign affairs minister, Simon Covey, in acknowledging the UK’s departure from the EU played a part in the disruption, putting her at odds with Mr Lewis, the Northern Ireland secretary, who has said disruption caused by coronavirus before Christmas is solely responsible for the shortages of some food products and is "nothing to do with leaving the EU".
A diplomatic row has broken out between the UK and EU over the status of the bloc's ambassador in London.
The UK is refusing to give Joao Vale de Almeida the full diplomatic status that is granted to other ambassadors.
The Foreign Office is insisting he and his officials should not have the privileges and immunities afforded to diplomats under the Vienna Convention.
It is understood not to want to set a precedent by treating an international body in the same way as a nation state.
As it stands, the ambassador would not have the chance to present his credentials to the Queen like other diplomatic heads of mission.
The British decision is in marked contrast to 142 other countries around the world where the EU has delegations and where its ambassadors are all granted the same status as diplomats representing sovereign nations.
Parcel firms demanding payment before delivering items ordered from European websites since Brexit
British shoppers who bought items from European websites are facing post-Brexit demands of more than £100 in import duties that must be paid before parcel firms will deliver the items.
Despite claims by Boris Johnson that there would be tariff-free trade after the Brexit transition period ended on 31 December, consumers who bought items from EU websites are being chased for import duties, VAT and admin fees – which, they say, render the purchase uneconomic.
Since 1 January, people buying goods from the EU – and vice versa – have faced import charges. The new rules have put thousands of specialist online businesses at risk as consumers on both sides of the Channel balk at having to pay the hefty import fees.
The UK government says European companies supplying goods valued at up to £135 direct to British buyers are supposed to collect VAT at the item’s prevailing rate – in most cases 20% – at the point of purchase. The move was branded “ludicrous” by Assen-based Dutch Bike Bits, which is among the firms that has halted all sales to the UK.
Online marketplaces such as Amazon collect the VAT on the retailer’s behalf and the item from Europe can be sent as before. However, UK consumers who have ordered items direct have been hit by the charges.
One of the problems consumers face is working out what duties are due, because the rate depends on the type of goods and their source.
A HMRC spokesperson said: “The value of the import VAT is calculated based on the value of the goods for customs purposes plus any customs duty, therefore it may appear to be higher than 20% of the original sales price.”
Britain has ambassadors to any number of international organisations from the OECD to the World Trade Organization, and expects them to have full diplomatic status – not paying local taxes, the CD number plate, and other assorted rights. The UK insists its head of delegation to the World Bank and the IMF also have ambassadorial status.
Our man in Brussels, Sir Tim Barrow, was previously UK ambassador in Moscow, and he is unlikely to take kindly to having his own status downgraded, which is the obvious reciprocal action the EU can take if No 10 – or is it Dominic Raab? – insists on this childish, petulant decision to refuse the normal diplomatic status that 142 countries around the world grant to EU delegations.
In 2018, the Trump administration did something similar, at time when the US president was denouncing the EU as a “foe”. A year later the decision was reversed, perhaps Trump’s then ambassador to the EU, former hotelier Gordon Sondland, was concerned he would have lost all his rights and privileges in exchange.
A leader of the Brexit movement and newly appointed government trade adviser in the United Kingdom is now the head of a conservative think tank in the American South.
Douglas Carswell 49, started working this month as the new CEO and president of Mississippi Center for Public Policy.
Carswell, a libertarian and former member of Britain’s governing Conservative Party, was a member of Parliament for 12 years and a co-founder of Vote Leave the campaign that pushed the Brexit referendum in 2016.
I’m Douglas Carswell, and this week I join the Mississippi Center for Public Policy as the new President & CEO.
After twelve years as a Member of the British Parliament, and co-founder of Vote Leave, the official campaign that won the Brexit referendum, I am so thrilled to be here in Mississippi, helping make the case for freedom.
Exporters advised by Department for International Trade officials to form EU-based companies to circumvent border issues
Brexit nightmare: British businesses at breaking point
British businesses that export to the continent are being encouraged by government trade advisers to set up separate companies inside the EU in order to get around extra charges, paperwork and taxes resulting from Brexit, the Observer can reveal.
In an extraordinary twist to the Brexit saga, UK small businesses are being told by advisers working for the Department for International Trade (DIT) that the best way to circumvent border issues and VAT problems that have been piling up since 1 January is to register new firms within the EU single market, from where they can distribute their goods far more freely.
The heads of two UK businesses that have been beset by Brexit-related problems have told the Observer that, following advice from experts at the Department for International Trade, they have already decided to register new companies in the EU in the next few weeks, and they knew of many others in similar positions. Other companies have also said they too were advised by government officials to register operations in the EU but had not yet made decisions.
Andrew Moss, who runs Horizon Retail Marketing Solutions, based in Ely, Cambridgeshire, and selling packaging and point-of-sale marketing displays in the UK and to EU customers, is registering a European company Horizon Europe in the Netherlands in the next few weeks, on the advice of a senior government adviser.
This will mean laying off a small number of staff here and taking on people in the Netherlands.
Referring to discussions with a senior DIT adviser on trade, Moss said: “This guy talked complete sense. What I said to him was, have I got another choice [other than to set up a company abroad]? He confirmed that he couldn’t see another way. He told me that what I was thinking of doing was the right thing, that he could see no other option. He did not see this as a teething problem. He said he had to be careful what he said, but he was very clear.”
Moss said it was now clear that Brexit was not about winning back control from the EU but investing in it to survive.
Geoffrey Betts, managing director of Stewart Superior Ltd, a company in Marlow, Bucks, which sells office supplies to UK and continental customers, said he had also decided to set up a company in the Netherlands for the same reasons.
He had also spoken to an official at the Department for International Trade before making his decision and received the same advice. “When the government said it had secured free trade, it was obvious it was nothing of the sort,” said Betts. VAT issues, new charges on moving goods and more bureaucracy all added up to an “administrative nightmare”, he said.
By moving operations into the EU and shipping out large consignments from the UK to their new European operations, the businesses can not only avoid cross-border delays and costs on every single small consignment they send, but can also defuse VAT problems that are currently hitting them and their European customers hard.
The Department for International Trade was approached for comment but did not respond.
Yesterday, as the impact of leaving the single market and customs union on 1 January became ever more clear, the Financial Times reported that the cost of a £12 bottle of wine in UK shops could rise by up to £1.50 a bottle because of the extra bureaucracy and charges affecting imports.
n a further blow to the government’s idea of “global Britain” after Brexit, the chances of signing a swift UK/US trade deal also appeared to be ebbing away after President Joe Biden’s nominee for Treasury Secretary, Janet Yellen, made clear the president had other more pressing domestic economic priorities than international trade deals.
Rachel Reeves, shadow chancellor of the Duchy of Lancaster and shadow minister for the Cabinet Office, said: “Once again we see this government’s sheer incompetence and lack of planning holding British businesses back and slowing our economic recovery.
“They’ve got to get a grip on this now and stop leaving our businesses out in the cold.”
Big slump in UK export deliveries, says haulage chief
The Road Haulage Association has revealed the extent of Britain’s post-Brexit export slump, with almost half of all trucks bringing goods into Britain are heading back to Europe empty.
“There is not normal demand from exporters, which means around 40 per cent [of hauliers] are returning to the continent empty,” said chief executive Richard Burnett.
He said many companies are still putting off resuming exports to the EU because of complications over new customs regulations. And drivers are reluctant to make as many trips because of the extra red tape, according to Burnett.
Downing Street has been warned by Brussels that downgrading the status of the EU’s ambassador to the UK will poison diplomatic relations for years to come.
The UK has so far declined to grant the bloc’s representative, João Vale de Almeida, and his 25-strong mission the privileges and immunities afforded to diplomats under the Vienna convention.
The British government’s approach has stirred anger in Brussels as the EU has 143 delegations around the world, each of which has full diplomatic status.
Speaking after a meeting of foreign ministers for the 27 member states, Josep Borrell, a former Spanish minister who is the EU’s high representative for foreign affairs, said there was “clear view” in the capitals at the apparent snub.
“It’s not a friendly signal,” he said, “the first one that the United Kingdom has sent to us immediately after leaving the European Union. If things continue like this there are no good prospects.”
The Foreign Office’s opening position with the EU is that it does not want to set a precedent by treating an international body in the same way as a nation state.
Other international organisations would then apply, it is argued, leading to a proliferation of others seeking diplomatic status.
It is claimed the lower status the government is willing to grant the EU’s delegation would not impact on the ability of their staff to carry out their job with only an audience with the Queen being the major difference.
The protection offered by the UK includes embassy property and documents being inviolable, and some staff being exempt from taxes. No delegation staff can be prosecuted for acts committed in the course of their diplomatic duties and the head of the mission’s residential home is inviolable. They are not required to pay any taxes or open personal baggage at airports.
But Borrell warned that the attitude in London was “unacceptable”.
The British approach follows a pattern of behaviour exhibited during the trade and security negotiations over the last year. The UK’s chief negotiator, David Frost, irritated his counterpart, Michel Barnier, by repeatedly referring to the EU as “your organisation”.
The UK also declined to open negotiations on foreign policy coordination during the talks, preferring to focus on bilateral arrangements with key member states.
The issue of the EU delegation’s status remains under consideration in Whitehall, however, with no final decision yet made. The EU had leaked a letter from Borrell complaining about the failure to grant full status on the day that the appointment of the UK’s head of mission to the EU, Lindsay Croisdale-Appleby, was announced, in an attempt to pile pressure on the government to give way.
Should the UK continue to reject the EU’s appeal for full status, there is a risk that Croisdale-Appleby’s status could be downgraded although it is more likely that the issue will be settled in the coming weeks.
EU citizens offered financial incentives to leave UK
EU citizens are being offered financial incentives to leave the UK, the Guardian has learned, months before the deadline to apply for settled status has passed.
From 1 January EU citizens have quietly been added to the government’s voluntary returns scheme where financial support is offered as an encouragement to return to their country of origin.
Payments can include flights and up to £2,000 resettlement money. The scheme is designed to help some migrants in the UK to leave voluntarily.
People working to help vulnerable EU citizens in the UK said the offer of money to return home contradicted the government’s claim that is was doing everything it could to encourage people to register for settled status. The deadline for Europeans living in the UK to apply for the EU settlement scheme (EUSS) is 30 June.