November 9, 2020
It is now more than a year since Boris Johnson called the 2019 General Election where the Conservative Party returned to power on the message of ‘Get Brexit Done’. In the 12 months since, the public health and economic crises precipitated by COVID-19 have transformed our political landscape, but on Brexit, the reality of getting it ‘Done’ has made progress difficult.
For some months, both the UK and EU have appeared unwilling to compromise on key areas of disagreement.
Despite this log-jam, the deadliest pandemic since the 1968 Hong Kong flu and an economic recession without precedent in living memory, the Johnson government decided not to extend the transition period in June, and remained committed to leaving the Single Market and Customs Union on December 31.
With this deadline approaching, tension has risen and caused a collapse in trust between Michel Barnier and
Boris Johnson. On October 14, Barnier was told not to come to London unless he ‘fundamentally shifted his position’. Discussions continued over the phone, but time pressure and deteriorating relations have led us to a point where no-deal has never been more likely.
Posturing and swashbuckling is commonplace in political negotiations with both parties vigorously pursuing their interests, but it is not at the level of high politics that the results of no-deal will be felt. These will be borne by businesses and workers, perhaps more in the North East than anywhere.
Our region is particularly vulnerable to no-deal and an agreement is vital for future prosperity.
Since the referendum, the North East sent between 59 and 61 per cent of its exports into the EU, significantly more than the UK average of 48 per cent. Despite our region seeing a 40 per cent drop in export value in 2020 we remain reliant on EU trade, with 58 per cent of exports sent to the EU.
Huge quantities of North East imports are inputs for further manufacture or assembly, which are then re-exported in well-established international supply chains. All of this means that disturbances to trade between the UK and the EU, including tariffs, additional customs procedures or border delays will disproportionately hurt this region and risk thousands of jobs reliant on UK-EU trade.
As we approach December 31, not only do the risks of no-deal take a toll – every month without progress is further uncertainty limiting businesses’ ability to plan. A year on from Boris Johnson calling his triumphant General Election, Brexit still hasn’t been ‘Done’. The only way that it can be is through a UK-EU deal.
An agreement will give certainty, it will allow our traders to continue operating successfully, and it will be the first step in Britain planning its recovery as we emerge out of the COVID-19 crisis – whenever that may be.