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Not so long ago this newsletter was renamed “Britain after Brexit” to give it a forward-looking tilt as we documented the UK’s transition to life outside the EU single market, albeit under the unforeseen and obfuscating cloud of the Covid-19 pandemic.

This week, as the Omicron threat fades, there has been a stack of cloud-clearing activity from the government as it tries to refocus its mission with the publication of the “Levelling Up” white paper and a 100-page document, “The Benefits of Brexit”, that sets out the advantages of leaving the EU.

But while the prime minister crows from the despatch box about the UK having the highest growth rate in the G7 (it depends on how you slice the cake) and the trade deals from Brexit (mostly rollovers), the news from the business frontline is altogether gloomier.

As the CBI boss Tony Danker said in a tough speech today, measuring the UK’s long-term prospects by the speed of the post-Covid bounceback — the upside of a V-shaped recovery — is kidding ourselves.

Once the Covid rebound is complete, the Office for Budget Responsibility forecasts annual growth of 1.3 to 1.7 per cent, which, as Danker notes, is not a good number for a country used to growing at 2 to 2.5 per cent. Those numbers, he contends, are a “much-needed dose of reality”.

There are other inescapable Brexit realities. As the British Chambers of Commerce noted this week, the border frictions that the UK has imposed upon itself with its largest trading partner are creating a persistent drag on trade. This was visible most recently in the long queues at Dover caused, in part, by differing interpretations of how to sign export health certificates.

As William Bain, the BCC’s Brexit lead, says: “No one is expecting goods to flow as freely across the channel now as they did prior to Brexit. But the way the trade agreement is being interpreted in 27 different EU countries is a major headache for UK business.”

Britain after Brexit last month went over some of the short-term fixes — on VAT, conformity assessment, mobility provisions and simplifying paperwork for exported food products — but these measures, while important for exporters, are tinkering around the edges of the more fundamental challenge posed by Brexit.

That challenge is how to keep the UK’s economy competitive and attractive to investors when it no longer occupies the role as a gateway to the 450mn consumers in the advanced economies on the UK’s doorstep.

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Danker does not pull his punches and has some new ideas to try and stimulate growth in the economy, including a permanent “investment deduction” following the expiry of the temporary super-deduction in order that business investment is rewarded by lower tax bills. Investment needs to be sustained, not just hurried forward to catch a tax break.

Next, the skills shortage. One of the biggest barriers to investing after Brexit, aside from complexifying supply chains with the EU, is a lack of skilled labour to service those new investments, which has been partly exacerbated by the ending of free movement with the EU.

That is a political decision that Danker and the industry accept. It will mean training more homegrown talent in the future, but the government has to face the fact — which thus far, it has not — that this will not happen overnight.

Consumers might have felt the shortages of last year in the form of the mild inconvenience of sparsely stacked supermarket shelves, but for businesses — from hospitality to logistics and meat processing — the shortages were acute.

Business did raise the alarm with the government early in 2021. Industry groups suggested ideas such as the “Covid recovery visa” — you can call it whatever you like to sugar the political pill.

But as Danker points out, the government simply said “tough luck”, and engaged in a “pointless quarrel” with business while ignoring the “obvious evidence” that the UK could not train enough new people in time.

Danker asks: “Shall we get serious now about how we can generate more of the skills we need at home — so we can rely less on immigration?” 

The CBI’s idea is an independent skills council that would set the shortage occupation list, according to need, as part of managing the transition to the world after free movement.

The keyword here is “serious”, because a lack of seriousness is the charge that business, often in private, most frequently lays at the door of Number 10.

Underlying Danker’s speech is a thinly veiled demand that this needs to change, and Brexit can provide the springboard for this, even if it is only as a result of needing to respond to the pressures caused by erecting barriers that make it harder to compete in the economic neighbourhood.

That will also entail creating what Danker calls “the most future-focused regulatory environment in the world” so that the UK’s domestic economy really is competitive against global benchmarks, and attracts investment and innovation.

That is not an impossible dream, though to read large parts of the Benefits of Brexit paper you could be forgiven for wondering if this government has the capacity to be sufficiently serious to make it happen.

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The document, widely mocked in Whitehall and business circles, is at risk of looking like a desperately trivial piece of work, harping on about crown stamps on pint pots and the delivery of blue passports.

The notion, for example, that “digitising export health certificates” is a “benefit” of trussing up the country’s exporters in extra paperwork is plainly absurd. As if applying a Band-Aid is a “benefit” of cutting oneself — unless you happen to work in the sticking plaster industry.

It might seem churlish to focus on the political chaff thrown up by such exercises, but if the government wants business and the public to take the Brexit project seriously, it is frustrating that it has produced a document that, in so many ways, deeply trivialises it.

Because there is some serious thinking going on. As Britain After Brexit explored last year there is a potential long-term regulatory dividend from Brexit for the UK economy, based around a fundamental rethinking of the way UK regulators work.

Those conversations are taking place. As the paper says — see page 21 — the goal must be better regulations, “co-created with businesses” to set rules that are “outcomes-focused and proportionate with the clear objective of delivering growth and innovation”.

These are important ideas that, along with investment in skills, will be tough to turn into reality and must form part of the long road to reversing more than a decade of stagnation in UK productivity since the financial crisis.

There are no quick fixes. But as Danker says, the first step is that the government needs to “get serious”.

Are you a business owner? Do you think the government can do more to help Britain benefit from Brexit? Let me know your thoughts by emailing [email protected]. You can also follow me on Twitter.

Brexit in numbers

The government’s inflexibility on immigration issues — driven, understandably, by political sentiment against EU free movement that helped to drive the Brexit vote — had hit not just industries reliant on EU butchers and lorry drivers.

As Britain After Brexit reported last year, a move to ban EU national ID cards, even biometric ones, as acceptable for entry to the UK has hit the school trip industry hard, because children and non-EU citizens often relied on the cards for group travel.

When the UK was a member of the bloc, the EU’s “List of Travellers” scheme enabled non-EU children to travel with their group without a visa along sideand EU children who only held ID cards. But the UK dropped out of that scheme when it left the EU.

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The point here is that when folk voted for Brexit, and for change, did they really vote to make it so much harder for French or Dutch or Italian children from coming to the UK on school trips, providing valuable cultural exchanges and £100mn in income to the tourism industry?

The educational travel industry has conducted some research with Deltapoll that suggests not.

Asked if it was right for the UK to refuse to accept EU identity cards, about two-thirds of respondents said Yes.

But as the chart above shows, when they were asked if they would approve of the UK government exempting under-18s on a school trip to the UK from having to produce an EU passport, the proportions “for” and “against” almost reversed.

Emma English, the executive director of the British Educational Travel Association, argues that such polling should reassure the government that, politically, it could create a youth group travel scheme to facilitate school trips without causing a backlash.

“With any doubts about public opinion removed, the government can go ahead and rescue tourism organisations — 40 per cent of which believe they may fail this year, with that figure rising to 75 per cent for educational tourism organisations,” she said.

This seems like a totally unnecessary problem. Time to fix it?

And, finally, three unmissable Brexit stories

Northern Ireland’s first minister Paul Givan is poised to tender his resignation today as the dispute over checks on goods entering the region from Great Britain under post-Brexit rules intensifies. My colleagues Jude Webber and Andy Bounds are following this developing story.

Bookmakers still expect Boris Johnson to depart Number 10 this year, so Simon Kuper believes it is time to write the prime minister’s political obituary. “Johnson’s premiership has been largely spent sabotaging his own ‘oven-ready’ Brexit agreement with the EU and mismanaging Covid-19,” he writes.

In pushing for and eventually securing Brexit, Nigel Farage was more John the Baptist than messiah, argues a new biography on the former Ukip leader. In One Party After Another, Michael Crick, the former Channel 4 political correspondent, portrays a key figure in the battle to exit the EU but one who is mostly on the sidelines, writes Robert Shrimsley in this review.

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