Daily Archives: August 27, 2022

Liz Truss may trigger article 16 proceedings against the European Union within days of becoming prime minister, as a legal war with Brussels looms over the Northern Ireland protocol.

The foreign secretary and Tory leadership frontrunner is understood to have received fresh advice from trade and legal experts about invoking the emergency clause contained in the post-Brexit deal.

It has long been threatened by Truss, but there is renewed interest as the deadline approaches for the UK to respond to legal proceedings launched against it by the EU for failing to implement proper Irish Sea border checks.

The deadline for doing so is 15 September 10 days after the next prime minister will be announced.

With a lengthy parliamentary battle expected over the Northern Ireland protocol bill, a senior Truss ally quoted in the Financial Times described the triggering of article 16 as a stopgap until the legislation is passed.

Though the source said Truss would prefer a negotiated solution with Brussels, triggering article 16 remained an option as long as the talks remained deadlocked.

Trusss antipathy towards the protocol has grown in recent days, after British steel producers were told they would have to pay a 25% tariff to sell some construction products into Northern Ireland.

Triggering article 16 would allow either side to take unilateral action if they believed the protocol was causing serious economic, societal or environmental difficulties that are liable to persist, or diversion of trade.

Serious difficulties are not defined, giving both sides room for interpretation.

The UK government has long said triggering article 16 remains an option, and some will view renewed discussion of the possibility as sabre-rattling designed to please the ardent Brexit-supporting Tory party members who will choose the next prime minister.

Over the past year, Truss has studiously lobbied Tory MPs believed to have concerns about her plans, in an attempt to avoid a return of the divisions that plagued the Conservatives from 2016 to 2019.

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Sources said the foreign secretary wanted the government to appear united, or else Brussels would believe its threats were empty because Conservative backbenchers could torpedo the most controversial elements of the Northern Ireland protocol bill.

John Finucane, the Sinn Fin MP for North Belfast, said reckless threats to trigger article 16 were evidence of the UK governments total disregard for the democratic wishes of people and businesses here.

He said the protocol was supported by most people, companies and elected politicians in the Northern Irish assembly, but the Conservatives had tried fiercely to undermine it. Finucane urged Truss to get back to the table with the EU to give certainty and stability to our businesses.

Earlier this month, the UK triggered its own dispute proceedings with the EU, accusing it of breaching the Brexit treaty by freezing it out of scientific research programmes following the row over Northern Ireland.

Truss said there had been a clear breach of the trade and cooperation agreement, with her department writing to Brussels requesting formal dispute talks.

The UK government claimed the EU was causing serious damage to research and development in both the UK and EU member states, with Britain frozen out of the science research programme Horizon; Copernicus, the Earth observation programme, which provides data on climate change; Euratom, the nuclear research programme; and space surveillance and tracking.

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Liz Truss may trigger article 16 days after becoming PM, amid Brexit row - The Guardian

The impact of both Brexit and the pandemic has led to adapted routes to market and speculation that British drinkers palates are changing.

Brewers and independent retailers from across the industry revealed to the drinks business how Brexit effectively reduced volumes of beer intended for export, leaving more highly-hopped beers than usual on our shores. Additionally, the pandemic forced a direct-to-consumer route to market for breweries that needed to sell their beer for their businesses to survive, however, such beers which would have initially been sold through the independent off-trade are now selling via their own online shops with many undercutting former retailers in terms of price.

Cloudwater Brew Co CEO and founder Paul Jones told db: Brexit had made exports quite difficult and not really in the sense that it couldnt be done, but it just took a lot longer, and it was more expensive plus, there was the notion that the landscape of where beer went was changing and this influx was leading to heightened competition. As Jones identified: In my estimation, many of the top 100 craft breweries in the UK sent around 20% of their output to export markets prior to Brexit. Adapting rapidly to find domestic outlets for all that production volume, once the admin and logistic issues hit [it] caused quite a spike in competition within the industry. Jones observed how, as a result, there has never been as much fresh and hoppy UK-made beer available to this market, and that might well change the tastes of drinkers.

Exeter-based Powderkeg Brewery founder Jess Magill admitted: The pandemic did stick us with a load of stock and no customers open to sell it to. I would say we operate much more on the JIT model now a business our size cant afford to overproduce. But equally we never want our products to be unavailable or we lose customers. So its an eternal tightrope.

Similarly, McColls Brewery in County Durham saw that, almost overnight, the entire business model changed and with it there was a margin-boost along with the shift. McColls owner and director Danny McColl revealed how pre-pandemic we were 90% cask-focused, he explained, but somehow, fortuitously, we had just moved into can production and built a webshop in winter 2019, and without this being fully-functional on the day the news broke back in March 2020 we would definitely not be here now. It brought in immediate cash overnight as sales disappeared from trade, and skyrocketed online, obviously at a fairly better margin.

According to London-based independent retailer Hop Burns & Black, retailers understand that brewers did what they needed to do, but there is a limit to how much support a retailer will give to brewers that repay their loyalty by undercutting them now.

Hop Burns & Black co-founder Jen Ferguson said: Indie retailers now operate in a completely different environment to before the pandemic. An already very competitive landscape has been made even more challenging with more and more breweries selling direct to consumers. However I think most retailers are fairly pragmatic about it. We recognise the extreme challenges of todays market businesses have had to pivot and adapt in order to survive. For many breweries, especially during the first lockdowns, going direct-to-consumer was a much needed lifeline.

Ferguson pointed out: It would be unreasonable to ask breweries to stop selling direct, but hugely undercutting your retail partners in the process seems like a zero sum game and said that, unfortunately, while some breweries take care to ensure theyre not sabotaging retailers, others dont weve even seen examples where breweries are selling their beers cheaper on their web shops than we can buy wholesale from them. This makes indies look unnecessarily expensive customers will go elsewhere if they feel theyre being ripped off so retailers may choose to stop stocking that brewerys beers. It also creates a race to the bottom on pricing in which nobody wins and added: The breweries we have most respect for are those that recognise the importance of the wider ecosystem and the part we all play in it. Indies remain a vital route to market for any brewery, providing convenience, selection and importantly the personal service you dont get at a supermarket or web shop, championing breweries, introducing them to new fans, helping create the next craft beer superstars. The next 12 months are going to be some of the rockiest on record and we all need to pull together to make it through to the other side.

Making it out of the other side will mean, for many, adapting and staying as flexible as possible while other issues such as inflation become the next new challenges. After all, the craft beer revolution flourished when there was much less to worry about and every reason for would-be brewery founders to follow their dreams and remove themselves from the rat-race. But now, facing so many hurdles, the new race was beginning to feel more like a marathon.

Jones identified how a number of things have changed, specifically within craft beer within the UK and reiterated that it is really pertinent to talk about it all because pre-pandemic, the craft sector in the UK was definitely growing and felt very, very buoyant and comfortable growing either through organic means or through investment. There were loads of breweries that had taken on significant investment to grow several times their previous annual output in a short space of time and that felt entirely cool. But, sadly, the pandemic compounded a problem that we were all starting to face. He observed: We are living through slightly different times in terms of what people want and what people need. and inferred that the shape of the craft beer scene is changing as a result of all of the hurdles and ultimately, these struggles are absorbing rather a lot of the excitement that craft had initially brought to the nation.

The pandemic has changed everything. I think that some of the frivolity has been replaced by some of the complexities within the scene, he said, hinting that now, all the industry needs is to find new ways to invoke some of its verve and optimism so it can navigate towards a brighter future.

Perhaps a future where the over-saturation of beers made with dank zesty alpha hops will lead palates to seek out post-craft rebellious brews with a maltier backbone .

The rest is here:

How Brexit and Covid-19 changed the craft beer industry for good - The Drinks Business

MANY of the key issues that will dominate theindependencedebate as it builds over the next year and which will determine its outcome are already clear and were confirmed by the Ipsos Scotland poll this week.

As this newspaper reported, distrust of Westminster and a feeling that Scotlands trajectory in politics and society is different from that south of the Border are strong motivators for a Yes vote, while economic scaremongering and the best of both worlds fallacy still work in the opposite direction, though their influence is diminishing. Brexit continues to be a major concern, and an earlier poll indicated that support for remaining in the EU is now at 72%, a full 10 points ahead of where it was in the 2016 referendum.

Yet I still occasionally hear some people in the Yes movement say that focusing on Brexit is a distraction. Some even contend Scotland should accept what has happened and, as we become independent, seek a substitute for EU membership, such as association with the European Free Trade Association (Efta).

For my part, the importance of Brexit within the national debate is not diminishing but growing. Brexit isnt simply a choice voters in England and Wales made against our and their interests, admittedly nor is it something that can be made to work or done better. In fact, the Tory leadership contest has revealed it to be a fatal poison an obsession which is killing democracy.

READ MORE:Barrhead business loses out on 50k in EU funding due to Brexit

I am sorry to return to the Tory leadership contest again. It is an ever-more-revolting spectacle, and the sight and sound of Liz Truss on the issue of nuclear weapons was particularly horrific. She had clearly rehearsed the question, and it speaks volumes that instead of prefacing her inevitable hardline answer with a touch of humanity and a recognition of the awful nature of the subject, she not only robotically repeated: Im ready to do it she did so to the whoops and cheers of her Tory audience.

Contrast that with a published piece the day after by New Zealands Prime Minister Jacinda Ardern pointing to the impasse that seems to have gripped the nuclear non-proliferation treaty renewal talks in New York and quoting John F Kennedys plea to abolish these weapons before they abolish us.

Such an unpleasant glimpse of the current Tory party reveals the effect of the Brexit poison as does Lord Frosts preposterous, bizarre and utterly unworkable proposals to abolish democracy and devolution in Scotland. He, almost unbelievably, echoed the language of Lord Carson a century ago, who argued that Irish Home Rule of any sort could not be permitted because it would leave behind Unionists.

His comments also brought right-wing raving previously only encountered in the far reaches of Ukip and the BNP into the political mainstream and permitted prejudice against difference whether that be European or Scottish to be openly flaunted as was done on Thursday by the appalling Amanda Platell on a licensed TV channel, an intervention that should have brought immediate action from the broadcasting regulator.

EMILY Maitlis further confirmed the corrosive effect of Brexit in her Edinburgh TV Festival lecture because Tory hijacking of editorial control in the BBC took place to secure Brexit and then to ensure the details of the ensuing disaster was never revealed.

Of course, the rehearsal for such perversion of fact and argument was BBC coverage of our first independence referendum in 2014, something that should give Maitlis and her colleagues food for thought. Perhaps they might resolve not to allow it to happen again.

Doing some research a few days ago, I found myself counting the number of people appointed to Theresa Mays first Cabinet in mid-July 2016 who were still there just before Johnsons final meltdown.

The figure is telling, for it shows how completely the Tory party has changed, and how being stridently, fervently and obsessively in favour of Brexit has become the sole determinant for progress into government a fact which deepens the gulf between the politics of Scotland and England.

The figure, including Johnson himself, is five out of 27. The other four are Baroness Evans, the Leader of the Lords; Priti Patel; Sajid Javid; and, of course, Truss all of whom have willingly ridden the Brexit tiger.

An examination of the list of 357 Conservative MPs with the whip presently in the House of Commons tells the same story supporting Brexit is virtually the only way to get elected, just as going on supporting ever-harder versions of it is the only route to promotion. Amazingly Labour and the LibDems have drunk the Brexit Kool-Aid too.

Yet Brexit is clearly an unmitigated disaster, and there can be no doubt it is the major factor in making the general global challenges arising out of the war in Ukraine and Covid so much worse in the UK.

Some are now arguing that Truss is the last hope to secure what Brexiteers regard as a true Brexit.

READ MORE:'Completely stupid': Scottish bike firm reveals how Brexit has hit business

But that isnt true because if she turns out to be a traitor to the cause, as Johnson was increasingly seen, then the Brexit revolution will overturn its latest leader and seek someone even more fanatical.

The Brexit poison will continue to spread through the system, with ever-more disastrous results.

In 18th-century France, the terror was their answer to the failures of extremism. In 20th-century Russia, vast and bloody purges were meant to keep the system pure. In 21st-century England, the remedy is different but the principle is the same. Democracy, prosperity and perhaps even peace can and will be sacrificed for the sake of the Brexit revolution.

The price will be very high, and we must not be among those that are forced to pay it. That is why telling Scotland the truth about Brexit and what it is leading to remains for me at least the key argument in making sure we arent.

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Brexits place in Scottish independence debate is only increasing - The National

That comes on top of the 6.7 million applications by EU citizens already in the UK who have applied for settled status, of which 6.5 million have been concluded, according to Thursday's data.

It is not surprising that John Hayes, a former Home Office minister and the chairman of the Tory Common Sense group, believes the next prime minister - Liz Truss or Rishi Sunak - must prioritise clamping down on both legal and illegal migration before the next election.

I would like to see all of these figures drastically reduced. That is what my constituents expected when we voted to take back control. It isnt just about borders but migration was a critical element of that. By the next election, we must do so, he said.

So how did Mr Johnsons pledge to take back control result in the highest number of visas being issued since 2005, when modern records began, and potentially the largest number since the Second World War?

Unlike his predecessor Theresa May, the Prime Minister scrapped targets designed to keep net migration below 100,000 a year and instead adopted a significantly more liberalised approach to post-Brexit immigration.

While tough on illegal migration - as illustrated by plans to send Channel migrants on a one-way ticket to Rwanda - he has relaxed rules for foreign skilled migrants and students with sponsored jobs or university places in the UK.

The number of work visas has nearly doubled in a year, from 170,500 to 331,000 and is up 79 per cent on pre-pandemic levels. One factor is that migrant EU workers now require visas with the end of free movement, but they only account for 10 per cent of the total.

Instead, the rise has been largely fuelled by non-EU migrants seeking employment in the UK, led by India (up from 45,600 to 111,000 in a year), Philippines (doubling to 21,900) and Nigeria (doubling to 17,500).

The implementation of a points-based immigration system has opened up half of all jobs in the UK to foreign workers, by lowering salary and skill thresholds for migrants. Previously, employers also had to prove a British worker could not be recruited to fill a vacancy before looking abroad.

The rest is here:

Brexit promised to 'take back control'. Now foreign nationals are arriving in their droves - The Telegraph

Former UK Cabinet Minister Michael Gove (R) at Athens International Airport, Greece, August 2022

Published in partnership with the Centre for Brexit Studies:

I think the people in this country have had enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrong. Michael Gove, June 2016

It is more than 2 1/2 years since the UK formally departed, with Prime Minister Boris Johnson proclaiming the dawn of a new era. More than six months since Jacob Rees-Mogg was anointed Minister of Brexit Opportunities.

So how have the predictions of the Remoaners and Project Fear fared?

By 2020, GDP would be over 3% smaller than otherwise (with continued EU membership), equivalent to a cost per household of 2200.By 2030, in a central scenario GDP would be over 5% lower than otherwise with the cost of BrexiT equivalent to 3200 per household. OECD Economic Policy Paper, April 2016

UK GDP is estimated to have fallen by 0.1% in Quarter 2 (Apr to June) 2022 UK Government, August 12, 2022

The MPC [Bank of Englands Monetary Policy Committee] now projects that the UK will enter recession from the fourth quarter of 2022, and that the recession will last five quarters as real household post-tax income falls sharply in 2022 and 2023 and consumption begins to contract. CNBC, August 4, 2022

The UK [will] be faced with a noxious cocktail of depressed business confidence; tightening financial conditions; higher inflation; falling real wages; and monetary policy tightening to offset that higher inflation. Neville Hill, Credit Suisse, January 2016

The Office for National Statistics said the consumer prices index rose by 10.1% in the year to July, up from a reading of 9.4% in June and entering double figures at an earlier stage than anticipated. The figure was last higher in February 1982. The Guardian, 17 August 2022

Inflation is expected to risefrom 9.4% in June to just over 13% in 2022 Q4, and to remain at very elevated levels throughout much of 2023. Bank of England, August 3, 2022

The NIESR [National Institute of Economic and Social Research] analysis suggests that leaving the EU and instead establishing a free-trade agreement with the rest of the bloc, similar to the arrangement that Switzerland has could reduce wages in the UK by around 3.1 per cent to 3.8 per cent in real terms within 15 years.

The effects would be far worse if the UK needed to fall back on a WTO trading relationship. In that case, they put the hit to real wages at 4.6 per cent to 6.3 per cent by 2030. Financial Times, 10 May 2016

The real value of UK wages has fallen at a record rate and remains below 2008 levels, according to data published by the Office for National Statistics.

During the aftermath of the 2008 financial crisis, real-pay growth for UK workers the difference between earnings and inflation fell to a low of -2.7 per cent in September 2011. But the latest figures from the ONS suggest that the current economic crisis has broken that record, with wage growth falling by approximately 3 per cent between October 2021 and June 2022. New Statesman, 16 August 2022

Of course, Brexiteers and the Johnson Government are going to play global conditions as their Get Out of Hell Free card. Chancellor Nadim Zahawi sheltered in the anodyne statement on Wednesday, after the publication of the 40-year record for inflation, I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.

And of course, part of the reason for the economic deterioration has been a series of shocks from the Coronavirus pandemic to disruption of supply chains to Russias invasion of Ukraine.

But the fundamental is that Brexit, isolating the UK from the EU and its largest market, left Britain in a weakened position to deal with those shocks. As a result, the UK is out-performing every other developed country in its downward spiral.

Among the G7 countries (UK, US, Canada, France, Germany, Italy, Japan), only the UK is projected to have flat or negative growth in 2023.

The projected UK inflation rate for 2023 far exceeds that of its G7 compatriots. While the Bank of England expects the British rate to remain above. 10%, the US rise is expected to be 3% in 2023. Canadas is expected to be 2%.

Adam Posen, who set interest rates for the Bank of England and is now president of the Peterson Institute for International Economics, summarizes that 80% of the difference between inflation in the UK and other countries is due to Brexit.

Youve seen a huge drop in migrant labour, a disruption in labour markets that everybody experienced due to Covid and reopening, but with fundamentally less elasticity and [Brexit] has to be a major part of it.

Posen also notes that Brexit has reduced the openness of UK trade openness and cut inflows of foreign direct investment.

Vicky Pryce, a former head of the Government Economic Service and chief economic adviser at the Centre for Economics and Business Research, adds that a very substantial drop in the value of the poundimmediately inflated input costs after the Brexit referendum in 2016.

That also tends to discourage companies from investing, so you add to supply problems for the future, she explains.

Yes, we are bearing the soaring costs of Government mismanagement and deregulation of energy markets. Yes, the UK has long-standing issues with business investment and loose monetary policy.

But this is not an either-or. Brexit has interacted with other structural and tactical weaknesses to whip up the storm.

Meanwhile, as the Conservative Party is mired in the pillow fight over who succeeds Boris Johnson, Michael Gove has disappeared over the past month except when he was caught up in a lengthy queue at Athens International Airport on August 14.

Former Labour Party councillor Candida Jones spotted Gove as she was enduring a 30-hour delay of her return to the UK because of a lack of staff due to the pandemic compounded, in the case of the UK, by Brexit.

In a 15-minute discussion, Jones rebuffed Goves attempt to explain the supposed benefits of Brexit vaccine rollouts and agricultural reforms: You are a smart guy, and know what you are telling me is not true, and you have got to stop treating the British people as if were stupid.

Gove made no comment, including whether he blamed experts for the encounter.

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Yes, Mr. Gove, The Experts Were Right About Brexit - EA WorldView

Brexit Britain has signed a new deal with Ukraine to help rebuild the war town country.

n response to a specific request by PresidentVolodymyr Zelensky, Anne-Marie Trevelyan, the International Trade Secretary, met with Yuliia Svyrydenko, First Deputy Prime Minister andUkraines Minister of Economy of Ukraine, and Mykhailo Fedorov, Vice Prime Minister and Ukraines Minister of Digital Transformation, via video link to reiterate the UKs unwavering support forUkraineand begin talks.

The deal will make it easier for UK companies to work with Ukrainian businesses and support the country's economic recovery.

MsTrevelyan said: Putins brutal and unprovoked invasion of Ukraine has had devastating human consequences.

"The UK stands shoulder to shoulder with Ukraine and will use trade as a force for good to help the country rebuild its modern economy after this barbaric war.

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Brexit: Truss handed blueprint to solve illegal migration as record numbers hit UK - Express