The frustrations of the logistics industry are starting to boil over - principally because the government and Whitehall are NOT getting the dynamics of the marketplace.
Why, if govt is offering £50m quid in grants, everyone's not flocking to open a customs shop?! Well... /1
The problem, industry says, is that the Treasury and @michaelgove really don't understand what is happening on the ground - they really do see this customs business as a wonderful opportunity and can't understand why industry isn't flinging itself at it. /2
@michaelgove You'll recall this much lampooned tweet from @cabinetofficeuk about it's commitment to investing in the red tape sector...so as I was saying, why is industry warning of such a shortage of capacity? Well, having talked to a bunch of operators.../3
You've had a hell of year. You business contracted overnight with #COVID19. You had to furlough a bunch of people.
Just now, you're starting to get back on your feet. Making wage and loan payments etc. But Covid-II looms./4
@michaelgove@cabinetofficeuk You don't know how the 'second wave' is going to pan out and what it will mean for your business this winter.
Maybe the world will go back into some form of lockdown? Maybe not. But the point is your risk appetite is low.../5
@michaelgove@cabinetofficeuk So at this point WHY would Mr Bloggs risk his business, his house, his car etc in order to do the government's bidding and hire a huge number of new customs agents who a) won't be earning until Jan 1 b) can't be sure what work will be on.../6
@michaelgove@cabinetofficeuk Apparently @hmtreasury and government cannot fathom why industry can't sort this problem out of a lack of customs brokers...but you can see from above that the incentives of intermediary industry and government are NOT as aligned as you might assume /7
@michaelgove@cabinetofficeuk@hmtreasury Now take a look at what is actually on offer...not to be sniffed at, perhaps, but not (see above) enough to make you put your butt or your business on the line to save @BorisJohnson
blushes on Jan 1 /8
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson The incentives need to massive increase in order to move the market - and I've been hearing this from industry for MONTHS - literally since early this year.
They have been belly-aching about it, to no avail - and all the time, as the market tightens, prices are rising/9
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson And if you start phoning the list of accredited customs brokers on the @HMRCgovuk website (yes, I have) you start to encounter another problem....a lot of this new roll-on, roll-off work with the EU is new, it involves complex vet/SPS forms /10
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson@HMRCgovuk So several conversations I had saw brokers (who previously were sending non-agri/plant goods on long shipping routes to reset of world) were very wary of getting into ro-ro work with perishables where all sorts of bad sh*t can happen, with inexperienced staff & clients /11
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson@HMRCgovuk It's not that any of this stuff is impossible - as @RobHardyFR8 told the EU Exit select cmme last week - but over the last decades the skills and knowledge base have naturally atrophied on both sides of the Channel; and a lot of business is still in 'wait and see mode' /12
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson@HMRCgovuk@RobHardyFR8 You'll have heard about the need for "50,000" new customs agents, but the issue is that if you work on one experienced agents 'mentoring' three inexperienced ones - you still need the experienced ones. And they can't be magicked up overnight. /13
@michaelgove@cabinetofficeuk@hmtreasury@BorisJohnson@HMRCgovuk@RobHardyFR8 Industry says the government could help making even clearer that forwarders aren't legally liable for mistakes - but of course that still leaves traders trying to ensure they provide correct data for the forms, which is harder than you might think. /14
NEW: Gove’s top-down plan to build 150,000 houses in Cambridge by 2040 declared “nonsensical” by local council leaders because they don’t have water supply to build existing plan for 50,000 by that date! 🤯 But Gove keeps giving interviews promising it/1
“The 150,000 homes would appear to just be nonsensical, if I’m honest, because the infrastructure just isn’t there,” Mike Davey, @mikelode1 Labour leader of Cambridge City Council /2
@mikelode1 “We are a pro-growth council, but we’ve run out of water. So that leaves us with a lot of questions about how this can be delivered. Gove has to solve the water problem and the energy problem or it can’t be done,” Bridget Smith, LD leader of South Cambridgeshire @cllrbridget /3
First the gaslighting: his deal is a ‘reverse’ trade deal…it erects barriers, it doesn’t remove them. It’s only “broadest deal ever” if UK started from zero relations, rather than working down from Single Market membership. As he well knows, but I wonder about the readers.😬 /2
Second the one bit of truth. To get closer to EU and fix bits of his rubbish deal, the UK will become a big rule taker. That will be hard. What Frost omits to say is that’s a pure function of the hideous position his #Brexit deal has put the UK in. And no seat at the table. /3
🚨🚨when ministers aren’t bashing UK universities they love to boast about them. Rightly. But unless something changes on funding there will be a lot less to boast about in 10 years time. /1
As Simon Marginson Higher Education prof at Oxford University explains the UK is in danger of getting back to the funding crisis levels that sparked need for tuition fees…/2
These charts by @amy_borrett explain the basic problem. Triple whammy of inflation, #Brexit and risky over reliance on international students to x-subsidise undergrad teaching (previously used to make up research grant shortfalls). /3
What he's getting at is that #Brexit is not, as is still widely supposed, a one-off event that companies adjust to.
It's a permanent friction that makes UK companies a risker bet for your supply chain than an EU company. And that matters for maufacturing/2
That's because 50 per cent of UK exports are from manufacturing, and of those that go to EU, around 50 per cent feed into EU supply chains -- so they make bits of things that criss-cross Europe to become whole things that then get exported to rest of world. /3
This was interesting session. The 'chart wars' are a bit baffling if you're not an economist. I'm not. But I am a reporter. Gudgin argued #Brexit had no effect on the economy, but I don't know how that squares with all the conversations I've had with business in last 6 years/1
I get you can argue over the quantum of #brexit impact -- Springford model says -5.5% GDP, Portes reckons that fees too high, says thinks -2.5%...Jessop said -1%, but transitory...but "nothing" surely doesn't pass the sniff-test (to quote Gudgen on Springford's Doppelgangers /2
The empircal work by Jun Du at Warwick and Thomas Sampson at LSE on the numbers of traded lines/relationships, for example, can't amount to "nothing"; nor can UK parlous trade performance; even if non-differentiated impact on EU v RoW exports isn't yet explained/3
Graham Gudgin says that @JohnSpringford "doppelganger" method of analysing Brexit is a "statistical artefact" -- one that is used by Office of Budget Responsibility in their March 2023 forecast.
Gudgin concludes that Brexit has had no real impact on UK economy. And talk about Brexit masks real reason for productivity crunch. OBR, Bank of England, CER etc and BBC/FT that report these studies are distracting.
Now @JohnSpringford responds to criticisms of his doppelganger method. Says that its misleading to compare individual countries. The Doppelganger composite smooths out differences, which is why it makes better counterfactual.