Blog: Brexit: Ian McConnell: Why does this Government build barriers to growth? | HeraldScotland – HeraldScotland

THE Johnson administration’s wilful throwing up of barriers to economic growth in Scotland and the rest of the UK, both in the immediate term and over a much-longer timeframe, becomes ever more demoralising as challenges mount.

There was much talk as the coronavirus pandemic took hold that it might, conveniently for the Conservative Government, mask the major negative effects of Brexit.

However, those inevitably huge effects have been plain for all to see, even amid the grim coronavirus crisis.

The chaos suffered by UK exporters, for example, has been crystal clear. And so too has the effect of what was for many Brexiters the whole dismal point of the Leave folly – clamping down on immigration from the European Union.

Of course, for years before the Brexit-obsessed Johnson administration was finally able to implement its long-planned clampdown on immigration from the EU from the start of 2021, the UK was already paying a heavy price for the foolish Leave vote of 2016.

In the wake of the Brexit vote, unsurprisingly given the alarming signals it sent, net immigration to the UK from the EU collapsed.

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And, of course, things have been exacerbated greatly by the replacement of free movement from EU countries to the UK with a points-based immigration system.

Paul Sheerin, chief executive of Scottish Engineering, sums up the huge and continuing problems visited upon his sector at the most difficult of times by Brexit in the industry body’s latest quarterly survey, published today. And he highlights the fact that a further challenge is about to be heaped on in the form of Brexit-enforced import checks due to begin at the start of next year.

Mr Sheerin writes: “If you are looking for the risks that raise concern, Brexit still lingers like a bad smell, a gift that not only keeps giving but never seems to go away either. In the crucial skills area, one-quarter of members have been impacted by the loss of EU nationals, and over 70 per cent honestly outline that they are not fully prepared for the scheduled implementation of Brexit-enforced import checks due to start from January 1st, 2022. That’s not surprising after the year-and-a-half of plate-spinning that industry has had to do just to stay alive, but it’s galling that this extra headache comes once again without support, and especially with zero benefit to industry in Scotland or indeed the UK.”

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The hurdles to doing business erected by the Johnson administration with its Brexit crusade are indeed galling.

The Conservatives have been forced to issue temporary visas to enable recruitment of heavy goods vehicle drivers, poultry workers and pork butchers from the EU. While such visas are hardly attractive propositions for many people in the EU, this move must have really stuck in the craw of the Johnson administration and shows the seriousness of the problem.

Of course, we have also been able to see the gravity of the troubles in huge supply-chain disruption in the UK, exacerbated by a shortage of lorry drivers which has been estimated by the Road Haulage Association at around 100,000.

The woe is, of course, much wider than this, as can be seen from Mr Sheerin’s observations. And the hospitality and care sectors have been thrown into further disarray by labour shortages.

The UK’s labour and skills shortages crisis has been highlighted in survey after survey.

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A report published this week by the Institute of Chartered Accountants in England and Wales shows the proportion of Scottish businesses reporting problems in hiring people for non-management roles is the highest since comparable records began in 2004.

This is particularly frustrating at a time when businesses are trying to maximise their part in the economic recovery, following the collapse in gross domestic product caused by the pandemic.

The ICAEW survey shows confidence among Scottish businesses about the economic prospects facing them over the next 12 months, compared with the preceding year, is also the highest since the professional body’s survey of members began in 2004.

It would be good if the UK Government even tried to create an environment to unleash this optimism, rather than constructing barriers to doing business.

Scottish Engineering flags the major problems being encountered by companies in the sector in finding staff. It says of its own survey findings: “Staffing intent remains positive…and once again we listen to member feedback of the challenge of actually filling the vacancies where they seek to hire additional roles. More than ever, this has proven difficult as all resources become increasingly scarce, and the impacts of Brexit – still far from done – are evident in staffing, logistics and concern that import checks scheduled for the new year may bring further headaches.”

The ICAEW survey shows Scottish businesses expect the fastest rise in their input costs for more than a decade. Transport problems for companies have risen dramatically. And the survey signals growing concern over the tax burden, following hikes announced by the UK Government.

Meanwhile, a column in The Herald this week by Colin McLean, managing director of Edinburgh-based SVM Asset Management, threw into stark relief the longer-term demographic challenges facing the UK and other countries.

Given these challenges, of which the ruling Conservatives should have been only too aware as they took us down the destructive Brexit path, the Tory stance on immigration truly beggars belief.

Mr McLean noted that, alongside the COP26 United Nations Climate Change Conference in Glasgow, the city hosted some expert gatherings of thought leaders.

He flagged his view that “one of the most challenging discussions was in the Longevity Forum”, adding: “The focus was on sustainability, but with some surprising evidence and conclusions. World population may not be on the upward trajectory built into current long-term planning.”

Mr McLean added: “In future more of the world may look like Japan. A study in the Lancet journal last year challenged existing UN population estimates. That is likely to mean a shrinking working-age population and labour shortages, possibly with countries competing for migrants to boost their populations.”

The Johnson administration might want to reflect on the degree to which it is impeding the Scottish and broader UK economies, and listen to Mr Sheerin.

And it might want to think about the longer-term picture painted by Mr McLean and where its policies will leave the UK in this context.

On past form, sadly, we can be pretty sure it will do neither.

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