New report lays bare the risks Brexit poses for Cornwall
It includes major hits to agriculture and fishing industries
A new report has revealed the risks that Cornwall faces as a result of Brexit included major hits to agriculture and fishing industries.
The document, written by Cornwall Council leader Julian German, is set to go before the Cornwall and Isles of Scilly Leadership Board when it meets on Friday (Dec11).
With the EU transition period set to end on December 31 the nine-page report sets out what the impact of changes could be and the risks they pose to Cornwall.
Cornwall Council has an EU transition working group which has been meeting fortnightly to assess the risks and what might need to be done to mitigate those risks.
On trade with the EU the report states:
“The changes to the way the UK trades with the EU will have an impact on Cornwall’s businesses and the wider economy. Cornwall’s trade with the EU is higher than the UK average, with 55% of Cornish exports going to the EU and 47% of its imports coming from the EU.
“This equates to a slight trade surplus with £364m in exports v £325m in imports. However, less businesses export to the EU (1,127), than those who import (1,832), with approximately 5% of Cornish businesses exporting to the EU.”
The report highlights that, at the time of writing, it is unclear whether there will be a trade deal in place by December 31 but says whatever happens there will have to be new processes for imports and exports.
There are also concerns about the impact on the wider economy with the Government forecasting that GDP will be 4% lower than if the UK remained in the EU.
The report states:
“Cornwall’s economy is particularly vulnerable to the impacts of the EU exit due to the average low wage, and importance of the tourism, food, fish and agriculture sectors. This could be compounded with the impact of COVID-19 which is likely to see a greater contraction than the 2010 financial crash.
“In order to mitigate this impact Cornwall Council have been working with partners to provide support for our different sectors and businesses and seeking assurances from government on a number of key areas.”
With Cornwall having received a large amount of EU funding due to its status as being one of the poorest areas in Europe there are also concerns about whether that funding will be replaced by the Government and how.
While the Prime Minister has promised that Cornwall will not miss out there have been few details about the replacement funding and how it will be administered.
Cornwall Council has submitted a bid to the Government for £700million of funding to be provided over the next 10 years to fill the gap left by the loss of EU funding.
The report states:
“The Government have previously pledged that the replacement UK Shared Prosperity Fund (SPF) would see no region worse off. However, there is a possibility that replacement funds could use different metrics which could see Northern/urban areas benefit over Cornwall. This presents a significant risk that the “no worse off” commitment may not be delivered as it relates to more than the value of the fund.
“The local devolution of decision making, simpler process, outcome delivery and a 10-year delivery period that Cornwall Council are calling for are also at risk.”
Concerns about the impact on seasonal labour and workforce are also highlighted in the report which states that the agriculture sector is dependent on seasonal workers.
It states that the brassica sector is worth £200m a year to Cornwall and the daffodil sector is worth £100m a year to Cornwall but less than 5% of those working in fields are UK residents.
The report says that it is still “urgently seeking” an extension to the Government’s seasonal agricultural workers scheme into 2021 and beyond and for it to cover non-food crops such as daffodils and bulbs.
It states:
“With non-food crop production (including daffodils) not covered by the current SAWS scheme, and the imminent closure of the SAWS pilot scheme at the end of December 2020, Cornish farming businesses are very concerned.
“It appears that seasonal labour is being caught up in Government policies relating to immigration rather than being treated separately. Due to the current immigration policy focusing on skills – defined as qualifications – field operatives are not considered for visas. The industry estimates 70,000 workers are needed nationally each year.”
The report adds:
“Cornwall Council have been raising this issue to the Treasury and Home Office and have been told that it is an issue that the Government have sight of and that options are under consideration. However, we have been advised that a ‘Pick for Britain’ campaign will be an important focus regardless of what is decided.”
And it continues:
“At a time when Cornwall and the UK are facing the unprecedented challenges that Covid-19 has had on our economy, the potential loss of these businesses would impact the national Exchequer as well as the local Cornish economy. Our daffodil industry alone contributes £20m a year of VAT.”
Turning to fisheries the report raises concerns about how export restrictions will impact live bivalve molluscs (LBM) and set to run from January to April.
It says that this would “significantly impact” the Fal Fishery and the export of mussels, oysters and queen scallops to the EU – the first sale value of queen scallops for the 2019/20 season was around £256,000.
The report states:
“If the anticipated restrictions stand, the fishery will cease to operate due to the complete loss of the market. The fishery currently supports 30 licence holders, a further 42 registered crew and ancillary businesses.
“This issue is due to a change in regulations which will mean that it will only be possible to export LBM to the EU that have come from A grade shellfish harvest areas or have been appropriately purified. As these products are deemed fit for direct human consumption and classified as a food product, they can be exported alongside an export health certificate.
"However, LMB from B grade shellfish harvest areas are considered live animal exports and cannot be exported without a Live Animal Health Certificate (LAHC) which is not due to be made available by the EU until April 2021.”
The report is set to go to the Cornwall and Isles of Scilly Leadership Board when it meets on Friday (Dec11). The board will be asked to review the risks and consider mitigation methods which could be implemented.
The board will also be asked to write an open letter to EU residents in Cornwall reminding them to apply for settled status by June 30, 2021 and that it continues to raise the need for the Seasonal Agricultural Workers Scheme to be extended and include non-food crops.