Tuesday28 January 2020 ★ FINANCIAL TIMES 3
DANIEL THOMAS— SUNDERLAND
Even the name locals in Sunderland give
themselves suggests how they see their
place in the world: the mackems — or
make ‘ems — a nod to a proud manufac-
turing past that helped boost Britain’s
industrial expansion in the last century.
But it is the UK’s withdrawal from the
EU — now just four days away — that is
dominating conversation in the north-
eastern city. And for a local economy so
reliant on manufacturing and open
trade with the European bloc, some in
this strongly Leave-voting region are
nervous.
“It’s the beginning not the end,” said
Ryan Maughan, founder ofAvid Tech-
nologies, which makes parts for the
growing electric car market.
“In five years’ time we would have
500 staff in the north of England. [But]
it depends on where we get to [with] the
trade deal,” he added. “If we end up in a
position where we are tariffed going into
mainland Europe, that could change
thinking [about where staff are
placed].”
Others agree the Brexit landmark
does not end uncertainty. “What’s going
to happen afterwards? What is the
deal?” asked Ian Dormer, managing
director of Newcastle-basedRosh Engi-
neering, who has written “Brexit
clauses” into contracts to make sure any
tariffs imposed as part of a future trade
deal between the UK and EU are passed
to customers.
“Is it hard Brexit, soft Brexit? I don’t
know. January 31 is going to come and go
and I don’t know what’s going to hap-
pen,” he said.
On Friday, the UK formally leaves the
EU, triggering the start of the next phase
of the Brexit process. By the end of this
year, the two sides must agree a new
trading relationship or risk a “cliff edge”
departure where the UK has to revert to
World Trade Organization ules withr
accompanying tariffs on trade.
But even if Boris Johnson can secure a
new deal within atimeline dismissed by
EU leaders as unrealistic, there are fears
it could still lead to an increase in fric-
tion at borders.
Earlier this month Sajid Javid, chan-
cellor, told the FT that the UK would not
seek alignment with Brussels after
Brexit. This, Mr Javid said, would have
“an impact on business one way or the
other, some will benefit, some won’t”.
Business leaders in Sunderland fear
they will be left in the latter camp given
the reliance on companies that need to
import and export goods and supplies —
not leastNissan, the Japanese carmaker
that is the biggest private employer in
the area.
The chairman of Nissan Europe said
in October that its operations could be
in jeopardy if the UK was to crash out of
the EU without a deal.
One Remain-voting employee at the
Nissan site, a production line engineer,
described his mood asuneasy. “Nobody
has any idea what it means for us.”
James Ramsbotham, head of the
North East Chamber f Commerce, saido
he had also heard from senior managers
that it could close unless there was a
workable trade deal. “People in the sup-
ply chain are nervous,” he said.
A spokesman for Nissan said: “We are
among those companies with major
investments in the UK who are still wait-
ing for clarity on what the future trading
relationship between the UK and the EU
will look like.”
Mr Maughan said that breaking away
from European standards for an auto-
motive industry locked into global trade
would be “taking a step back”. He was
talking in an officeon an industrial
estate in Blyth Valley, part of the so-
called ‘red wall’ — traditional Labour
strongholds that switched to the Con-
servatives at the last election, helping
Mr Johnson secure his 80-strong major-
ity in parliament.
Despite past generations in the North
East blaming the Tories for the closure
of coal mines, three decades on, Brexit
has changed attitudes. Sunderlandhas
become the flagship for the Leave-
supporting region with more than
60 per cent of voters in the city oting tov
exit the EU in the 2016 referendum.
Talking in a café in the city’s shopping
centre, the staff of the nearby branch ofthe shoe repair chain Timpsons said
that local people were not worried now
that Brexit day was finally approaching.
“People voted for the Conservatives to
get Brexit done,” said Eddie Carroll, a
42-year-oldmanager, echoing Mr John-
son’s election mantra. “The general
election confirmed the [referendum] —
I don’t see things changing here.”
David Pearce, a shop manager whose
family were coal miners and traditional
Labour voters, added: “People are just
glad it's over.”
Graeme Miller, leader of Sunderland
city council, sees the contradiction
between the Brexit people voted for and
the unwanted consequences that might
come as a result. Any retreat by Nissan
caused by Brexit would be “cata-
strophic”, he said, describing the factory
as not just “regionally important but
nationally important”.
But during a “walking surgery” this
month — stopping by houses — Mr
Miller said: “The city voted to leave and
many are happy that the Conservatives
won because they see [them] as deliver-
ing the referendum.“You’ve got to
accept that politically. That is the real
world.”
Even some businesses are pleased the
Brexit stalemate has been resolved.
John Elliott, founder ofEbac, whichSunderland prepares for approach
of exit day with mixed emotions
FT Series nI heavily leave-voting city, some fear the future of its Japanese car plant is now in doubt
DANIEL THOMASA Brexit advertising campaign billed as
the biggest by the government since
the second world war may have failed
to encourage eople to seek informa-p
tion about leaving the EU, according to
the UK’s public spending watchdog.More than £46m was spent on the “Get
Ready for Brexit” campaign until work
was paused after an extension to Brit-
ain’s departure was agreed with the EU
in October. Despite the costs, the Cabi-
net Office “could not demonstrate that
the campaign resulted in significantly
better preparedness”, the National
Audit Office said.
The report will add to the scrutiny of
the government’s spending ahead of the
October 31 deadline set by Mr Johnson
to leave the EU with or without a deal,
given criticism over the money spent on
initiatives to prepare for a hard Brexit
that never materialised. The govern-
ment also gave more than £10m to busi-
ness lobby groupsto prepare usinessesb
for a no-deal Brexit in October.
The report comes as the government
prepares a new “Ready to Trade” cam-
paign on February 1 — the day after the
UK is due to formally leave the EU.
Another campaign will aim to raise
awareness of Britain’s departure this
week ahead of the end of the transition
periodon December 31 — the deadline
by which Britain must negotiate a new
trading relationship with the bloc.
The NAO said that a key performance
indicator — the proportion of UK citi-
zens who reported that they had looked
or started to look for information — “did
not notably change compared to the
beginning of the campaign”.
The impact of the campaign was likely
to have been reduced, it said, as fears
over a no-deal exit receded during Octo-
ber.
Less than half of the£100m budget
earmarked for the advertising cam-
paign was spent during the two month
period from the start of September.
Gareth Davies,head of the NAO, said:
“At short notice, the Cabinet Office suc-
cessfully corralled multiple government
departments to work together effec-
tively and launched this complex cam-
paign at great speed. However, it is not
clear that the campaign resulted in the
public being significantly better pre-
pared.”
The NAO said that the campaign had
made the public better aware of “some
of the things they might need to do”
ahead of the UK leaving the EU. This
included “signs that action was being
taken on some priority areas such as
passport renewal applications and
international driving permits issued,
which increased during the campaign”.
The Cabinet Officesays the campaign
reached 99.8 per cent of the population
andeach member of the public had the
chance to see the adverts 55 times.
According to a survey commissioned by
the Cabinet Office, 58 per cent of people
recalled the campaign and 73 per cent
recalled it when shown an advert.NAO report
Biggest advert
campaign
since WW
has little effect
makes electrical appliances, said:
“It’s more important to do right for
the country than for business. The
current system is not working for most
people.
“We can’t run this country for the
benefit of the motor industry — we need
to think about what’s good for the UK.”
Others argue that what is good for car-
making is good for the rest of Britain. “I
don’t think people appreciate quite how
long the supply chain is for Nissan,” said
Mr Dormer of Rosh Engineering.
“They’re not household names...
companies that make seats, dashboard,
windscreen, wipers, locks, you name it,
they employ thousands.”
The worry is that the North East will
be forgotten asWestminster plots het
UK’s future outside the EU. Few know
what Mr Johnson’s election vow to
“level up” the regions will mean in
practice.
“I am a firm supporter of British
industry,” said Mr Dormer. But
referring to an uncertain period after
this week’s landmark Brexit date, he
added: “It’s a bit like jumping out of an
aeroplane without a parachute. At first
you go, hey, I’m fine. I’m still doing
great... Bang.”
Additional reporting by Chris Tighe
Robert Shrimsley age 13pWorkers on the
assembly line at
the Nissan car
plant, the area’s
biggest private
sector employer
Chris Ratcliffe/Bloomberg;
Dan Thomas/FT‘It’s the
beginning[of the
Brexitprocess]
not the end’Ryan Maughan,
founder of Avid
TechnologiesMURE DICKIE— EDINBURGHScotland’s first minister has called on
the UK government to help create a
post-Brexit “Scottish visa” that would
allow easier entry for immigrants will-
ing to commit to living north of the
English border.The call from Nicola Sturgeonyesterday
reflects concern about the economic
and social implications of the end to
freedom of movement for EU citizens,
with experts saying it could lead to a fall
in the Scottish working age population
over thenext 25 years ecause of theb
slowing birth rate.
Politicians in Scotland have been
much more positive about the benefits
of immigration than in other parts of the
UK. Ms Sturgeon said she wanted a tai-
lored approach for Scotland that would
be as “open and flexible as possible”.
A one-size-fits-all UK system that
sought to cut overall immigration would
be “pretty disastrous” for Scotland, the
first minister said.
“I hope the UK government will be
prepared to work with us to deliver a
Scottish visa,” she said.
Inproposals ublishedp yesterday, the
Scottish government said the UK could
retain overall control of immigration
and border controls, but devolve to
Edinburgh the power to create a new
visa process subject to Home Office
identity and security checks. The visawould allow immigrants to live and
work in Scotland.
The Home Office, whichyesterday
unveiled a“Global Talent” route into
the UK forscientists and mathemati-
cians, dismissed the suggestion that
influence over visas might be devolved.
“Immigration will remain a reserved
matter,” a Home Office spokesman said.
“The UK government will introduce a
points-based immigration system that
works in the interests of the whole of the
United Kingdom, including Scotland.”
UK officials are concerned that
devolving or even merely tailoring pol-
icy for Scotland or other parts of the UK
could massively complicate the immi-
gration system.
However, the Scottish government
says international experience and the
past success of the Scotland-only post-
study work visa show that its proposals
are practical.
Anindependent study ast year con-l
cluded that Canada’s immigration sys-
tem showed how policy could be tai-
lored to help Scotland head off a loom-
ingcrisis over the balance between pen-
sioners and working-age Scots.
Andrew McRae, policy chair of the
Federation of Small Businesses in Scot-
land, said: “The UK government should
acknowledge that it is possible and
desirable to enable its immigration sys-
tem to respond to different regions and
nations.”Immigration
Sturgeon calls for Scottish
JIM BRUNSDEN AND SAM FLEMINGBRUSSELS visa policy to be devolved
Brexit day will transform the relation-
ship with Europe, shift the UK’s place in
the world and herald a new era in inter-
national relations. But little to nothing
will change immediately.
The post-Brexit transition period will
pick up whereEU membership left off,
offering a temporary safe harbour while
Brussels and London haggle over their
long-term relationship.
During that 11-month spell, the UK
will keep many of the benefits and obli-
gations of membership: British nation-
als will no longer be EU citizens, but
they will be able to travel around the
union as freely as before; British mem-
bers of the European Parliament will
leave, but the UK will remain a fully
integrated part of the single market.
The realities of Brexit will come
sharply into focus as the clock ticks
down to the end of this year, when the
transition period will expire. In the
meantime, migrant workers have an
opportunity to navigate the application
processes that will safeguard their rights
for life, and businesses have some time
to adapt supply chains.
What happens on February 1?
The UK will enter a twilight period dur-
ing which it will continue to apply and
be bound by all EU laws but will be
ejected from the EU’s political institu-
tions: no MEPs, no British seat at the
EU leaders’ table, no UK voice on the
boards of the union’s myriad technical
agencies.
Britain will have zero say over the EU
rules that will still apply for the next 11
months. The European Commission will
have the power to investigate breaches
of the bloc’s laws, and the European
Court of Justice will have the power to
impose fines. The UK will contribute to
the EU budget.
UK nationals who have joined the
European civil service will have the
right to work in it for the rest of their
careers. Britain’s diplomatic presence in
Brussels, known as the UK Permanent
Representation to the EU, will be
rebranded and British officials’ access to
EU premises and information will be
sharply curtailed.
Used to freely roaming in the EU’s cor-
ridors of power, British diplomats will
now need to apply for permission even
to enter the Brussels institutions’ bars
and cafés.What does it mean for citizens?
British and EU citizens will continue to
benefit from free movement during the
transition period.
After transition, Britons living in the
27 EU member states will have their res-
idency rights safeguarded, subject to
completing whatever administrative
procedures are imposed by the national
government.
It is up to each EU country to decide
how to carry out that exercise, including
whether to create a new type of resi-
dence status for UK nationals. EU
countries have to provide a digital resi-
dence document to those with the right
to remain.The divorce deal does not grant Brit-
ish expats full freedom of movement
rights within the union. It guarantees
rights for UK citizens in the EU27 coun-
try where they reside.
This means that a British national liv-
ing in, for example, Portugal will not
necessarily be able to move to Poland to
take up a new job. But the European
Parliament has urged that UK citizens
living in the EU should be granted free
movement rights.What about EU nationals living in
the UK?
The 3m EU citizens resident in the UK
have until June 2021 to register for Brit-
ain’s settled status scheme, which allows
them to stay in the UK with existing
rights after Brexit. The scheme is open
to people who have been living in the
country for at least five years.
Those who have not been there longenough can apply for a pre-settled sta-
tus, which grants the right to live and
work in Britain for up to five years. To be
eligible, someone needs to arrive in the
UK before the end of the transition
period.
The picture changes from the begin-
ning of 2021, when Britain becomes a
third country. From then, EU citizens
coming to the UK may need visas and
work permits if they plan to build a life
here. Both Britain and the EU have said
they want to put in place a visa-waiver
scheme for short stays of up to 90 days.What are the implications for business?
Free movement of goods will continue
during transition. But Britain will no
longer be represented in the crucial
technical work the EU carries out to
decide which products can be sold in its
market and under what conditions.
The European Chemicals Agency, for
example, has the power to decide
whether a new substance is safe for con-
sumers, while the European Banking
Authority sets rules that affect compli-
ance costs for financial services.
Brexit day also sets the clock ticking
for business. Companies have no idea
what awaits them after the end of this
year, because the UK and EU have yet to
negotiate a new trade deal. Whatever is
finally agreed, there will be a hard bor-
der for trade in goods between Britain
and continental Europe that has not
existed for decades.
That puts pressure on business to
adjust supply chains, relocate opera-
tions and analyse costs.Twilight zone ransition period offers a temporary safe harbourT
London and Brussels are set to haggle
over their long-term relationshipCO U N T D OW N TO B R E X I T
Brexot
countdown
Read previous
items in this
series to mark
the UK’s formal
exit from the EU
on January 31ft.com/
brexitcountdownJANUARY 28 2020 Section:World Time: 1/202027/ - 19:58 User:sanjay.gohil Page Name:UKNEWS2, Part,Page,Edition:LON , 3, 1