The UK Government today published guidelines for businesses on how to prepare for the eventuality of a no deal Brexit situation.
The guidance comes ahead of the slated deadline for Brexit negotiations to end, with 29 March 2019 at 11pm scheduled as the departure date and time for the UK from the bloc based on the two-year period since Article 50 of the Lisbon treaty was triggered.
In a speech given today (23 August 2018), Dominic Raab, UK Secretary of State for Exiting the European Union, warned firms of potential disruption through border delays and red tape should the two negotiating sides fail to reach an agreement by the deadline.
Raab said he was confident the two sides would reach a deal, but set out precautionary steps for firms to consider should a no deal or ‘hard’ Brexit come to pass.
Despite adopting what has been described as a ‘business-friendly’ approach, Prime Minister Theresa May has impressed neither Brussels negotiators nor business leaders in the UK.
The guidelines published by the government outline that new customs and excise rules would be faced by companies trading with Europe in the event of a no deal scenario.
The 25 published today, described as ‘technical notices’ by the Government, are the first of around 84 notices for businesses and citizens that consider a no deal scenario, with more to follow through September.
This first tranche of no-deal Brexit guidelines from the Government includes specific guidance for industries including farming, medicine and state aid, as well as more general guidelines for businesses importing and exporting products and components to and from the European Union.
“A no-deal Brexit will turn the Garden of England into the UK’s biggest lorry park”
If the UK leaves the EU without a deal then the repercussions for Europe’s supply chain will be “a disaster”, according to the Road Haulage Association (RHA).
The RHA has met with government ministers “on many occasions” to discuss the needs of UK transport operators and has stressed that the only way to maintain economic links on both sides of the Channel is to continue with the process of free-flowing borders.
In a statement, a RHA spokesperson said: “If (free-flowing borders) is not going to be the case, then a no-deal Brexit will be little more than a nail in the coffin of the industry responsible for moving 98% of the UK economy.
“The future for the people and businesses of Kent also looks grim, as within a short period of time the Garden of England becomes the UK’s biggest lorry park.”
Writing on Twitter, Duncan Buchanan, Policy Director at the RHA, said the documents “highlight the scale of the problem we face.”
The customs paper today has highlighted the scale of the problems business face – and the short time everyone has to adjust ( or not if there is a deal). Too little too late for many businesses in the U.K. and EU. #brexit https://t.co/dt9XhgsRte
— Duncan Buchanan (@RHADuncanB) August 23, 2018
The automotive industry reacts
According to figures published by the European Automobile Manufacturers Association (ACEA) back in April 2018, the UK is reliant on export markets for cars produced here. 80% of all cars built in Britain are exported, with 54% of those going to EU member states.
EU countries also represent 82% of UK vehicle import volume according to the figures, worth €38 billion.
14.1 million auto parts and components, worth €11.4 billion, were improved to the UK from EU member states in 2017 – almost 80% of all UK part and accessory imports for that period. UK exports of parts and components to the EU27 were valued at €4 billion, around 68.3% of the UK’s global part and accessory exports value.
Any disruption to trade with the European Union would therefore have a knock-on effect for the UK motor trade and aftermarket and the businesses that rely on it.
Key figures in the automotive industry have already spoken out of the dangers of a no deal Brexit scenario to the automotive industry.
Speaking out on the back of Raab’s speech and the publication of the guidelines, Sue Robinson, Director of the National Franchised Dealers Association (NFDA), said: “It is encouraging to see that the Brexit Secretary has stated that reaching a deal remains an ‘overriding priority’ and a ‘no-deal’ scenario is not what the government wants or expects.”
“Positively, the government has started to prepare for every possible scenario and is now providing advice to businesses suggesting them to ‘review their contingency plans’, which we invite our members to do.” -Sue Robinson
“We are pleased to see that the government is keen to pick up the pace of negotiations with the EU as this will give businesses and consumers more clarity and confidence to plan ahead.
“NFDA will continue to engage with the government to ensure that the negotiations will have the best possible outcome for UK car retailers. In particular, we await the publication of the ‘Trade Agreement Continuity’ notice which is likely to include important details about future trade between the UK and EU.”
The Society of Motor Manufacturers and Traders (SMMT) published a study earlier in the year into the wider ramifications of trade difficulties with the European Union, citing sectors that would be impacted by issues affecting the automotive industry and supply chain as including logistics, freight, shipping, retail and distribution, finance, insurance, fuel and maintenance and telecoms.
The study reported that for every pound generated by UK automotive, three are delivered into the UK economy.
Speaking to reporters in July, Mike Hawes, Chief Executive of the SMMT, said: “No deal… is just not an option. It would be seriously damaging to the industry not just in the UK but in Europe as well.”
For more information:
UK government guidance on how to prepare for Brexit if there’s no deal