Government ‘no deal’ papers published

On August 23, the Government published technical papers outlining its plans for 25 different sectors of the UK economy in the event of a ‘no deal’ Brexit. In total, the Government plans to publish 84 papers, with the next batch to be released in September. Dominic Raab, David Davis’s successor as Brexit Secretary, launched the papers with a speech in Westminster.

The SNP-controlled Scottish Government warned that the papers still relied on the false assumption that the UK would be able to effectively negotiate bilateral deals with the EU, and warned that Scotland was facing a ‘no deal Brexit nightmare’.

Michael Russell, the Scottish Government’s Constitutional Relations Secretary, said:

“These technical notices reveal the ‘no deal’ Brexit nightmare facing Scotland and lay bare the risks facing Scottish businesses, the economy and public services.

“From the bureaucratic burden that will be imposed on EU imports and exports to the need to strike a wide range of ‘no deal’ deals before the end of March, these notices only add to the uncertainty surrounding Brexit. People want to know if their medication will still be available and farmers and fishermen want to know if they will still be able to sell their products.

“While a responsible government must prepare for all exit possibilities, the UK Government should rule out a disastrous ‘no deal’ and focus instead on securing the best outcome for us all — which, short of staying in the EU, is remaining part of the Single Market and Customs Union.”

Chair of the Brexit Select Committee, Hilary Benn MP, warned that there would be no transition period for the UK in the event of no deal. He said:

“Ministers have left their No Deal planning very late in the day. A lot of questions remain to be answered, and they seem to be relying on continued co-operation with the EU without any indication of what would happen if this was not forthcoming.

“A failure to reach agreement with the EU will also mean no transition period so all this uncertainty could be just seven months away.

“These papers tell us three things. First, they confirm that No Deal — far from being better than a bad deal — would be very damaging economically. Businesses that export to the EU would face the cost and bureaucracy of customs, safety and security and rules of origin declarations for the first time, and in certain sectors, tariffs.

“Secondly, there is no guarantee for British citizens living in other EU countries about the future of their pension payments.

“Thirdly, there is still no clarity on how the return of a hard border in Northern Ireland will be avoided, and ministers have simply told businesses to seek advice from the Irish Government. This is an extraordinary abdication of responsibility.

“Having wasted two years, these papers show exactly why No Deal is unacceptable and why ministers must now ensure that an agreement is reached with the EU which provides a transition period and protects jobs, trade and investment.”

Anti-Brexit campaign groups reacted with dismay, criticising the Government’s failure to rule out a no deal Brexit.

Labour MP Ben Bradshaw, a supporter of the People’s Vote campaign, said that the British people were being forced into a choice between ‘a botched Brexit and a no deal Brexit’ and repeated calls for a second referendum.

“From border delays, to extra bureaucracy and red tape, to UK citizens potentially losing access to their pensions, today’s speech by Brexit Secretary Dominic Raab was full of new information about a disastrous no deal Brexit that no-one could have known about at the time of the referendum. This is not what anyone voted for.

“We are in this shambolic situation because the Government has utterly failed to come up with a proposal that is acceptable to either the EU or even their own party. They have made a catastrophic mess of this process from start to finish and that’s we’re looking down the barrel of a disastrous no deal Brexit.

“Rather than be bounced into a false choice between a botched Brexit or a no deal Brexit, we need to listen to the growing demands of people across the UK for a People’s Vote. Dominic Raab and other ministers cannot be allowed to slip and slide their way out of their accountability to the people.”

Former Liberal Democrat Leader Tim Farron, speaking for anti-Brexit group Best for Britain, decried the impact ‘no deal’ Brexit would have on farmers.

“The Government’s ‘no-deal papers’ reveal what British farmers have feared for a long time.

“A nine month wait for organic farmers to sell their produce into their biggest market would see farmers up and down the country wiped out.

“The Government’s disastrous mishandling of these negotiations looks almost certain to lead to British organic farmers being put out of business — nobody voted for that.”

Fallon’s fellow Liberal Democrat MP Tom Brake, the party’s Brexit spokesman, called for UK citizens living in the EU who could not vote in the 2016 referendum to be given a say on the final deal:

“Over a million UK citizens living across the EU had no say in 2016. They now face the prospect of losing access to their pensions and bank accounts as a result of Theresa May’s disastrous negotiations.

“Given the nightmare consequences Brexit will have for their lives, they deserve an opportunity to stop this mess. They, like all British citizens, deserve a final say on the deal with an opportunity to remain in the EU.”

Industry bodies welcomed the publication of the papers, but were unanimously hostile to the UK leaving the EU without a deal.

British Chambers of Commerce (BCC) Director General Adam Marshall called the papers a ‘good start’, but called on the Government to be more transparent about the implications of ‘no deal’.

“Public preparations for all eventualities — and clear, crisp communication with affected businesses — are long past due.

“The technical notices being published by the UK government are a good start, but businesses still need more detailed information to trade as smoothly as possible across borders if there is no UK-EU deal on March 30th next year.

“Ministers say they will take unilateral steps to keep trade moving freely but must demonstrate what they will concretely do to limit the impact of delays, inspections and red tape.

“It is unfortunate that businesses face several weeks wait for further information and clarification. Every additional delay means less time for businesses to prepare ahead of the UK’s fast-approaching exit from the EU.”

Josh Hardie, CBI Deputy Director-General, said that the papers made it clear that ‘no deal’ would have a devastating impact on the UK economy.

“By now, few can be in any doubt that ‘no deal’ would wreak havoc on economies across Europe. These papers show that those who claim crashing out of the EU on World Trade Organisation rules is acceptable live in a world of fantasy, where facts are not allowed to challenge ideology.

“It’s right and responsible that the Government have supplied information to businesses on issues from financial services passporting to food labelling, all of which will help lower the risks of the harshest outcomes from a ‘no deal’ Brexit. But without a similar response from the EU, many of these mitigating measures would be blunted.

“The reality is that businesses across the UK have already spent millions of pounds and thousands of hours on getting ready for no deal. Whilst smaller firms simply do not have the resources to assess what the worst-case scenario would mean to their enterprises.

“These technical notices can only be a starting point for the Government. Smaller businesses in particular will need a one-stop-shop where they can get the information and support they need to better understand the issues they would face.

“Above all, negotiators must now get on with finalising a Withdrawal Agreement, putting pen put to paper on a jobs-first transition period and finally, agree on a new relationship that puts people’s livelihoods above politics.”

Stephen Phipson, Chief Executive of manufacturers’ organisation EEF, welcomed the papers, but said that he remained confident that the UK would negotiate a deal with the EU.

“EEF welcomes the increased clarity for businesses from the publication of today’s raft of technical notices. However the remaining notices need to be published at the utmost speed so companies have the full picture to enable them to prepare properly for a no-deal scenario.

“The decision to allow importers to defer VAT payments is very gratefully received and is something EEF has been campaigning hard for with Government in order to protect the 145,000 businesses in the UK which are above the VAT threshold.

“We also welcome the commitment to create UK replacements for the regulatory bodies we will leave next March if we fail to reach a deal with the EU. However, we would like Government to make firm commitments to ensure these bodies can swiftly recruit the skilled people they need to deliver a seamless regulatory environment in the event of a no deal exit.

“To help manufacturers, EEF is today launching a dedicated Brexit hotline to help companies understand the implications of the technical notices.

“However, we remain confident that Government will secure a deal with the EU and will continue to work with ministers to help secure this.”

Warwick Smith, Director General of the British Generic Manufacturers Association (BGMA) and the British Biosimilars Association (BBA), praised the Government’s ‘realistic and pragmatic approach’, but warned that leaving without a deal could jeopardise supply chains.

“We welcome the three technical notices that the Government has published today and which impact directly on generic and biosimilar medicines manufacturers. We all want an agreement between the UK and the EU27 on a future relationship which protects the benefits for patients of the European single market in medicines and regulatory framework which allows our complex cross-border supply chains to continue to function effectively.

“But lead times in the manufacture of medicines last many months, and industry needed to know now how the UK Government would oversee regulation if we were to leave the EU without a transition period or other arrangement. We have been discussing what is needed with the Government for some time: these notices build on past ministerial commitments and are a tangible expression of the pragmatic approach that we understood they would take. We particularly welcome the Government’s commitment to accept batch testing and release in the EU. Further detail is needed on some issues, such as the approval of biological medicines, and we welcome the Government’s commitment to consult industry further on these outstanding issues.

“But what we have today already gives industry much more of the certainty that we need and we welcome the realistic and pragmatic approach that the Government is taking.”

Hugh Savill, Director of Regulation at the Association of British Insurers, said that agreeing a deal with the EU was a ‘matter of urgency’.

“Leaving the EU without a deal would cause major inconvenience to millions of pensioners, travellers and drivers. We urge the Government to agree a deal as a matter of urgency.

“Today’s paper emphasises the risk of insurers not being able to make payments to customers based in the EU after the end of March next year. Obviously insurers want to meet their commitments to their customers, but this problem has the potential to affect millions of insurance customers, including UK pensioners overseas. It can be fixed by co-operation between the UK and EU regulators — if the EU authorities wish to do so. Insurers have of course been making contingency plans for their own operations for many months now, but this contract issue is not one that insurers themselves can fix.”

UK Steel’s Head of Policy, Richard Warren, welcomed the papers, saying that they confirmed the dangers of leaving the EU without a deal.

“The publication of these notices is a welcome move, injecting some much needed realism into preparations and demonstrating that the full range of outcomes are being prepared for, including no deal being arrived at. Importantly, these notices will help steel companies plan and prepare for such an eventuality.

“This first batch of notices confirms the difficulties the steel sector would face if we exited the EU abruptly next year. Every week some 900 trucks and several trains carry steel across the channel, totalling some 2.3 million tonnes last year. Additional customs procedures and delays will quickly stack up costs and impact on business.

“In particular for our sector, more clarity is required around trade remedies. There are a host of issues not dealt with in the paper such as: the transition of the recently introduced EU steel safeguard, the review of the full range of anti-dumping measures being carried over and of course, how the Trade Remedies Authority is going to be adequately staffed, with sufficient expertise, to conduct investigations in just seven months’ time.

“These notices provide some much needed transparency, clarity and advice but it is vital that the remaining notices are published as soon as possible and the gaps are filled in.”