Britain set for no-deal Brexit

London, UK: Britain is set for a no-deal Brexit with talks between the UK and EU about a post-Brexit trade agreement “over”, a Downing Street spokesman said.

There was “no point” in discussions continuing next week unless the EU was prepared to discuss the detailed legal text of a partnership, he said.

Earlier today, the prime minister, Boris Johnson said the UK had to “get ready” to trade with the EU next year without an agreement. He warned that businesses and hauliers should get ready for a no-deal Brexit.

Johnson said that he wanted a “Canada-style” deal but he has concluded that the UK should get ready for an “Australia-style” outcome.

John Perry, managing director at consultancy Scala, said: “Boris Johnson confirmed today that the UK must now prepare for the prospect of a no-deal Brexit from Jan 1. However, it is extremely difficult for businesses to prepare for anything when we have had to endure four and a half years of mixed messaging, confusion and uncertainty – particularly when we still do not know whether this is a genuine warning to prepare, or a final negotiation tactic to secure a deal at the eleventh hour. 

“The headlines from recent weeks around the construction of inland revenue sites and up to 7,000 trucks being stuck in a lorry park in Kent – clearly last-minute contingency plans, indicate a government that had the wellbeing of its businesses in the event of a no-deal as an afterthought, not the critical priority it clearly should have been.

“At this stage, it is unlikely that any preparations we carry out in the now-limited timeframe will be enough to ensure smooth border crossings and continuation of supply as we know it. 

“If the government is truly now turning their back on trade talks with the EU, we would urge them to now focus their efforts on mitigating the damaging impact this move will no doubt have on UK businesses and their supply chains. The industry is ready to take whatever action it can to ease the transition, and we would urge Government to work with the industry to put in place measures to support businesses and minimise the heavy cost that companies, their supply network and their customers are now likely to have to pay.” 

Elizabeth de Jong, policy director, Logistics UK, said: “A deal is vital for the transport and logistics industry and for the whole economy, which relies on fast and efficient supply chains. To keep Britain trading, trucks must keep going through the borders with the least possible friction; a deal with the EU is vital to achieve this and to enable the sector to focus on maintaining its resilience during the Covid-19 pandemic and investing to improve performance.”

Richard Burnett, chief executive of the Road Haulage Association, met with Cabinet minister Michael Gove today. The RHA described the meeting as productive and positive but stressed there were lots of issues – IT, customs and process – to sort out with time running out fast.

Carolyn Fairbairn, the director-general of the CBI, said: “After four years of negotiations and so many hurdles crossed, this is no time to give up. Neither side can afford to fall at the final fence. A deal is the only outcome that protects Covid-hit livelihoods at a time when every job in every country counts.”

Mike Cherry, the national chairman of the Federation of Small Businesses, said firms were not ready to cope with a no-deal Brexit with only 10 weeks before the end of the transition period at the end of December.

“They’re being told to both prepare and simultaneously manage a fresh set of Covid restrictions. Many simply don’t have the time or money to make adjustments, even if they want and need to,” he said.

Ian Wright, the chief executive of the Food and Drink Federation, said a no-deal Brexit would cause severe disruption for business, damage food security and push up prices in the shops for consumers.

“The prime minister’s statement signals that we are heading into very dangerous territory. The perils of a no-deal exit for GB food and drink manufacturing remain as real as ever. We need leaders on both sides to find a way past the current impasse in order to progress talks,” he said.
Food supply chains are now faced with a second wave of coronavirus coinciding with the end of the Brexit transition.

Still unresolved are issues arising from the border in Ireland. There will be additional costs to import from the EU in the event of a no-deal and supermarkets and suppliers are already in dispute about who will pay. Last month there were reports that Tesco Ireland had demanded its suppliers pay any new Brexit duties.

Government’s proposals for a trusted trader scheme are set to drive a further wedge between retailers and manufacturers. The scheme, which could allow for the waiving or streamlining of checks on goods moving between Britain and and Northern Ireland, is likely to apply only to goods moved by Northern Ireland’s largest grocery retailers; a move that would put suppliers on both sides of the Irish Sea, as well as wholesalers and smaller retailers in Northern Ireland, at a disadvantage against the big supermarkets.

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