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Boris Johnson has been warned that the fate of millions of jobs, Britain’s poorer regions, and the UK’s manufacturing base depend on him striking a last-minute trade deal with the EU, as leading figures a final petition for a compromise was issued from all corners of the economy.
Amid frustration and disbelief among prominent businessmen that a deal has yet to be struck, consumer groups, universities, farmers and retailers large and small said a deal was essential to enable them to cope with the impacts of Brexit, even with an on-site deal. Some simply asked ministers to be honest about the impact of the lack of agreement.
The companies said they were still encountering issues over their Brexit readiness with the transition period ending in less than three weeks, deal or no deal. Meanwhile, business groups in areas like the Northeast said they would be “exposed” without a deal in place. Consumer groups also warned of the impact on cross-border consumer rights, food prices and travel once the transition period is over.
However, a government spokesman noted last night that he was ready and willing to accept any deal, saying that he had made “comprehensive preparations and invested £ 4 billion by the end of the transition period, because regardless of the outcome of the negotiations, we must be ready on January 1 ”. The spokesperson said that while “there will be challenges and obstacles to overcome,” it has “laid the groundwork to minimize the disruption that occurs in any scenario.”
Business groups are understood to still be privately urging ministers to push for a deal this weekend, with the deadline for talks set for Sunday night. While the cabinet approved his support for a no-deal outcome should Johnson opt for it, it was understood that Chancellor Rishi Sunak was receiving hourly updates amid enormous pressure on the Treasury to push for a deal.
Stephen Phipson, chief executive of the manufacturer’s lobby group, Make UK, warned that many of the 2.7 million jobs supported by manufacturing companies were heavily reliant on trade with the EU. “A no-deal would be catastrophic for British manufacturers, a sector that came to the nation’s aid when the Covid crisis hit,” he said. “It is vital that the prime minister and the chair of the EU commission work together and find a pragmatic solution to deliver a zero-fee, zero-fee agreement to avoid additional friction at the border.”
With caveats that a no-deal outcome would be “existential” for the UK auto industry, rendering it unprofitable overnight, Mike Hawes, director of the Society of Engine Manufacturers and Traders, said: ” The resulting tariffs would put our manufacturers at a disadvantage in export markets, raise prices for consumers, and make the UK uncompetitive, both as a market and as a producer. We know the UK government understands this and we hope that do whatever it takes to secure an agreement that protects the industry and the hundreds of thousands of livelihoods that depend on its success. ”
The President of the National Farmers Union, Minette Batters, said: “More than 60% of our agri-food exports go to the EU, making it the largest trading partner for British agriculture. Reaching a deal is critical to maintaining those trade links, and without it there will be a significant disruption to British food and agriculture. The government must be frank with businesses about the impact of the lack of agreement and address many outstanding issues, such as ensuring that the necessary authorizations for agri-food exports exist and ensuring that there will be sufficient financial support, advice and resources for businesses. “
Business groups in the regions that voted in favor of Brexit warned that their dependence on EU trade meant they wanted the prime minister to compromise. Jonathan Walker, policy director for the Northeast England Chamber of Commerce, said the body had been advocating a trade deal for four years because of the area’s economic dependence on Europe. “The EU is the largest market in the Northeast and the government’s own analysis has clearly established how exposed we would be to the consequences of a no-deal Brexit,” he said. “It’s ridiculous that our companies now only have a few days to fully prepare for the biggest change in business conditions for generations without being clear about how they will have to operate.”
The absence of a duty-free deal would mean supermarkets and their customers face £ 3bn fees from next year, according to Andrew Opie, director of food and sustainability at the British Retail Consortium. He said that four fifths of UK food imports came from the EU each day. “While retailers are doing their best in time for January 1, no amount of preparation for retailers can fully mitigate the disruption of food and other essential goods coming from or through the EU,” said.
Tony Danker, the director general of CBI, also called on the prime minister to analyze what is at stake in the negotiations. “With less than three weeks to go, we also have to plan in parallel for January 1, agreement or not,” he said. “We need both sides to be deeply practical and eliminate the immediate threat of a damaging cliff edge.”
Sue Davies, Which? Director of consumer protection, said that no deal would have significant impacts on consumers in the immediate term “with a likely adverse effect on cross-border consumer rights, food prices and travel once the end of the transition period. ” He added: “One of the consequences of the likely economic uncertainty is that people could see the value of their pensions or investments affected.” Abta, the leading association of travel agents and tour operators, called for clarity, whatever the rules. The rules on future travel in Europe remain unclear.
Universities UK said that no agreement would mean an “immediate interruption of the activities of the universities and could have longer term consequences for their international competitiveness”. He added: “There must be guarantees that no agreement will not disrupt existing supply chains of universities, stop the flow of data from the EU and the UK, or hinder the future mutual recognition of professional qualifications.”
Meanwhile, parliament last week released a huge dossier of concerns about the lack of preparation for Brexit, whatever happens in the trade deal negotiations.
The business selection committee received warnings about preparing from groups such as the Law Society, the Association of Convenience Stores, the Institute of Chartered Accountants in England and Wales, the offshore oil and gas industry and the Mineral Products Association.
Arla Foods, a cooperative owned by about 11,200 dairy farmers based in seven northern European countries, said that even now they were encountering “new problems that we had not been aware of before.”
A UK government spokesperson said last night that 900 more officers had been hired to manage the border, with 1,100 border officials being hired in March. They added that there were more than 20 hotlines in place to provide advice to specific sectors and that import controls would be introduced in stages. “We have developed a strategy manual that outlines each foreseeable scenario with courses of action approved by the minister so that we can implement them immediately if necessary,” they said.
