Brexit Turmoil-Industry Share Their Views

TherseaMayFollowing last night’s vote where MPs are soundly rejected Theresa May’s Brexit deal for a second time by a majority of 14, the government have announced a series of measures to deal with a potential “no deal Brexit”. The government have today announced that tariffs will be cut to zero on 87% of imports to the UK as part of a temporary no-deal plan but prices of some imports will go up.

Imports that would have tariffs include:

  • Beef, lamb, pork and poultry and some dairy products – put in place to protect UK farmers and producers from cheaper imports
  • A number of tariffs would be placed on finished vehicles to support the car industry, however these will not apply to car parts imported from the EU to prevent disruption to supply chains
  • Certain ceramics, fertiliser and fuel, where the tariffs will protect UK producers against unfair practices such as state subsidies
  • Bananas, raw cane sugar and certain kinds of fish with tariffs used to permit preferential access to the UK market for developing countries

Industry leaders have expressed concern at this current turmoil, FDF chief executive Ian Wright CBE said: “Today’s announcement on tariffs underlines why the UK is not ready to exit the EU on 29 March. Business cannot adapt to this new regime in just two weeks. It is disgraceful; that we are, only now, getting to see these. There must be proper consultation with business before a change of this magnitude is introduced.

“We were promised that business would only have to adapt to one new change of rules; it’s now clear that promise has not been kept.

“This new system is confusing and complex. It includes some zero tariffs, some new tariffs and some quotas. Some foodstuffs qualify for partial protection and some not for any protection at all; with little logic to explain the difference. New tariffs will apply to some foods that are currently imported tariff-free, yet no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland. This is likely to result in massive trade distortions.

“In a world where it is costly and complex to export finished goods to the EU, and costly and complex to import key ingredients, many food and drink manufacturers who trade with the EU will surely question whether the UK is the right place for them to be.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said: “The rejection of the Prime Minister’s flawed Brexit deal throws wine and spirit businesses into yet deeper uncertainty; and for longer. With the Brexit deadline only a fortnight away it is imperative that MPs vote this evening – and then legislate – to avoid ‘No Deal’. Whatever happens next it’s clear that an extension to article 50 is required, which the UK government and the EU should agree as soon as possible.

We welcome the decision that there would be a temporary suspension of tariffs on wine and most spirits under ‘No Deal’, which the WSTA called for earlier this year. But far more than this would be required to ensure that wine and spirit businesses can deliver a free flow of trade. Action is urgently needed to resolve questions related to customs arrangements, border controls and migrant workers in order for businesses to keep trading.”

“This is yet another reason why Parliament must, this evening, act decisively to remove the threat of exiting the EU without a deal on 29 March 2019.”

UKHospitality Chief Executive Kate Nicholls said: “The hospitality sector has historically proven resilient and innovative, but the unprecedented confusion and uncertainty since the referendum has provided stern tests with no relief seemingly in sight. A no deal Brexit would be dreadful news for the sector and many businesses will face serious disruption if we crash out without a deal. Parliament needs to move to rule out such an outcome and then act swiftly and decisively to ensure we avoid it.

“In the meantime, and at the very least, all other business needs to be put on hold as a matter of urgency. We need to devote our time to addressing the challenges a no deal Brexit is inevitably going to produce and there just is no option of doing business as usual.”

While the likelihood of a delay to the March 29 departure date seems certain, Prime Minister Mrs May will today ask MPs to vote on whether they want to block a No Deal Brexit, however yesterday’s defeat also opens the door to drastic options such as a general election or second referendum.