Brexit: Industry appeals to government to ‘double down’ on efforts to get a trade deal before New Year deadline

MPs to be recalled to parliament during Christmas break if free trade agreement reached

Andrew Woodcock
Political Editor
Friday 18 December 2020 15:33
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As MPs left Westminster for the Christmas break without an EU trade agreement, industries responsible for shipping and supplying food and other goods to UK consumers issued a plea for the government to “double down” efforts to get a deal to minimise disruption, shortages and price hikes.

Trade organisations told The Independent that companies will be working round the clock during the festive period to ensure the transition out of the single market and customs union is as smooth as possible on 1 January, but voiced frustration that they still have little or no clarity about the conditions they will be operating under in just two weeks’ time.

Meanwhile, a committee of peers appealed to ministers for a “grace period” of up to six months to allow food, farming and haulage businesses to adapt to post-Brexit trading rules.

The government has deferred customs declarations until June for goods coming into the UK, but the House of Lords EU environment sub-committee warned that without a similar grace period for exports, there was a danger of tons of British food being left to rot or turned back at the border.

“Given that the government’s negotiations have left industry with just two weeks to prepare, this grace period seems like a proportionate request,” said the committee’s chair Lord Teverson, who set out the demand in a letter to environment secretary George Eustice.

“The main message from businesses is that the government isn’t ready for 1 January, which means that they can’t be ready either. They don’t know what rules will apply and say that government guidance is sometimes contradictory.

“Without clear, co-ordinated information, it is impossible for businesses to adjust their practices, which will mean that from 1 January their produce may not be picked up by hauliers in the first place, might be turned around at the border, or in the worst case could spoil in vans because of the border delays arising.

“Industry wants to make the new arrangements work and has been heeding government warnings to get ready, but ministers must explain exactly what the changes will be and  provide the support that farmers and businesses need.”

Ministers are resigned to disruption at ports handling roll-on/roll-off and passenger traffic across the English Channel and Irish Sea after the transition to Brexit ends at 11pm on 31 December, though Cabinet Office minister Michael Gove told MPs today that he was hopeful of problems being resolved “relatively early in the New Year”.

Attention is focused on Dover, with queues of up to 7,000 trucks expected in Kent and a lorry-park to hold them unable to open fully because of construction delays. But experts say destinations like Holyhead, Portsmouth and the Humber ports are also likely to be affected.

And pressure will be heightened by the separate snarl-ups at container ports like Felixstowe and Southampton caused by the Covid-19 crisis, which have seen backlogs build up to the point that importers are offloading cargos at Rotterdam for transfer to lorries to take them on the final leg of their journey to the UK via Dover.

British Ports Association head of policy Mark Simmonds told The Independent: “Ports dealing with potential Brexit disruption have become frustrated in the last couple of months because they haven’t been unable to get the details they need to prepare properly. There’s lots of technical stuff about checks and so on where it’s been like pulling teeth to get information out of government. It would have been useful to have it months ago.

“Ports are prepared, but it’s like saying you are prepared for a slap in the face. You might be prepared for it but you’re still not going to enjoy it.

“Some ports are keen for a deal, because the imposition of tariffs under no-deal would affect their throughput, but for others deal or no-deal look pretty similar because both mean more checks at the frontier. Disruption at some points is almost inevitable in January regardless.”

With no clarity on what to expect on 1 January, ports are preparing for every eventuality, he said, adding: “I don’t think many of them will be taking too much time off over Christmas and New Year.”

Logistics UK, which represents the UK freight industry, said that vital new IT systems are being delivered by government too close to the switchover for companies to learn how to operate them.

“Ports are prepared, but it’s like saying you are prepared for a slap in the face. You might be prepared for it but you’re still not going to enjoy it.”

Mark Simmonds, British Ports Association

General manager for public policy Alex Veitch urged government to keep trying for a last-minute deal to keep the scale of change to a minimum, warning that mini-deals on aviation and transport offered by the EU in the case of no-deal will not prevent shocks to the supply chain.

“It is imperative that both sides keep pushing for an agreement which keeps goods flowing, vehicles and planes moving and protects economies on both sides of the Channel,” said Mr Veitch.  

“The no-deal proposals by the EU do not go far enough, so a deal is needed to provide crucial elements to protect the supply chain."

Supermarkets have been building stockpiles of non-perishable food in preparation for the transition to Brexit, so any shortages on the shelves are expected to feature fresh fruit and vegetables, salad or seafood.

In the case of no-deal, stores will be faced with the challenge of whether to absorb the additional cost of tariffs averaging around 20 per cent but rising as high as 48 per cent on beef mince or 57 per cent on some cheeses. Other costs from additional Brexit red tape will accrue regardless of whether there is a deal.

Industry insiders expect the big chains to hold back from passing the cost on to customers in the initial period after transition, but it is likely that as soon as one breaks ranks the others will follow.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said it was imperative for negotiators to finalise a zero-tariff agreement to protect shoppers from a hit to their purses.

“Time is running out and every passing hour makes it harder for retailers to prepare effectively for the end of the transition period,” warned Mr Opie.

“While retailers are doing everything they can to prepare – increasing stocks of non-perishable items and looking at alternative supply routes – there is still much that relies on understanding the future relationship between the UK and EU.

“Both sides must double down and do what is necessary to agree a zero-tariff agreement, otherwise consumers are likely to see higher prices for many essentials in 2021.”

Responding to the call for a grace period, a government spokesperson said:  “As we have seen this year, the UK has a large, diverse and highly resilient food supply chain which has coped well in responding to unprecedented challenges.

“We are in regular contact with the food industry to support its preparations for a range of scenarios, and will continue to work closely with them to ensure people across the country have the food and supplies they need.”

 

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