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Deal or no deal, UK businesses need a period to adjust to new Brexit trade rules after January

Get ready for Brexit? With so many questions remaining unanswered, British businesses are unable to prepare for the end of the transition period – and it is entirely the government’s fault

Ed Davey
Monday 07 December 2020 18:50 GMT
Brexit: What is changing from January 1 2021?

“Get ready for Brexit” – that was the £100m taxpayer funded advertising campaign the UK government embarked on last year. But with just a few weeks to go until the end of the transition period, British businesses are nowhere near ready for Brexit and it is entirely the government’s fault.

It turns out that slogans and adverts are no substitutes for details and decisions, when it comes to exporting goods or navigating new customs rules. Staggeringly the British Chamber of Commerce says there are as many as 24 fundamental questions that remain unanswered for business, with just 24 days to go before the end of the transition period.  

Whether a deal is concluded in the coming days or not, one thing is clear: businesses need more time to prepare for our new trading relationship with Europe. With so many fighting just to survive the pandemic, the government must put British jobs and business first: they must urgently negotiate an adjustment period with the EU, to help every British business trading with our European neighbours.

I don’t apologise for the fact that I have said similar things before. At the beginning of the year, Liberal Democrats warned the government that 10 months was not enough time to negotiate the most dramatic shift in trading relations in British history. And that was before coronavirus struck.

Now businesses simply cannot afford to be hit while they are down. Job losses are already mounting and further unemployment looms as the government prepares to withdraw vital support schemes, like furlough and business rates relief, early next year.  

In normal times, keeping businesses in the dark about crucial information they need to trade in just a few weeks time would be shambolic. With the economy on its knees already, it is unforgivable.

Exporters still don’t know what rules of origin will apply; there is no clarity about how goods will be traded from Great Britain to Northern Ireland, while key customs software remains unready; and food and drink exporters still don't know how they should label their products.

Unanswered questions like these hold businesses hostage and keep them from preparing for the end of the transition period.

Brexit negotiations have reached a critical moment, says Mordaunt

Picture this. You sell whisky to the Germans. You have a big order due to go out next month but you have no idea what labels need to go on your products yet and the paperwork might change overnight. If you get it wrong, your hauliers can be hit with fines at the borders. All the while, with hospitality trade collapsing around the world, you are faced with the horrifying prospect of sending out redundancy letters before Christmas.

It is not too late to stop this catastrophe. Deal or no deal, it makes sense for businesses in the UK and Europe to be afforded more time to prepare for the change that is coming.  

Phasing in the new rules, regulations and procedures of a potential deal would give our businesses time to adapt. The UK would also have time to prepare for new logistical burdens at the border.

In the event that the government fails to conclude a trade deal with the EU, it must again seek to negotiate a six-month adjustment period during which the UK continues to trade under the present arrangements. This window would be a small but crucial help for businesses to cope with the immense difficulty of trading under WTO rules.

The prime minister seems to have a habit of creating empty slogans. Get ready for Brexit rings hollow when businesses ask “how” and the answers are not forthcoming. But there is still an opportunity left to act in the best interests of British businesses.

Whatever happens in the coming days, at the very least, the government must secure a time-bound adjustment period to allow firms to adapt to new trade arrangements and save jobs.

Ed Davey is leader of the Liberal Democrats

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