February 15, 2019
UK firms have accused the British Government of leaving them “hung out to dry” in the event of a no-deal Brexit amid fears of economic catastrophe. With 29 March scheduled to be the date the UK leaves the EU, the British Chambers of Commerce warned 20 key questions remain unresolved. Key issues are how to move skilled staff between the UK and EU, which rules to follow, and what trade deals will be in place are all still unknown, said the British Chamber of Commerce.
UK firms not prepared
The Organisation – which represents thousands of firms – says its members are “hugely concerned” that the UK is not prepared for all eventualities. The business lobby group also warned that the lack of clarity over what will happen had already “stifled investment and growth”. “There is a very real risk that a lack of clear, actionable information from government will leave firms, their people and their communities hung out to dry,” said the British Chamber of Commerce’s Director General Adam Marshall.
Mr Marshall said firms remained “in the dark” over crucial issues including contracts and customs tariffs. Businesses need answers they can base decisions on, no matter the outcome,” he added.
Bank of England warnings
The business group’s warning comes after Bank of England Governor Mark Carney urged MPs to solve the current Brexit impasse. Mr Carney warned a no-deal Brexit would create an “economic shock” at a time when China’s economy is slowing and trade tensions are rising. “It is in the interests of everyone, arguably everywhere” that a Brexit solution is found, he said.
Official figures just released showed that the UK economy had expanded at its lowest annual rate in six years last year, with many economists blaming Brexit for the slowdown.
Which rules will apply?
But as the situation changes day by day in the run up to the Article 50 March 29 deadline, the Government said it was focused on getting approval for the Brexit deal negotiated with the EU.
Prime Minister Theresa May is currently seeking changes to her Brexit deal with the EU after it was rejected by the UK Parliament last month. The Government needs to get a deal approved by Parliament by 29 March to avoid a no-deal Brexit. In that case, regarding the countries where the UK had no formal trade agreement with, both would have to trade under the rules overseen by the World Trade Organization. Under this system, every WTO member is free to negotiate its own tariffs – or taxes – on different goods. But under the rules, members have to offer the same tariff to every other WTO country.
The UK has signed “continuity agreements”, which mean there will be no disruption to trade, with Switzerland, Chile, The Faroe Islands and Eastern and Southern Africa. As a result free trade agreements currently in place between the EU and those countries will apply to the UK after Brexit. Mutual recognition agreements – where a product lawfully sold in one country can be sold in another – have also been signed with Australia and New Zealand.
Labour has accused Mrs May of cynically running down the clock. It claims the Prime Minister is planning to delay the final binding vote on the withdrawal deal that she agreed with the EU until the last possible moment so that MPs will be faced with a stark choice between her deal and no deal.
Labour’s Sir Keir Starmer said there was “a growing frustration” around Mrs May’s handling of the Brexit process. “She’s coming to Parliament every other week, pretending there’s progress, and trying to buy another two weeks Parliament needs to say that’s not on”.
Meanwhile the Brexit Secretary of State Stephen Barclay has played down a report that Theresa May could force MPs to choose between backing her deal or accepting a delay to EU withdrawal.
Chief UK negotiator Olly Robbins was reportedly overheard in a Brussels bar saying the EU was likely to allow an extension to the Brexit process. But Stephen Barclay said this did not reflect government policy. The Government is committed to Britain leaving the EU on 29 March, he added. His comments come after Theresa May set out plans to bypass Commons rules, in order to get a Brexit deal ratified in time.
The Prime Minister told MPs she would lift the requirement for a 21-day period before any vote to approve an international treaty. It means she could delay the final Brexit vote until days before the UK is due to leave the EU. Her office at Number 10 Downing Street insists Mrs May will hold a vote on her deal as soon as possible.
But Labour Leader Jeremy Corbyn accused her of “running down the clock” in an effort to “blackmail” MPs into backing her deal. His party’s Brexit spokesman Sir Keir Starmer is to meet Cabinet Office Minister David Lidington to discuss Labour’s Brexit proposals.
The Government has indicated it is willing to make concessions on protection for workers; but Labour’s push for a closer future customs relationship than Mrs May proposes remains a sticking point. Mrs May has promised to return to the Commons on 26 February with a further statement – triggering another debate and votes the following day – if a deal has not been secured by that date.
The Irish border problem
If a deal is agreed, MPs will have a second “meaningful vote”, more than a month after Mrs May’s deal was rejected in the first one. Meanwhile, Mrs May has told MPs she was discussing a number of options with the EU to secure legally-binding changes to the backstop – the “insurance policy” designed to avoid the return of customs checkpoints on the Irish border. These included replacing it with “alternative arrangements”, putting a time limit on how long it can stay in place, or a unilateral exit clause, so the UK can leave it at a time of its choosing.
Austria’s Government, meantime, has warned the most important issue was safeguarding the Good Friday Peace Deal in Northern Ireland. Continuing arguments go on about the so-called Backstop arrangements aimed at ensuring no border restrictions between Northern Ireland and the Irish Republic.
Trains to Europe still running?
In another development, trains will be permitted to use the Channel Tunnel for three months if the UK leaves the EU without a deal, under a proposed European Commission law.
The planned legislation will give the UK and France time to renegotiate the terms under which the railway service operates. The law must be agreed by the European Parliament and EU member states.
|Graham Bardgett is a Global Policy Institute Fellow. He has reported for the Los Angeles Post Examiner and Baltimore Post Examiner and is a former BBC Radio News sub-editor in London and Veteran reporter of the Northern Ireland Troubles and Peace Process. He had five years on the news desk of BBC Northern Ireland, nine years as a security reporter on the Belfast Telegraph, four years as Ireland staff reporter for the Daily Mail, and was a correspondent for the Financial Times, Daily Mirror, Sunday Express, and Irish Daily Mail. During his career he has also reported from Berlin, Luxembourg, and Rome, and carried out public affairs critical incident consultancy work in Kazakhstan and in London. He had four years with PwC international accountants and consultants; and was previously a UK Government Higher Executive Press Officer.
The views and opinions expressed in this issue brief are those of the author.