EU PLANNING EMERGENCY MEASURES TO PROTECT IT AGAINST NO-DEAL BREXIT
▶ Five key British business associations that are ‘watching in horror’ warn of severe problems with trade if country crashes out of bloc without agreement
European officials outlined temporary measures to keep flights and goods moving in and out of Britain if London quits the EU without a deal in March.
But key British business associations said yesterday that their members were “watching in horror” as the UK approaches a no-deal scenario.
Brussels dashed hopes among some Brexit hardliners that the two sides could agree on a short-term arrangement by saying it would introduce its own rules without further negotiations with London.
The contingency plans would allow British planes to continue flights into and out of the EU. Other arrangements included approval for freight transport by lorries, limited financial and banking recognition and visa arrangements for British passport holders. The measures will only last for six to nine months.
Britain earlier announced it was carrying out its own “nodeal” planning and would add £2 billion (Dh9.3bn) to spending on contingency measures.
Amid deadlock over Theresa May’s proposed withdrawal agreement with the EU, the prospect of a hard Brexit has become likely by default.
Some of Mrs May’s Conservative colleagues warned they would quit the party whip if the government presses on with a no-deal, and sterling has come under renewed pressure over the damage to the economy.
The UK business groups yesterday issued a joint plea to the government to avoid a no-deal Brexit, warning there was “not enough time to prevent severe dislocation and disruption” before the deadline in March.
“Politicians have focused on factional disputes rather than practical steps that business needs to move forward,” said a critical statement by the The Confederation of British Industry, British Chambers of Commerce, Federation of Small Businesses, Institute of Directors and the EEF manufacturers’ association. The lack of progress in Westminster means that the risk of a no-deal Brexit is rising.”
The groups, which represent hundreds of thousands of businesses, said companies were putting costly contingency plans in place but many would not be ready in time if the UK crashed out of the EU without a deal on March 29.
“Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK,” they said.
The letter asked Members of Parliament to return to their constituencies over the Christmas break, talk to businesses and listen to their concerns.
Mrs May met her Cabinet on Tuesday to step up plans for a no-deal scenario, despite giving assurances that the deal she will put before parliament next month is her priority. As part of this plan, the revenue and Customs department is preparing a 100-page document to guide British businesses.
But some of Mrs May’s ministers are in favour of a “managed no-deal”, which would involve the government paying back owed cash to the EU to secure a transition period.
This approach is backed by Brexiteers Andrea Leadsom and Penny Mordaunt, but is viewed as “not a credible proposition” by the five business associations who warned of dire consequences.
“With just 100 days to go, the suggestion that a ‘no-deal’ can be ‘managed’ is not a credible proposition,” they said.
“Businesses would face massive new Customs costs and tariffs. Disruption at ports could destroy carefully built supply chains.
“From broadcasters to insurance brokers to financial services, the UK’s world-leading services sector will be needlessly disadvantaged and professional qualifications will be unrecognised across the EU.”
On Tuesday, former Brexit secretary Dominic Raab told
The Telegraph newspaper that he believed the government should offer tax breaks to businesses at risk from Brexit.
“The Treasury must prepare a Brexit budget to identify businesses most at risk from a departure on World Trade Organisation terms,” Mr Raab said.
“We should cut business taxes to boost them as they transition and offset the cost from the £39bn the UK would have paid the EU.”
There is not enough time to prevent severe dislocation and disruption before the deadline on March 29 FIVE KEY BRITISH BUSINESS GROUPS