Western Mail

Support for businesses vital to safeguard post-Brexit survival

Dr Jack Price, Dr Craig Johnson and Dr Helen Tilley, of the Wales Centre for Public Policy, assess the many hurdles for businesses as the Brexit clock counts down...

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IN UNDER two weeks, Wales and the rest of the UK will see a new trading relationsh­ip with the EU, although what that trading relationsh­ip will be is not yet certain. This uncertaint­y means we are in for a period of even greater economic disruption from the start of 2021.

But it is not just uncertaint­y. Businesses are just as concerned about the impact of new border arrangemen­ts and the loss of European funding.

Also, the UK’s Internal Market Bill could still change the shape of the devolution settlement.

The Welsh Government will have to make sure it supports businesses with clear guidance. Equally important will be logistical and financial support, with many businesses already struggling because of the coronaviru­s pandemic.

Our Wales Centre for Public Policy report – released last week – shows that businesses need time to prepare and make changes, and last-minute negotiatio­ns and an ever-shifting regulatory landscape have made this exceptiona­lly difficult.

Depending on what deal is agreed, if a deal is agreed at all, businesses that export to Europe might have to fill out customs declaratio­ns and make sure they comply with European regulation­s.

For a lot of businesses, this will be the first time they have to do this.

Customs intermedia­ries can help businesses deal with these new burdens, especially smaller businesses which don’t have staff dedicated to these sorts of requiremen­ts.

However, there is a skills shortage, so the Welsh Government could usefully support the recruitmen­t and deployment of more staff where they are needed.

Extending the grace period to more businesses could also help firms to adjust, recognisin­g that many will break the rules without realising it when new arrangemen­ts kick in.

This is partially because it has not yet been decided what new rules will apply, and when. This would help avoid major disruption.

There is also a chance that critical port infrastruc­ture will not be ready in time.

Goods coming into Britain through Holyhead might be turned back if they don’t have the right paperwork.

And internatio­nal passengers who arrive in Fishguard could face long waits if adequate passport control is not put in place.

Border delays could also mean fresh produce – things like fish or dairy products – spoiling in transit, which would hurt the Welsh fish and agricultur­al industries.

Some of the scenes we have seen at Felixstowe this year, with ships unable to dock, could become more common.

This would make it harder for Welsh factories to produce things like cars or aeroplane wings, and could also mean delays in importing consumer goods. Emergency funding from the Welsh Government could help to support businesses that have been significan­tly disrupted.

Agreement on the Northern Ireland protocol – the way that moving goods to and from Northern Ireland will operate – does mean that some of these issues will be resolved in the short term for some businesses. But these are all time-limited, and new long-term arrangemen­ts will need to be agreed early next year.

Wales has benefited from EU funding in the past.

In sectors like tourism, where a lot of businesses are small and familyrun, EU funds have helped support rural livelihood­s.

Although the UK Government has committed to matching these funds on a UK-wide basis, we don’t yet know whether Wales will get the same amount and who will be in control of the pot.

The UK Internal Market Bill has received lots of coverage with regard to internatio­nal law, but it also presents significan­t issues for the devolution settlement.

It has recently been amended to more strongly acknowledg­e the Senedd’s right to set different regulatory standards to those in England.

But it still gives the UK Government wide-ranging powers over some spending decisions in Wales. How it is implemente­d, and how the UK Government chooses to use its new powers, could still lead to arguments and disputes in the future.

There are some opportunit­ies for Wales, including control of fishing quotas and agricultur­al subsidies. New state aid rules could allow government­s to better support innovation and business growth.

And new trade deals with other countries could open new markets for Welsh goods, although the trade benefits are small in comparison to the EU.

However, to take advantage of these opportunit­ies, the Welsh Government will need to be ready to support businesses through a difficult transition period.

Dr Jack Price is a research officer, Dr Craig Johnson is a research associate and Dr Helen Tilley is a senior research fellow, all at the Wales Centre for Public Policy.

 ??  ?? Shipping containers are unloaded from a cargo ship at the Port of Felixstowe in Suffolk. The UK’s busiest port is struggling to deal with the congestion as other businesses are bringing in items before the end of the Brexit transition period on December 31, when customs checks with the European Union are expected to cause even more delays
Shipping containers are unloaded from a cargo ship at the Port of Felixstowe in Suffolk. The UK’s busiest port is struggling to deal with the congestion as other businesses are bringing in items before the end of the Brexit transition period on December 31, when customs checks with the European Union are expected to cause even more delays

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