There is now a little over 7 months left before the UK is due to leave the EU. I continue to believe that the most likely outcome is a last minute cobbled together deal that leaves the UK following rules that it no longer plays any part in setting. A bad enough outcome. The stubborn insistence of many Brexiteers in believing their own propaganda regardless of the facts has, however, made a no deal outcome a serious possibility. So the guidance given to business on how to prepare for that is seriously important. And it matters that it is so bad.
Below are some of the actual pieces of advice issued by the UK government to British business in an official publication, followed by some of the main questions that this guidance provokes.
1. “Before exporting goods to the EU, a business will need to register for a UK Economic Operator Registration and Identification number. … familiarise yourself with this process”
How long will it take for business to become familiar with this extra paperwork and apply? How long will it take the relevant government department to process the application and issue a number? How many smaller businesses will struggle to meet the deadlines? How many extra staff has the Civil Service trained to do this job?
2. A business will need to “ensure their contracts and International Terms and Conditions of Service (INCOTERMS) reflect that they are now an importer”
How long will it take an importing or an exporting business to review and change every one of its contracts? What happens if the person you are contracting with doesn’t want to change the contract? How many businesses won’t be able to import or export legally in April next year? Who needs these goods and services? Who relies on these sales?
- A business will need to “consider how they will submit import declarations, including whether to engage a customs broker, freight forwarder or logistics provider (businesses that want to do this themselves will need to acquire the appropriate software and secure the necessary authorisations from HMRC)
What is the extra cost of all this? How many companies are there with the trained staff and the physical capacity to do this work? How long does it take to write the software and to train staff in new software systems and when will that work start?
- A business will need to “pay Value Added Tax (VAT) and import duties including excise duty on excise goods unless the goods are entered into duty suspension (for example a customs or excise warehouse – a financial security will be required to cover the duty liability of the goods whilst they are being moved to the warehouse”
How will customers react when they are faced with higher prices to pay these tariffs? Where are the additional warehouses at every export and import point? How are smaller firms expected to provide the up front payments for the required financial securities?
- “Businesses may also need to apply for an import licence or provide supporting documentation to import specific types of goods into the UK”
How many businesses have started to apply for such licences? What goods might have to be held in storage whilst the necessary documents are obtained? What will happen to perishable items both imported and exported?
- “Carriers (for example hauliers, and train, vessel or aircraft operators) will need to make a Safety and Security Declaration for goods moving between the UK and EU. A carrier is generally required to submit an EXS to the customs authority of the country from which the consignment is being exported.”
How long will it take for transport firms to set up systems and train staff to complete these declarations? How long will it take to check these declarations at ports? How many civil servants have been trained at ports to check those documents? Where do the lorries and containers go whilst they are waiting to be processed?
- When it comes to Northern Ireland the advice is “if you trade across the land border, you should consider whether you will need advice from the Irish government about preparations you need to make”
Why can’t the UK government give business any useful advice about trading on the island of Ireland post Brexit? In what world is it OK for the UK government to give up making decisions and simply ask businesses to ask another government for advice because it can’t give any?
Rarely has a guidance document issued by the UK government left UK businesses with so many problems to solve, so little time to solve them and so little helpful guidance about how to do so. There is an utter contrast between the stark reality of these serious practical problems faced by business and the naïve optimism of gung ho Brexiteers that “no deal is better than a bad deal”. No deal is a very bad deal and we are staring into the face of it.
The problems that business is going to face if there is a no deal will impact directly on the lives of ordinary people. What you eat, what prices you pay, how secure your job is and even what medicines you can take are all at risk in the no deal Brexit which has suddenly become a serious prospect.
How many people were told that when they voted in the referendum? Why is it right that people should be allowed a referendum on whether they like promises or threats but not right that they should be allowed a referendum on the real deal on offer?
Rather than trying to answer this question, political fanatics with no serious business experience such as Boris Johnson have been quoted as saying “bugger business”. They may be about to get their wish. The rest of us are entitled to second thoughts about the attractiveness of what is on offer.