Department of International Trade’s lack of expertise could de-rail Brexit.

London

Business and commerce the length and breadth of the UK needs clarity from the Government on their preferred and backup options for Brexit.  Last week, we reported on the scope of the regulatory changes that organisations will have to adapt to – more than 500 workstreams identified across Government Departments. 

Many of these will drive IT changes – and all of which will need to have new processes and systems in place and tested.  In the event that the Prime Ministers’ often quoted ‘nothing is agreed until everything is agreed’ as the outcome of the UK-EU negotiations, this could mean all the changes coming into effect at precisely 23:00 on 29 March 2019.

Previous blogs of ours have highlighted two departments that shoulder a heavy burden of the changes, as testified to Parliament in the number of workstreams that they need to commission – Defra and Department of International Trade (DIT).  Evidence from representatives of the key sector in international trade has, this week, thrown further doubts as to whether sufficient expertise and resources are available to complete the required tasks can be completed in the time available.

“Chronic mismanagement", together with a lack of expertise within Liam Fox's Trade Department (DIT) could: “completely derail the government's Brexit trade plans” according to Maritime UK - the group representing Britain's maritime sector and covering shipping, ports, and marine services.

David Dingle, chairman of Maritime UK said: "We - and countless other sectors - are falling victim to the lack of strategic vision and ambition that seems to be rife in the Department for International Trade."

Britain's maritime sector transports 95% of Britain's international trade, directly employing 185,000 people.

Liam Fox has previously suggested the sector would play a crucial part in Britain's post-Brexit success.  "The UK’s maritime industry brings billions of pounds a year into our economy and will be vital to our continued prosperity when we leave the European Union."

Ben Murray, director of Maritime UK, said in a statement that there was "a chronic lack of direct industry experience" within the DIT, and criticised the department for hiring trade staff who had not previously worked within the maritime sector.

The DIT is tasked with striking new trade deals and rolling over existing ones - as well as promoting Britain's exports after Brexit. A DIT spokesperson said: "Our specialist expertise helped the UK’s innovative maritime companies to secure hundreds of millions of pounds worth of deals across the globe last year, helping British companies to attend high profile international events such as the Miami International Boat Show and the Dusseldorf boat show in the process."

The European Commission in April 2018 said it was "deeply concerned" over the DIT’s incompetent handling of trade deal rollovers," and "failure to grasp basic concepts and trade-offs."

 The Times has calculated that British negotiators will need to renegotiate over 40 trade deals currently in place between EU and other countries – and may have only a few weeks available to do so.

The Institute of Directors Edwin Morgan said that: "Businesses need clarity about the government’s objectives to help them to plan.  Everything is still subject to negotiation with the EU - but we don’t yet know what the UK will pushing for in key areas like customs.” He expressed concerns that the sorely needed and explicitly promised clarity will be published ahead of the critical June 2018 EU Summit and whether:  “the government's forthcoming White Paper will make clear their intentions on VAT, customs and regulatory alignment" in order to understand foreseen areas of continued harmonisation with EU rules - and where they may diverge.

Brexit Partners Opinion:

Brexit Partners shares the now widely expressed concerns.  The internal “wrangling” within the Cabinet reported by the BBC today, 7 June 2018, adds insult to the injury of the paucity of information for industry, commerce and business on what they need to do to prepare for Brexit.  Even if DIT does prove to have the ability to complete its program - organisations need time to plan and implement their own responses. 

It is a terrifying prospect that late and potentially untested Government IT systems will be rushed into operation – with the chaotic and potentially catastrophic consequences for businesses of all size and scope.  No business will be unaffected, and the we have good reason to believe the conclusions from Trade Bodies such as the CBI and Confederation of Chambers of Commerce, that perhaps one third of the country’s SMEs will not survive the tsunami of regulatory and legislative changes arising from the UK’s Withdrawal from the European Union.

John Shuttleworth is a Partner with Brexit Partners