Countdown to Brexit: 44 days – Severe consequences for businesses from "lack of Brexit clarity" surface

Brexit is now soaking up all available capacity of businesses as they prepare for the potential impact of a no-deal Brexit.   The Government has been asked as a matter of “great urgency” to pause all consultations on food, farming and environment issues. 

Leaders from 32 organisations representing thousands of businesses have written to Michael Gove MP, Secretary of the Department of Environment, Food and Rural Affairs – Defra - to express “deep concern” over the resources that they are having to divert to Brexit.

If agreed – and it is a compelling argument given that industry has to match the Government’s own deployment of 5,000 civil servants who are preparing new procedures and regulations that Brexit calls for – it will mean that consultations on Gove’s pet projects, such as a bottle deposit scheme, could be delayed.

“Businesses throughout the UK food chain – and their trade associations – are now totally focused on working to mitigate the catastrophic impact of a no-deal Brexit.  Large amounts of time, money, people and effort are being diverted to that end,” says the letter - signed by among others the National Farmers’ Union, the Food and Drink Federation and the International Meat Trade Association.

“At this moment of potential crisis for our industry, it cannot be ‘business as usual’ within Government.”  The letter – quoted in full below - lists 12 consultations that Defra has under way.

Meanwhile, the UK business trade body - the British Chamber of Commerce - has called for clarity on: import and export duties; border controls and customs procedures.  They have stated that thousands of companies will suffer “catastrophic shock” as the UK leaves the European Union.  BCC Director General, Adam Marshall said British firms face the biggest change to their terms of trade in over a generation – and with 44 days to Brexit, are doing so “without the information and clarity they need to navigate their forward course”.  The BCC list of 20 questions that need urgent answers are listed, below.

The message was endorsed by hauliers interviewed by the Radio 4 ‘Today’ programme.  They have been unable to obtain – and in some cases have been denied – the necessary licenses to continue to travel and trade with the EU from 30 March.  

The conclusion of the food and farming industry is now typical of industry and commerce in every sector.  They are formally requesting that consultations should be delayed - including: a tax on plastic items with less than 30% recycled content; further advertising restrictions on foods high in fat, salt or sugar; a national action plan on pesticides; and a clean air strategy.

They use the phrase “crisis management mode” – pointing out that Defra has been able to re-assign and recruit additional resources - they are not able to do so.

“Neither we nor our members have the physical resources nor organisational bandwidth to engage with and properly respond to non-Brexit related policy consultations or initiatives at this time. Government has recruited many extra staff; we cannot.”

“We very strongly urge you therefore to require of your cabinet colleagues that a range of current and planned consultations that will impact food and drink, some of which are expected shortly, are firmly and clearly placed on ‘pause’ until this uncertainty is over. A list of the relevant consultations of which we are aware is given in the appendix to this letter.

“If Government seeks to press ahead with these consultations it will be seen by some as a sign of bad faith and many organisations may decline to respond.”

Among those that also signed the letter – listed in full below, include: the Food and Drinks Wales Industry Board; the British Meat Processors Association; the British Poultry Association; Dairy UK; and UK Hospitality - representing all food sources, supply chain, hotels and restaurants.

The unique coming together of such a broad range of industry organisations is a sign of the deep frustration felt over the fact that there is not yet an acceptable deal before Parliament.  The announcement today from the Prime Minister that the earliest that a vote could be expected is 27 February will only add to this sense of frustration.

A spokesman for the Department for Environment, Food and Rural Affairs merely reiterated the increasingly hollow mantra - stating a deal remained the “top priority” and it was working with the industry “to help prepare for all scenarios”.  

There was no indication that Defra would pause consultations: “While we have intensified our no-deal planning, we are continuing to tackle other priority issues that matter to people - including our plans to reduce plastic waste and deliver a green Brexit”.

Background

BCC:  20 “unanswered questions”

  1. What tariffs will my company need to pay when importing goods to the UK from the EU and rest of the world?

  2. When will the UK government launch an official market access database to provide this information?

  3. If any trade agreements with third countries are operational on the day after Brexit, what rules of origin will I need to comply with?

  4. Will I still be able to fly people and/or goods between the UK and the EU after Brexit day – or could travel be disrupted?

  5. I know I will need to register for an EORI number. How simple will it be for me to register for any other new registration requirements or processes?

  6. How will my lead times be impacted by new customs procedures?

  7. Will any of the EU-FTA agreements be rolled over or replaced on a bilateral basis in the event of no deal?

  8. Will I be able to use any trade preferences with any markets?

  9. Will there be confirmation that I will be able to continue importing tariff free goods from developing and least developed countries under the generalised system of preferences after 29 March 2019?

  10. Will there be new safety and security requirements and inspections at the UK-EU border that my company will need to deal with? Where will inspections be held?

  11. What system will I be using to input customs data – will HMRC’s new Customs Declaration Service be ready in time for 29 March?

  12. What procedures will my company face trading between Northern Ireland and the Republic of Ireland?

  13. Will this be different to operating at any other UK border?

  14. Will staff spending longer than 90 out of 180 days in the EU be subject to further administration, costs or visas?

  15. Will my business be able to move skilled staff members between the UK and the EU after 29 March and if so, under what conditions?

  16. Which regulator will be overseeing my business after 29 March, and what rules do I need to follow?

  17. Is the UK government going to charge businesses for the creation of new regulatory agencies in the UK?

  18. If my company is in dispute with another in the EU, what form of resolution and means of redress will be available to my business after 29 March?

  19. Will my business have to pay roaming charges in the EU after 29 March?

  20. Will my business continue to be able to hold and transfer data and personal information without any interruptions after 29 March?

Letter from 32 Food and Farming Industry Groups

8 February 2019

To: Rt Hon Michael Gove MP Secretary of State Department for Environment, Food and Rural Affairs 2 Marsham Street London SW1P 4DF Dear Secretary of State

“As representatives of a very broad swathe of the UK’s farming and food & drink supply-chain, we are writing to you today on a matter of great urgency and of deep concern to our members. In fewer than 50 days, the UK will leave the European Union.  The legal default is that we will do so irrespective of whether or not we have signed a withdrawal agreement and, at present, that no-deal Brexit looks ever more the likeliest outcome.

Businesses throughout the UK food chain - and their trade associations - are now totally focused on working to mitigate the catastrophic impact of a no-deal Brexit. Large amounts of time, money, people and effort are being diverted to that end.

 At this moment of potential crisis for our industry, it cannot be ‘business as usual’ within Government.

Neither we nor our members have the physical resources nor organisational bandwidth to engage with and properly respond to non-Brexit related policy consultations or initiatives at this time. Government has recruited many extra staff; we cannot.  We very strongly urge you therefore to require of your Cabinet colleagues that a range of current and planned consultations that will impact food and drink, some of which are expected shortly, are firmly and clearly placed on “pause” until this uncertainty is over.  A list of the relevant consultations of which we are aware is given in the appendix to this letter. If Government seeks to press ahead with these consultations it will be seen by some as a sign of bad faith and many organisations may decline to respond. We are grateful for your assistance with this issue.”

Signatories to Letter:

  • Ian Wright CBE, Chief Executive, Food and Drink Federation

  • Paul Rooke, Head of Policy, Agricultural Industries Confederation

  • Andrew Pollard, President, Association of Bakery Ingredient Manufacturers

  • Pete Robertson, President, Association of Cereal Food Manufacturers

  • David Camp, Chief Executive, Association of Labour Providers

  • Chris Stemman’ Director, British Coffee Association

  • Walter Anzer, Director General, British Food Importers and Distributors  Association

  • John Hyman, Chief Executive, British Frozen Food Federation

  • Jack Ward, Chief Executive, British Growers  Association

  • Nick Allen, Chief Executive Officer, British Meat Processors  Association

  • Richard Griffiths, Chief Executive, British Poultry  Association

  • Declan O’Brien, Director General, British Specialist Nutrition  Association

  • Nick Bennett, Chairman, Council for Responsible Nutrition UK

  • Judith Bryans, Chief Executive, Dairy UK

  • Gordon Polson, Director, Federation of Bakers

  • James Bielby, Chief Executive, Federation of Wholesale Distributors

  • Nigel Jenny, Chief Executive, Fresh Produce Consortium

  • David Thomson, Chief Executive Officer, Food and Drink Federation Scotland

  • Andy Richardson, Chairman, Food and Drink Wales Industry Board

  • Graham Keen, Executive Director, Health Food Manufacturers’ Association

  • Liz Murphy, Chief Executive Officer, International Meat Trade  Association

  • Bob Price, Director and Policy Advisor, National Association of Cider Manufacturers

  • Terry Jones, Director General, National Farmers’ Union

  • Michael Bell, Executive Director, Northern Ireland Food and Drink Association

  • Dick Searle, Chief Executive, Packaging Federation

  • Andrew Curtis, Director General, Potato Processors’ Association

  • Andrew Kuyk CBE, Director General, Provision Trade Federation

  • James Withers, Chief Executive, Scotland Food and Drink

  • Simon Cripps, Executive Chairman, Seasoning and Spice  Association

  • James Smith, Chairman, UK Flavour Association

  • Kate Nicholls, Chief Executive Officer, UK Hospitality

  • Dr. Sharon Hall, Chief Executive, UK Tea & Infusions  Association

APPENDIX to the letter of 8 February 2019:

Food and drink-related policy consultations that we are expecting:

  • A Deposit Return Scheme for England & Wales (with links to Scotland and NI possibly)

  • A consistent national recycling collection service

  • An overhaul of the current Producer Responsibility programme, the Packaging Recovery Note system

  • Proposals for a tax on plastic items with less than 30% recycled content

  • Proposals to further restrict the advertising of HFSS foods and drink Farmers also have a particular concern about extending the mandate under ‘Making Tax Digital’ at this time.

Defra consultations, where consultation timetable should be paused:

  • Consultation on Protecting and Enhancing England’s Trees and Woodlands (consultation closes 28/02/2019)

  • Fitness Check of the Water Framework Directive and the Floods Directive (consultation closes 04/03/2019)

  • Improving our management of water in the environment (consultation closes 12/03/2019)

Expected consultations that should be delayed:

  • National Action Plan on the sustainable use of pesticides

  • Clean Air Strategy - urea fertiliser use

  • Consulting on a chemicals strategy

  • Setting targets for the 25 Year Environment

 
John ShuttleworthComment