UK business leaders warn of Brexit red tape 'tidal wave' even with deal

Business leaders have warned that a Brexit “tidal wave” of red tape is going to hit British industry on 1 January even if a trade deal is struck in the coming days.

The Confederation of British Industry deputy director general Josh Hardie pleaded with the UK and EU to redouble efforts to get businesses prepared, saying speed was now of the essence.

He said he was confident there would be a trade deal in the coming days, because to walk the UK and 27 EU countries over a cliff edge on 1 January would be a failure of politics.

“I find it almost impossible to believe that politicians on both sides would allow our countries to slip into no deal. The mutual interest in getting a deal has genuinely never been stronger post-pandemic – or mid-pandemic,” he said.

“Preparation doesn’t mean protection if a tidal wave is coming. You can put in place the sandbags, and that helps a bit, but the water is still going to get through,” he said.

As survey after survey shows businesses do not have the full information they need to be prepared for Brexit, Hardie urged the UK and EU to inform businesses what any trade deal would require them to do to be Brexit-compliant crossing from Dover to Calais, or any other UK-EU border.

“Once the free trade agreement is over the line, don’t breathe a sigh of relief and down your pens. Actually move on to the next thing, because this has some way to go,” he said.

Ben Fletcher, a director of Make UK, which represents manufacturers, predicted a period of hibernation for some businesses in early 2021.

“I think there is a lot of nervousness and a lot of uncertainty. Some firms are saying to us: ‘We’re just not going to attempt to move goods in and out of the country, because we want to see how the land lies in the first couple of weeks,’” he said.

Food and drink suppliers are particularly nervous of goods perishing, with Scottish politicians urging a “fish and chicks” policy to allow trucks carrying shellfish and day-old laying hens to get to the top of the queues likely to develop in Kent.

Business concerns come a week after a five-mile lorry queue developed on the approach road to the Eurotunnel in Folkestone as the French rehearsed Brexit checks.

Both Make UK and the CBI have called on the EU to state whether it will reciprocate on some of the “flexibility” being shown by the UK, which has decided to ease in Brexit customs and regulatory checks over six months to mitigate disruption.

Fletcher said some firms were so “physically and intellectually tired” that they simply did not have the capacity to “spend two weeks over Christmas reading a very, very complicated deal and getting advice on what it means for them, and attempting to update their systems”.

The CBI added that some critical information needed by business to prepare was outside the scope of the free trade agreement and needed to be agreed swiftly, including arrangements on cross-border data transfer, permits for business travel for engineers servicing machinery, and in particular rules of origin, which will determine what goods are defined as “British” and eligible for sale in the EU in a trade deal.

“Will businesses be fined for making honest mistakes at the borders? What about phasing in rules of origin changes?” asked Hardie.

A cohesive and concerted government and business effort to mitigate the queues and chaos will be critical in the countdown to 1 January and in the immediate aftermath.

“One of the things the pandemic has taught us is that when business and government work together the outcomes for communities are better. We need to apply that same rigour to the next two months. All of our shoulders to the wheel will move us further and faster than us doing it separately,” said Hardie.

With just 26 days to go to January, “every day matters”. He said it behoved everyone to get “those people who have sadly lost their jobs due to the pandemic” back into employment as soon as possible, and that needed a pragmatic post-Brexit approach.

“We need to get them back into work as quickly as possible to do that. We need businesses that can invest, to have a stable environment. So every day that is wasted [on not preparing for Brexit] is a day that actually communities are paying for,” he said.