No-deal Brexit news: Brits not doing enough to prepare for no-deal exit, Government papers show

Theresa May at a recent meeting with Jean-Claude Juncker
Getty Images
Jacob Jarvis26 February 2019
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Brits are not doing enough to prepare for a no-deal Brexit, the latest Government papers show.

A report presented to Theresa May's Cabinet suggests the public and businesses are simply not ready for a possible no-deal Brexit on March 29.

The document, drawn up to inform Cabinet ministers of the likely implications of a no-deal Brexit, said "many businesses in the food supply industry are unprepared for a no-deal scenario."

It also said that there is little evidence that businesses are "preparing in earnest for a no deal".

The document also says evidence suggests that the public are not performing administrative tasks to prepare for no-deal such as renewing passports or applying for driving permits to drive in EU states.

The document was released in response to demands from former Tory backbencher and now a member of The Independent Group Anna Soubry.

The Standard has looked at some of the key aspect of the document.

Nobody is ready for no-deal

Despite the Government saying it has cranked up its no-deal plans and widely suggesting people do the same, it appears the advice is not being followed.

Brexit Secretary Stephen Barclay has spoken frequently of no-deal preparation REUTERS)
REUTERS
  • The public is not ready

According to the document: “Evidence suggests that individual citizens are also not preparing for the effects that they would feel in a no deal scenario.”

It warns that people need to complete multiple administrative tasks if they are travelling to or living in the EU. This includes renewing passports and also applying for international driving permits to be able to drive in EU states.

Despite the touted issues 55 per cent of UK adults think a no-deal exit will not affect them, according to the Department for Exiting the European Union.

  • Businesses are not ready

Businesses are not ready either, as the document states: “Despite communications from the Government, there is little evidence that businesses are preparing in earnest for a no deal scenario, and evidence indicates that readiness of small and medium-sized enterprises in particular is low.”

While in regards to the food issues it also said "as of February 2019, many businesses in the food supply industry are unprepared for a no-deal scenario”.

Using the example of an Economic Operator Registration and Identification, which businesses will need for EU imports, the document remarked those signed up for these was way off target.

Only 40,000 EU-only trading businesses have got one, compared to an estimated 240,000 by this point.

  • The Government is not ready

Despite the warnings it has widely promoted, just over two-thirds of the Government's most critical preparation projects were "on track" for completion in time.

While fewer than 85 per cent overall were ready for the scheduled date of Brexit on March 29, it said.

Food shortages and higher prices

There are likely to be issues with Channel crossings 
EPA

The document states one of the most visible ways the UK would be affected is by delays in food supply.

Though it says there will not be an “overall shortage of food” certain products will be in high demand.

This could lead to prices going up, while panic buying could then create more problems.

  • Problems with the Channel

Potential disruption to cross-Channel trade "would lead to reduced availability and choice of products", the document stated.

“At the time of year we will be leaving the EU, the UK is particularly reliant on the Short Channel Crossings for fresh fruit and vegetables,” it states. “In the absence of other action from Government, some food prices are likely to increase, and there is a risk that consumer behaviour could exacerbate, or create, shortages in this scenario.”

Theresa May updated MPs on Brexit progress in the Commons on Tuesday
PA

However, it noted less than one in 10 food items would be directly affected by any delays across Dover and the Eurotunnel.

The flow of goods between these methods could be “significantly reduced for months”.

Cost of £13bn per year for new customs checks and a smaller economy

If Britain leaves without a deal in place, it will be necessary for extra customs rules and VAT to be applied to goods moving between the UK and the bloc, according to the report.

The administrative costs of this alone would cost businesses £13billion each year, the Government paper estimates.

Mark Carney of the bank of England previously stated the economy would be reduced
Getty Images

That states it is “not accounting for any behavioural change”, which does not explain whether that could increase the cost even further.

It highlights that businesses with supply chains reliant on the EU “would face additional costs and burdens as a result of new customs procedures, compliance requirements and reductions in traffic-flow across the Channel”.

However, it states that France appears to be willing to ensure trading can be conducted smoothly at its crossings.

Business ‘failures’ and other problems in Northern Ireland

Northern Ireland is deemed to be the worst affected area in Britain, with the impact also set to last longer.

The document states: “Overall, the cumulative impact from a ‘no deal’ scenario is expected to be more severe in Northern Ireland than in Great Britain, and to last for longer.”

Businesses could crumble or simply relocate due to the issues, the document suggests.

The Irish border has been the main obstacle in Brussels
PA

"There is a risk that businesses in Northern Ireland will not have sufficient time to prepare," it said.

"This could result in business failure, and/or relocation to Ireland with knock-on consequences for the Northern Ireland economy and unemployment."

Attempts to ensure no hard border will have to be engaged while there could also be an increase in “smuggling and associated criminality” over the crossing between Ireland and Northern Ireland.

Travel complications for Britons on the mainland

As well as some people needing to renew their passports, travel within the EU could be slowed down, according to the document.

Nationals will be treated as “third country nationals”.

In practical terms that means not being able to use e-gates, slowing down entrance to countries left in the EU.

Reaction to the report

Much of the information and analysis contained in the paper, released in response to an amendment tabled by Independent Group MPs Chuka Umunna and Ms Soubry, was already in the public domain.

But Mr Umunna said it painted "a disastrous picture of the catastrophe which would befall our country if there is a no-deal Brexit".

The documents emerged 31 days ahead of the scheduled date of Brexit, and hours after Mrs May told MPs that they will be given a chance to vote on delaying EU withdrawal.

Mr Umunna said: "In light of what she knows, it is utterly irresponsible for the Prime Minister to keep a no-deal Brexit on the table given the extreme damage it will do.

"These papers set out how food prices will rise, we may see panic buying, there will be severe disruption at the border, and jobs and livelihoods would immediately be put at risk.

Labour MP Martin Whitfield, a supporter of the Best for Britain campaign for a second referendum, said: "These are truly shocking admissions by a Government looking to abdicate responsibility for the oncoming chaos.

"We've known for a while that businesses aren't ready for Brexit and that it's disrupting their work already - big or small.

"Now we know a third of the most critical Government projects aren't ready, while the economy is due to shrink.

"The Government has full ownership of this mess.

"By refusing to take no-deal off the table, the Government is threatening to plunge us into the abyss.

"We need to stop a no-deal catastrophe and put the final say over Brexit to the public."

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