The Government admitted 200,000 firms that trade with the EU are not ready for a no deal
The study from the Brexit department also found citizens are ignoring no deal warnings and failing to make sure they are ready for a no deal.
It said no deal would cause delays at the border – potentially meaning shortages and prices rises for some food, particularly fresh produce not in season in Britain.
The report warns panic buying could fuel shortages in foods that are shipped across the Channel.
Ahead of the publication of tonight’s report
But she told MPs: ‘I believe that if we have to, we will ultimately make a success of a No Deal.’
The Prime Minister made a screeching U-turn today and admitted no deal could only happen if MPs voted for it – and said MPs could demand a delay to Brexit instead.
Independent Group MP Chuka Umunna said tonight’s report showed the ‘disastrous’ impact of no deal on Britain.
Ahead of the publication of tonight’s report Theresa May (pictured today in the Commons) admitted it would be an ‘honest assessment’ of the ‘serious challenges’ facing Britain after no deal
Independent Group MP Chuka Umunna (pictured yesterday in Westminster) said tonight’s report showed the ‘disastrous’ impact of no deal on Britain
The shock Government paper took a swipe at businesses trading with the EU, saying just a sixth of firms trading with EU states had obtained a vital document.
What does the new report on no deal say?
The Government tonight published a report on Britain’s no deal preparedness with just 31 days to go. It says:
- Just 40,000 of 240,000 exporting businesses that trade only with the EU are ready
- Businesses face an extra £13billion in costs as they deal with customs controls for the first time
- Citizens have ignored warnings to get ready and could face huge queues at airports
- Fresh food imported from the EU could see shortages and price rises
- Panic buying could make the situation even worse
- EU tariffs could add 70 per cent to the cost of imported beef and 45 per cent to the cost of lamb
- Northern Ireland would be hit harder and for longer by no deal chaos
- Major industries – particularly car making – would hit hard by delays in the arrival of parts amid queues at Dover
After Brexit they will require an Economic Operator Registration and Identification (EORI) number to continue to export as the UK will become an external so-called ‘third party’ state.
In a damning statement the paper lays the situation bare, saying: ‘As an EORI number registration is one of the most basic and straightforward parts of the process most businesses would need to undertake to prepare for no deal, this is assumed to be a generous indicator of overall readiness.
‘As of February 2019 there had only been around 40,000 registrations for an EORI number, against an estimate of around 240,000 EU-only trading businesses.
‘In practice, the UK’s approach is based on, in the short-term, allowing hauliers to pass through the border without stopping, but they would be stopped if taking goods into France without the right paperwork.
‘The lack of preparation for EU controls – of which this is an example – greatly increases the probability of disruption.’
However it also said that the Government can process up to 11,000 EORI applications per day, so there is time for firms to act before March 29.
Consumers could face a bun fight over fresh fruit and vegetables as shortages of some foods kicks off a surge in prices – and are made worse by greedy consumers stockpiling them, the paper revealed.
It said no deal would cause delays at the border – potentially meaning shortages and prices rises for some food, particularly fresh produce not in season in Britain (pictured are lorries queuing at the Port of Dover)
There will not be an ‘overall’ food shortage, it revealed, with less than a tenth of ‘foods items’ ‘directly affected by any delays’ across the Channel – but there could be shortages or prices rises on imported goods
Some 30 per cent of UK food comes from the EU and it added: ‘Although our food supply is diverse, resilient, and sourced from a wide variety of countries, the potential disruption to trade across the Short Channel Crossings would lead to reduced availability and choice of products.’
There will not be an ‘overall’ food shortage, it revealed, with less than a tenth of ‘foods items’ ‘directly affected by any delays’ across the Channel.
But it continued: ‘However, 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.
‘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.
‘As of February 2019, many businesses in the food supply industry are unprepared for a no deal scenario.’
Tonight’s report warns Britons could be stuck in queues at airports as many have failed to complete basic ‘administrative tasks’ to prepare for a no-deal Brexit
Car manufacturing could also be hit as just-in-time supply chains are hurt by delays at the border (pictured is the Nissan plant n Swindon facing closure)
The paper also took a swipe at UK citizens for failing to complete basic ‘administrative tasks’ to prepare for a no-deal Brexit – because they are not worried it will happen.
It cited passport renewal, applying for an international driving permit and obtaining a ‘car insurance green card’ as things which people either visiting or living in EU states needed to complete.
It said: ‘As of February 2019, despite a public information campaign encouraging the public to seek out the Government’s advice on preparing for a ‘no deal’, noticeable behaviour change has not been witnessed at any significant scale.
‘Based on DExEU survey data from January 2019, 55% of UK adults did not expect to be affected by a no deal exit.
‘Government judges that the reason for this lack of action is often because a no deal scenario is not seen as a sufficiently credible outcome to take action or outlay expenditure.’
The Government document stated that the introduction of tariffs and non-tariff barriers to trade in the case of a no-deal Brexit can be expected to have a ‘very severe’ impact on some UK industries.
The EU would introduce tariffs of around 70% on beef and 45% on lamb exports and 10% on motor vehicles. The impact on UK businesses ‘would be compounded by the challenges of even modest reductions in flow at the border’, said the document.
The document warned that ‘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’
It was ‘impossible to accurately predict the ability of businesses to adapt’, but the risk of no deal is ‘of major concern’ for the car industry, both because of tariffs and disruption to just-in-time supply chains.
The document stated that ‘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’.
It warned: ‘In a no-deal scenario there is an expectation of disruption to closely interwoven supply chains and increasing costs that would affect the viability of many businesses across Northern Ireland.
‘There is a risk that businesses in Northern Ireland will not have sufficient time to prepare. This could result in business failure, and/or relocation to Ireland with knock-on consequences for the Northern Ireland economy and unemployment.’
Independent Group MP Chuka Umunna said: ‘These documents – which The Independent Group of MPs have forced this Government to publish – paint a disastrous picture of the catastrophe which would befall our country if there is a no-deal Brexit.
‘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.’