As we reach yet another
But for retailers, it is already one minute to midnight and in some cases beyond midnight, as they are having to make contingency plans for No Deal.
Already, time and considerable sums of money have been spent on preparations that are prudent, timely and essential – time and money that can never be recovered.
Much of the focus has rightly been on the impact that higher tariffs might have on consumer prices in the UK, and the additional costs for UK goods moving to the EU.
Already, time and considerable sums of money have been spent on preparations that are prudent, timely and essential – time and money that can never be recovered. Stock image
Consumers have already endured the burden of higher prices for imported goods following the fall in the value of the pound since the 2016 referendum.
The impact of new non-tariff barriers in the event of disorderly UK exit deserves equal attention.
Research shows that the cost of non-tariff barriers under a No Deal Brexit would be substantially higher prices – the equivalent of a 29 per cent tariff on food import costs and 7 per cent for non-food products.
These increases arise as a result of regulatory burdens, higher transit costs and delays associated with trading with the EU as a third country.
What kind of new regulatory burdens do we mean here? As the UK becomes an independent member of the Common Transit Convention – which is there to help cross-border trade – goods will have to be scanned for compliance purposes on journeys to and from the UK.
There could be inspections of hauliers’ certifications in their vehicle cabs. The Government has attempted to minimise this but according to a recent National Audit Office report on UK border readiness, the lack of infrastructure for such moves would likely pose additional delays here for businesses.
For meat, fish and dairy products, although the Government has proposed a period of no checks for inbound produce from the EU, Brussels laws require sanitary and phytosanitary checks for such third country produce moving in the other direction.
For meat, fish and dairy products Brussels laws require sanitary and phytosanitary checks for such third country produce moving in the other direction. Stock image
These involve 100 per cent documentary checks of consignments, 20 per cent physical checks of consignments of beef, pork, and lamb, and 50 per cent physical checks of consignments of poultry.
Delays in Calais last week provided a taste of the disruption to come. Thirty-eight per cent of all the UK’s food imports from the EU passes through Dover/Folkestone and Calais – and this proportion is even higher for fresh foods.
Meanwhile, the same lorries that deliver EU produce to the UK will cross back from Dover to Calais to export UK goods to the EU. This means that any delays in one direction cause delays in the other.
And checks on goods affect not only individual lorries, but all those behind them.
Moreover, it is unclear if the Border Inspection Post at Calais will be ready to handle more than 8,000 lorries a day by the exit date. The Irish land border and the movement of products to the UK mainland is even more of an issue.
Meanwhile, the same lorries that deliver EU produce to the UK will cross back from Dover to Calais to export UK goods to the EU. Stock image
On VAT too, there remain concerns about the additional red tape that small overseas suppliers will face online. This presents a risk where the choice and availability of goods is concerned.
One of the facets of modern trade and business life is the flow of data between companies and suppliers, customers and stockists, and even different parts of cross-border businesses.
On a disorderly exit, flows of such personal data from our European trading partners cease to have a basis in EU law. In effect, as a third country, the UK would have to apply for approval for this from the European Commission. This could take more than six months.
Politics at Westminster is not a game. MPs need to recognise that their votes this week have crucial consequences in the real economy and both tariffs and non-tariff barriers will force consumers to pay the price of No Deal through higher prices and reduced availability.
Furthermore, MPs need to realise that willing the means is even more important than simply agreeing on the ends to avoid a No Deal Brexit. That should focus minds in Parliament – as March 29 looms closer by the day.
Military style plan to ‘feed the nation’ if we crash out
By Simon Walters
Supermarket chiefs have been summoned to crisis talks by the Government next week to combat fears of panic over food shortages if there is a No Deal Brexit.
Leaked documents seen by the Daily Mail show that major food retailers have been invited to a ‘feed the nation’ Brexit summit by ministers next Monday.
Supermarket bosses will be told to make military-style daily ‘conference call’ reports on food shortages to a Whitehall based Food Chain Emergency Liaison Group (FCELG) if the UK leaves the EU without a deal.
The calls will enable them to tell ministers if lorries with food imports are being held up at the Channel Tunnel or in other traffic jams, which towns and cities are in danger of running out of supplies and where there have been big price rises.
Ominously, the document warns of the risk of the ‘high frequency of disruption’ in getting food on to shelves.
The disclosures are in a leaked document from Michael Gove’s Department for Environment, Food and Rural Affairs (DEFRA) entitled Food Supply Flow and Rhythm for running a No Deal Brexit.
Using military-style language, it contains a diagram of DEFRA’s secret ‘Brexit ops [room] set up’ and says the aim is to ‘gather intel on the supply chain and provide information back on border flows’.
The disclosures are in a leaked document from Michael Gove’s Department for Environment, Food and Rural Affairs (DEFRA) entitled Food Supply Flow and Rhythm for running a No Deal Brexit
Although hopes were rising last night that Theresa May will get her deal through, Mr Gove has organised the meeting with the British Retail Consortium, which represents most big supermarkets including Waitrose, Asda, Morrisons, Aldi, Lidl, Marks & Spencer, the Co-op and Sainsbury’s.
Under Mr Gove’s plans, in the event of No Deal, the shops will take part in secret daily ‘30 minute rapid intelligence gathering on shortages, geographical issues, contingencies deployed, supply chain failures, financial difficulties and critical dependencies’.
The document says retailers’ food crisis updates must be filed by ‘late morning or lunchtime’ at the latest.
If a No Deal Brexit causes more disruption than expected they will have to do so more often: ‘The frequency [of the reports] will be dictated by level of disruption, [which is] likely [to be] high. There must be effective collaboration and communication.’
A well-placed source said: ‘A No Deal outcome means there is a danger of empty shelves in shops. That could cause panic among consumers. We have to be ready to minimise risks, react rapidly and prevent civil disorder.’
Although hopes were rising last night that Theresa May will get her deal through, Mr Gove has organised the meeting with the British Retail Consortium
The FCELG is the Government’s food and farming version of COBRA, the emergency group of ministers and police, Armed Forces and intelligence chiefs that meets in Whitehall in the event of terror threats.
The acronym COBRA is derived from the Whitehall committee room where it meets: Cabinet Office Briefing Room A. FCELG emergency sub-groups may be set up to deal with specific shortages such as of fresh produce. Fresh fruit and vegetables are among items most vulnerable.
Supermarket chiefs are ordered to give ‘high level data on stock levels, focus on staple food including chilled and fresh produce’ and ‘indicate [the level of] food supply across the UK’. Some Whitehall insiders say there is the possibility of using military trucks to keep food supplies moving.
To respond to worries that ruthless supermarkets may use a Brexit crisis to undercut their rivals they are told that they can speak to DEFRA in confidence on ‘commercially sensitive issues’.
A 120-strong ‘food supply unit’ team made up of senior Whitehall officials has been set up to co-ordinate the FCELG.
If Britain leaves without a deal, both sides will fall back on the World Trade Organisation’s ‘most favoured nation’ tariffs, which mean paying duties on each other’s imports and exports.
Some experts say it could see the cost of staple foods such as meat, cheese, sugar and orange juice double overnight. Brexiteers claim these are scare stories.
Brexit has caused rising friction between the Government and supermarkets. Retailers were told months ago to make emergency planning including ‘super depots’ to cope with shortages in the event of No Deal.
But some have failed to do so, arguing it will be a waste of money if the Prime Minister’s deal is approved.
The issue has also led to fierce Cabinet infighting. Mr Gove has argued for tariffs on key agricultural produce to be kept low to protect British farmers from cheap imports of New Zealand lamb and other produce.