Government urges businesses to prepare for Brexit as trade talks stall

21 October 2020, 08:38 AM
  • Brexit will take effect on 1st January 2021, but there is still uncertainty over whether the government will secure a deal with the EU to prevent high tariffs
Government urges businesses to prepare for Brexit as trade talks stall

The clock is ticking on the UK’s Brexit transition period, which is set to end on 31st December, and the government is urging businesses to take action to avoid disruption at the start of 2021.

“At the end of this year we are leaving the EU Single Market and Customs Union and this means there are both new challenges and opportunities for businesses. It is vitally important that businesses and citizens who have not yet taken action to prepare for the big changes which are coming do so now,” said Chancellor of the Duchy of Lancaster Michael Gove.

Business secretary Alok Sharma assured there will be no extension to the transition period, but he said the government would support businesses “every step of the way” to ensure a smooth transition.

Some of the changes set to take place include new customs procedures and duties and travel and work visas.

As the government urges businesses to prepare, there is still much uncertainty around the Brexit trade deal. On Friday, Prime Minister Boris Johnson shut down trade talks and said it was time to prepare for a no-deal Brexit. As of yesterday, a spokesperson for Downing Street said there was still no point continuing talks without “fundamental change” to the EU’s approach.

Ian Wright, chief executive of the Food and Drink Federation, said the statements from the Prime Minister signal that the UK is “heading into very dangerous territory”.

“The perils of a no-deal exit for GB food and drink manufacturing remain as real as ever. We need leaders on both sides to find a way past the current impasse in order to progress talks. In the event of a no-deal Brexit, shoppers will – literally – pay a heavy price,” he said. While imported food and drink from the EU could face tariffs averaging 18%, border delays and disruption could bring further costs for the industry.

“A no-deal outcome is bad for food and drink businesses, bad for food security, and bad for every household in Great Britain,” Ian added.

The NFU joined the Confederation of British Industry and 70 other trade associations and professional bodies to call for a pragmatic approach to secure a UK-EU agreement. “The EU, as a single trading bloc, is the most important international market for UK agri-food products, and given its size and proximity will continue to be so in the future,” said NFU director general Terry Jones.

“That is why it’s critically important that a tariff free, quota free deal is struck as soon as possible. Securing a tariff free deal will help the nation’s farmers maintain vital trade links and ensure that they can continue supplying British consumers with high quality, affordable food produced to trusted high standards, with European consumers continuing to benefit too.”

For more information on the actions that businesses need to take ahead of the Brexit deadline, visit gov.uk/transition

more like this
Speciality Food Daily Briefing

Stay connected and receive the latest news, analysis and insights from our industry's top commentators