Fleets warned about ‘no deal’ Brexit after Tory win

Boris Johnson's party secured the largest Tory majority since 1987, taking seats in the north of England from Labour.

Speaking in London on Friday (December 13), the Prime Minister said it was a mandate to take the UK out of the EU next month "no ifs, no buts".

However, while the Freight Transport Association (FTA) welcomed the new clarity and direction that the General Election result provides to business in terms of Brexit planning, it is warning that without the passing of the Withdrawal Agreement through Parliament, the risk of a ‘no deal’ departure remains.

FTA says it could bring chaos to the UK’s highly interconnected supply chain, and the industry that relies upon it. 

Assuming Prime Minister Boris Johnson follows through on his commitment that he will “get Brexit done” and achieves ratification of the Withdrawal Agreement by Parliament, Pauline Bastidon, FTA’s head of European policy, is keen that the focus for Government should then shift to detail of the future trading arrangements between the UK and EU.

She said: “Big questions about our future trading arrangements with Europe are yet to be answered, and must be an urgent priority for negotiations if UK PLC is to continue trading effectively. 

“Despite repeated requests of the previous Government, FTA still has not received responses from government on a number of key areas which currently enable the smooth passage of goods and services across the UK’s borders. 

“While the transition period has already been reduced to less than a year, it is vital that the logistics industry understands the new rules and procedures it will need to implement after Brexit, and critically, has time to plan and adapt. We must not reach another cliff edge at the end of the transition period where key trading arrangements are simply not known.

“Our industry needs, and deserves, to be given clarity on the issues that matter, and sufficient time to adjust to alternative arrangements – ideally months, rather than days. Logistics should not be set up to fail through lack of early planning for the needs of a sector which affects every facet of our daily lives.” 

According to FTA, the three priorities still concerning businesses across the sector which is responsible for keeping Britain’s industry and consumers stocked with the products they need are:  

  • Final confirmation of the arrangements for imports and exports between the UK and Europe need to be agreed – business needs to know what the processes required will be, and have time to learn and implement them. 
  • Agreement on the situation on the Irish border, including the potential for checks and where and how these are to be made.
  • The ongoing situation regarding the employment of EU nationals within a sector that relies on them for vital labour – with more than 53,000 lorry driver vacancies already in the UK, and more in warehousing, van driving and other key roles across the sector, the loss of the 343,000 EU nationals working in British logistics firms could see vehicle movements and the supply chain as a whole come to a standstill. 

“No one wants to see long border delays for goods and services, which could cause critical problems in the supply chain for perishable items, critical medicines and other time sensitive goods,” continued Bastidon. “But this is exactly what will happen if the Industry does not get time to plan for the introduction of new rules and procedures. 

“Much of the UK’s manufacturing industry relies on deliveries arriving from the EU in a very limited window of time, so it is imperative that nothing hinders the movement of these vehicles if catastrophic knock on effects are not to be felt throughout the country’s industry. 

“This is not Project Fear, but Project Fact and something which FTA has been pressing for clarity on since Article 50 was triggered, almost three years ago.

“What our members need is for the new government to make good on its promises, and provide industry with the tools it needs protect the supply chain and keep Britain trading smoothly, without additional cost or delays. 

“As an industry we are agile and ready to help make Brexit work, but to expect us to do so at the last minute, risks rushed implementation and potential problems. 

“FTA stands ready to assist the government in any appropriate capacity to ensure that Britain keeps trading following Brexit. 

“Failing to plan is just as bad as planning to fail – we must avoid leaving important decisions to the last minute with no time for implementation.”

John Perry, managing director of supply chain and logistics consultancy SCALA, also believes that UK businesses are still facing a huge amount of uncertainty.

He said: “While we do know that a clear Conservative victory on Friday will set the wheels of Boris Johnson’s withdrawal agreement in motion, many of the details still remain undecided.

“Of particular concern are the potential implications of Johnson’s Northern Ireland protocol.

“Border controls and customs processes for goods moving from Great Britain to Northern Ireland are yet to be defined, and there are worries that the proposed arrangements as currently constructed will cause considerable friction.

“As a result, doubts have also been raised over the feasibility of implementing the protocol Johnson’s self-imposed December 2020 deadline

“So, where does this leave businesses trading between Great Britain and Northern Ireland, and potentially moving goods onwards to the Irish Republic?

“If the Conservatives are elected, the precise details of Johnson’s agreement will hopefully become clear over the coming months. In the meantime, there are a few steps these businesses can take to ready themselves, whatever the outcome on Friday.

“The first is to take this opportunity to review their Incoterms with customers and suppliers. Incoterms define who is responsible for transaction costs and duties, so will have a direct impact on a business’s cost and risk exposure post-Brexit.

“Secondly, businesses that have not yet done so should register for HMRC’s Transitional Simplified Procedures. This will enable them to import goods into the UK without make a full customs declaration in advance, and also postpone paying duties and VAT.

“Thirdly, it’s essential that businesses ensure they are aware of the relevant temporary product and tariff codes and customs processes that may come into force.”

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