Brexit: Ministers warned UK businesses 'not prepared' for no-deal

Suban Abdulla
·3 min read
The European Union and UK flags flying outside the House of Parliament in London as part of a Brexit protest
Radical changes and new costs for firms will occur even if a deal is struck, in an abrupt reversal of decades of integration that has bolstered seamless UK-EU trade. Photo: Getty

British businesses are struggling to prepare and are not ready for a no-deal Brexit after “patchy” communications, the House of Commons' Brexit committee has said.

The Brexit committee has raised significant concerns on Saturday over the UK’s preparedness for leaving the EU, less than two weeks before the end of the transition period on 31 December.

The committee's report said communications with businesses have been "patchy at best" and police may be forced to use "slower and more cumbersome" systems. It urged the government to ensure there is a robust contingency plan in place in the next fortnight to cope with the fallout.

It comes after a report by the parliamentary group warned that borders must not be compromised in the absence of an agreement on policing that ensures continued access to law enforcement tools including the European arrest warrant.

“With just seven working days until the end of the transition period, significant concerns remain,” chair of the committee Hilary Benn said.

Speaking to Sky News, he said that it takes a long time to deliver a deal and that the government has left it “very, very late” given that Britain has left the bloc in January this year.

Benn told the broadcaster: "It makes it very hard for businesses to plan if you don't know what the arrangements for tariffs, for example, are going to be from the first of January.”

Talks are ongoing over a trade deal over the weekend, with both sides warning that the chances of agreement remain in the balance — but, significant differences remained over fisheries and the so-called level playing field rules. A deadline for an agreement between the pair has been set for Sunday.

However, radical changes and new costs for firms will occur even if a deal is struck, in an abrupt reversal of decades of integration that has bolstered seamless UK-EU trade.

While MPs welcomed the agreement on the implementation of the Northern Ireland Protocol, they called on the government to work with the devolved governments to "minimise traffic disruption" near British ports.

The cross-party committee also warned that a EU-UK surrender agreement to replace the European Arrest Warrant is "unlikely" to be ready in time.

READ MORE: Firms urge UK and EU to 'smooth the cliff edge' of Brexit disruption

The report also raised worries that key infrastructure decisions have been made "too late" and that the "late delivery" of IT systems for customs makes training and testing difficult.

MPs concluded: "We are also concerned about the overall state of readiness. It is important that the government engages fully with the devolved governments and has robust contingency plans to deal with whatever happens after 1 January."

It comes after British business chiefs called for Britain and the bloc to “smooth the cliff edge” of Brexit disruption as trade rules are overhauled in the New Year.

The Confederation for British Industry (CBI) warned it is now “impossible” for many firms to be ready for changes from 1 January, as they lack the business-critical information needed to prepare.

“From knowing whether staff will be able to travel across borders for work; whether IT teething problems could mean delays at borders; whether firms will face tariffs that not only undermine their competitiveness, but also their very existence; to what the new rules of origin are in the event of a deal,” CBI said in a new report. “These are all questions without answers.”

CBI has written to UK and EU officials calling for “grace periods”, delaying the imposition of some of the new administrative hurdles looming for cross-border trade. A failure to take more steps to minimise disruption threatens the fragile economic recovery since the pandemic hit, according to the trade body.

Watch: Why is fishing so important in Brexit talks?