Responses are published here in full as a matter of record. (As ever, a search of news media for 'Brexit' will reveal many more reports and opinions than are expressed by these business organisations, but those quoted here are relevant to manufacturing. More responses will be added as they arrive in Machinery's in-box.)
Updated @ 16:38 on 23/8 with ParcelHero statement.
Updated @ 08:57 on 24/8 with British Chambers of Commerce comment
CBI: “By now, few can be in any doubt that ‘no deal’ would wreak havoc on economies across Europe. These papers show that those who claim crashing out of the EU on World Trade Organisation rules is acceptable live in a world of fantasy, where facts are not allowed to challenge ideology.
“It’s right and responsible that the government have supplied information to businesses on issues from financial services passporting to food labelling, all of which will help lower the risks of the harshest outcomes from a ‘no deal’ Brexit. But without a similar response from the EU, many of these mitigating measures would be blunted.
“The reality is that businesses across the UK have already spent millions of pounds and thousands of hours on getting ready for no deal. Whilst smaller firms simply do not have the resources to assess what the worst-case scenario would mean to their enterprises.
“These technical notices can only be a starting point for the Government. Smaller businesses in particular will need a one-stop-shop where they can get the information and support they need to better understand the issues they would face.
“Above all, negotiators must now get on with finalising a Withdrawal Agreement, putting pen put to paper on a jobs-first transition period and finally, agree on a new relationship that puts people’s livelihoods above politics.”
EEF: “EEF welcomes the increased clarity for businesses from the publication of today’s raft of technical notices. However, the remaining notices need to be published at the utmost speed so companies have the full picture to enable them to prepare properly for a no-deal scenario.
“The decision to allow importers to defer VAT payments is very gratefully received and is something EEF has been campaigning hard for with government in order to protect the 145,000 businesses in the UK which are above the VAT threshold.
“We also welcome the commitment to create UK replacements for the regulatory bodies we will leave next March if we fail to reach a deal with the EU. However, we would like government to make firm commitments to ensure these bodies can swiftly recruit the skilled people they need to deliver a seamless regulatory environment in the event of a no deal exit.
“To help manufacturers, EEF is today launching a dedicated Brexit hotline (0808 168 5874) to help companies understand the implications of the technical notices.
“However, we remain confident that government will secure a deal with the EU and will continue to work with ministers to help secure this.”
UK Steel: “The publication of these notices is a welcome move, injecting some much-needed realism into preparations and demonstrating that the full range of outcomes are being prepared for, including no deal being arrived at. Importantly, these notices will help steel companies plan and prepare for such an eventuality.
“This first batch of notices confirms the difficulties the steel sector would face if we exited the EU abruptly next year. Every week some 900 trucks and several trains carry steel across the channel, totalling some 2.3 million tonnes last year. Additional customs procedures and delays will quickly stack up costs and impact on business.
“In particular for our sector, more clarity is required around trade remedies. There are a host of issues not dealt with in the paper such as: the transition of the recently introduced EU steel safeguard, the review of the full range of anti-dumping measures being carried over and of course, how the Trade Remedies Authority is going to be adequately staffed, with sufficient expertise, to conduct investigations in just seven months’ time.
“These notices provide some much-needed transparency, clarity and advice but it is vital that the remaining notices are published as soon as possible and the gaps are filled in.”
The Road Haulage Association said today: “If the UK leaves the EU without a deal then the repercussions for Europe’s supply chain will be a disaster, says the Road Haulage Association.
“The RHA is disappointed that despite its pleas for Brexit clarity, none has been forthcoming, and today’s announcements present nothing new.
“The RHA has met with government ministers on many occasions to discuss the needs of UK transport operators and has stressed that the only way to maintain economic links on both sides of the Channel is to continue with the process of free-flowing borders.
“If that’s not going to be the case, then a no-deal Brexit will be little more than a nail in the coffin of the industry responsible for moving 98% of the UK economy.
“The future for the people and businesses of Kent also looks grim, as within a short period of time the Garden of England becomes the UK’s biggest lorry park.”
British Chambers of Commerce - Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “Public preparations for all eventualities – and clear, crisp communication with affected businesses – are long past due.
"The technical notices being published by the UK government are a good start, but businesses still need more detailed information to trade as smoothly as possible across borders if there is no UK-EU deal on March 30 next year.
“Ministers say they will take unilateral steps to keep trade moving freely but must demonstrate what they will concretely do to limit the impact of delays, inspections and red tape.
"It is unfortunate that businesses face several weeks wait for further information and clarification. Every additional delay means less time for businesses to prepare ahead of the UK's fast-approaching exit from the EU."
Commenting on VAT, which businesses feared could cause a cash-flow 'time bomb' after the UK's exit from the EU, Adam Marshall said:
“At last, businesses have a clear answer to one of their biggest worries, import VAT.
"The government has responded to our campaign to avoid a VAT 'time bomb' for traders by introducing postponed accounting for imports, and has gone further than we expected by saying that these arrangements will cover imports from EU and non-EU markets alike.
"Had ministers not acted, firms faced the prospect of having to pay VAT immediately on each cross-border transaction, creating significant cash flow issues. While we await further detail on how the new postponed accounting rules will work, this commitment defuses the cash flow 'time bomb' that many businesses feared."
On cross-border trade and customs, where changes are set to impact businesses from day one in the event of a 'no deal' outcome, Marshall added:
“The stark reality is that in a 'no deal' scenario, it appears that the government's intention is to impose full-blown customs controls on trade between the EU and the UK immediately. According to the technical notice, businesses will have to be ready for customs declarations, tariffs, safety inspections, new licenses and more from day one, which will be cold comfort for many trading firms. Companies trading across European borders need to start preparing for this possibility now, and so too do communities close to border crossing points.
"Given well-publicised concerns surrounding the capacity and readiness of UK customs systems, we question whether this outcome is realistic. Even though there is some welcome practical advice in the government's technical notes on trading with the EU in these circumstances, we need to know much more. What happens to 'trusted trader' schemes? What about trade that flows under the provisions of existing EU free trade agreements? We anticipate putting many more questions to ministers about cross-border trade in order to get the clarity that businesses need."
On banking and financial services, where changes could have a significant impact on non-financial firms trading across borders, Marshall said: "There are some alarm bells for business here, far beyond the headline-grabbing questions about the City and passporting. The government is saying that firms could face higher costs and slower processing for their Euro transactions in a no deal scenario, and that surcharges for card payments could make a comeback. Both of these real-world business issues need to be avoided if at all possible."
On guarantees for EU-funded projects, Marshall noted:
“The reiteration of the government's broad commitment to guarantee resources for EU-funded projects approved prior to the UK's departure from the EU is welcome. EU-funded projects help deliver infrastructure, regeneration and employment in communities across the UK -- and the government is doing the right thing by saying that it will stand behind these projects until their expected completion in 2020. We will await further detail spelling out exactly how this guarantee will work in practice.”
The technical notices acknowledge that arrangements for the Irish border are still to be confirmed. Commenting based on the interests of trading businesses across Northern Ireland, Ann McGregor, Chief Executive of Northern Ireland Chamber of Commerce and Industry, said: “It is telling that nearly all of these technical notices feature the same placeholder text on Northern Ireland and the Irish border.
"Businesses across Northern Ireland need the two sides to be far clearer about what will happen to trade on the ground at the Irish border, and between the Irish Republic and Great Britain, in the unwelcome event that a deal cannot be struck.”
ParcelHero - ParcelHero’s head of consumer research, David Jinks MILT, says: “If the government thought its first batch of 25 documents advising businesses and individuals how to plan for the event of us leaving the EU without a deal would reassure people, they are mistaken.”
Explains Jinks: “The advice that people and businesses shipping items to the EU should ‘Engage the services of a customs broker, freight forwarder or logistics provider to help, or alternatively secure the appropriate software and authorisations.’ is reminiscent of government advice to ‘Use tables if they are large enough to provide you all with shelter’ from 1980’s Protect and Survive government booklet.
“The European Commission recently warned increased border controls will mean transport between the UK and EU will be “severely impacted”, with the possibility of “significant delays”. The technical Notice’s assertion that the government will have stockpiled six weeks’ worth of medical supplies to cope with border disruption simply creates more worries than it calms. If that’s the level of delays anticipated for urgent medicines, what will the situation be like for normal goods? If individuals and SMEs are simply planning to send a parcel to the EU, or expecting a parcel collection from the Continent, we can get a picture of the real delays anticipated.”
The Brexit secretary introduced the new Technical Notices by saying: “There are risks here, but let’s not have the risks blown out of proportion.” But Jinks responds: “Quite frankly, the Technical Paper on Trade’s advice that businesses should ‘if necessary, put steps in place to renegotiate commercial terms to reflect any changes in customs and excise procedures, and any tariffs that may apply to UK-EU trade’ is the equivalent of Protect and Survive’ s introduction saying: ‘The dangers which you and your family will face in this situation can be reduced if you do as this booklet describes.”
And he concludes: “Just like with the threat of a nuclear attack, we very much hope that a no-deal Brexit is a worst-case scenario never actually happens. Anyone planning to use a parcel courier to ship to the EU in the future must trust that the threat of a hard Brexit never actually comes true – because British exporters know ducking under a table won’t help them survive the extra duties, red tape and delays on their exports to the EU.”
The Chartered Institute of Logistics & Transport said this the day before: “One in six (17%) of UK manufacturers have identified supply chain disruption as being the single biggest factor that will impact their business post Brexit.
A new report (see link below) from Sheffield Hallam University and SSG Insight has found that 83% of British manufacturers are now preparing for a hard Brexit scenario by actively forging new relationships with “Rest of World” (RoW) territories, a move that will place new demands on supply chain networks and logistics providers.
Orders from EU-based countries are expected to take a dramatic decline following Brexit, prompting nearly half (44%) of manufacturing companies to identify Asia as a focus area for the future, as well as the Americas, Africa and the Middle East.
When considering the implications on the supply chain for doing business with RoW territories, cultural and language differences have been raised as a major concern for more than a quarter (28%) of UK manufacturing companies. This figure compares to just six per cent concerned with the actual process and logistics of transporting products via sea or air.
Within global supply chain networks, lack of defined legalities around product standards and specifications have been highlighted as a problem area, with tariff barriers and a lack of trade agreement adding to the complexities.
To help mitigate the issues posed by worldwide transportation and better support ambitious growth plans, manufacturing companies in Britain are actively investing in creating new, agile supply chains through the cloud.
This latest industry snapshot draws on extensive research amongst the UK’s leading manufacturing executives. The report, Harnessing Brexit, Technology and Insight: British Manufacturers, a Competitive Edge in an Age of Uncertainty and Opportunity, is co-authored by Dr Hongwei Zhang and Professor Sameh Saad from Sheffield Hallam University and Jon Moody of SSG Insight. It discusses the optimism and concern around two of the most critical challenges facing modern Britain: Brexit and the relentless rise of technology, particularly in the form of Industry 4.0.
The report reveals that manufacturers are more than twice as likely to point to global competition than Brexit when asked what they consider to be the biggest challenge disrupting industry, closely followed by the Internet of Things and capability to handle data from connected technologies. More than half (59%) of UK manufacturers are intending to invest in smart, connected technology to drive forward international growth.
Dr Zhang, Principal Lecturer at Sheffield Hallam University, said: “British manufacturers have undeniably faced tough economic times in the past, but they are now at a critical juncture. Whilst Brexit-ambiguity is having an unsettling effect on the sector, our research has found that it could prove to be the catalyst for manufacturers and logistics firms to digitally transform and better compete worldwide.”
SSG Insight has earned an impressive reputation for delivering world-class data analysis, helping British manufacturers compete globally by effectively managing their assets to drive better business performance. Jon Moody, Chief Product Officer, said: “The UK is entering a new era and – despite the question marks that hang over tariff rates and regulatory barriers – new market opportunities and agile supply networks are developing across the world. As many manufacturers actively forge relationships with new territories and commit to investing in technology, it’s clear that a confidence is very much emerging from the uncertainties.”
