Businesses desperately require answers as Brexit negotiations reach decision point, says East Midlands Chamber.
With the UK and EU yet to agree a trade deal, businesses are being left to “pick up the pieces” as they attempt to plan for 2021 amid huge uncertainty, believes the Chamber.
It comes as the latest analysis by the British Chambers of Commerce (BCC) showed that with just 24 days to go until the end of the transition period, businesses still have insufficient official information available in 24 critical areas.
Scott Knowles, chief executive of East Midlands Chamber, said: “Businesses are hooked to the news waiting for a positive update from the negotiations because the current stalemate is undermining their ability to prepare for change on 1 January.
“We know our trading relationship is going to look a lot different and many businesses have been managing their ‘known unknowns’, helped by organisations like the Chamber via our Readiness for Change programme.
“But there’s still many critical areas where they need answers, and they need them now, because they are being left to pick up the pieces while uncertainty rules.
“While it appears we are edging towards a decision either way on whether we will have a deal in time for the end of the transition period, the BCC’s Brexit Guidance Dashboard shows there are too many questions that remain unanswered – despite these issues not actually being impacted on the resolution of the trade negotiations.
“There is therefore no excuse for the UK Government not to do everything in its power to ensure the changes from 1 January will be as seamless as possible.”
BCC’s analysis finds 24 questions remain unanswered
The BCC’s Brexit Guidance Dashboard – long used by both business and government to evaluate the quality of official UK Government guidance – compiles 35 questions most frequently raised by businesses, which apply in both “deal” or “no deal” scenarios.
It has assessed the information available to firms and rated it green (information is sufficient), amber (some information is available) and red (information is wholly inadequate).
The BCC last evaluated the quality of official HM Government guidance to assess whether it provides sufficient, clear and actionable information that businesses can use to prepare for the coming changes in September and has now provided its latest assessment.
Government guidance has only been upgraded to a “green” rating in two areas – duty deferment accounts and the paperwork needed to import under a Generalised System of Preferences programme – since its last update, with 24 of 35 key questions still flashing “amber” or “red”.
Among the unresolved issues are:
• Firms still do not know what rules of origin will apply after the transition period, preventing them and their customers from planning – which could potentially create unprecedented new administration and costs
• There remains very limited guidance on procedures for the movement of goods from Great Britain to Northern Ireland
• Ten-digit tariff codes have still not been published and there is still doubt about the final World Trade Organisation’s most favoured nation (MFN) tariff rates
• There is no information on how UK tariff rate quotas will be administered or how businesses can access them beyond the transition period.
The lack of information with which to plan, and potential deadline fatigue, presents further challenges to firms up and down the UK that have already faced reduced demand, ongoing Government restrictions and sustained cashflow challenges due to the coronavirus crisis.
BCC director-general Adam Marshall said: “Posters and television adverts are no substitute for the clear, detailed and actionable information businesses require to prepare for the end of transition.
“None of the issues businesses are grappling with are new. They have all been raised repeatedly over the past four years, from tariff codes and rules of origin through to the movement of goods from GB to NI.
“The detail and precision of UK Government guidance matters, and will make all the difference as the trading relationship between the UK and EU changes on January 1.
“With the clock ticking down, the Government must do everything in its power to provide businesses with answers as they prepare to navigate a New Year like no other.
“We welcome the fact that UK and EU leaders are still talking, as the overwhelming majority of businesses want the two sides to reach an agreement.
“If a breakthrough happens over the coming hours and days, the two sides must immediately set to work on pragmatic steps to smooth the introduction of the new arrangements from January, including easements for genuine administrative errors, clear procedures at ports, and fast help from customs authorities.”
Easements and temporary waivers needed to help firms adjust
In addition to clarity on the new arrangements in any deal, the BCC said it is crucial the UK and EU member states agree to implement changes in a way that helps businesses to adjust to the new procedures and systems that will come in to force from January 1.
Example UK easements could include:
• A temporary waiver of the £300 fine for hauliers arriving at Channel ports that aren’t border-ready due to genuine errors in the preparation of their documentation
• Flexibility in the requirements for EU companies to be registered in the UK for paperwork purposes
• A mandatory grace period for all companies that have inadvertently shared personal data unlawfully between the UK and the EU (whether with third parties or subsidiaries) without adequate legal authority – unless there has been a substantive breach of data subject rights
On areas such as the mutual recognition of professional qualifications, the BCC said the Government should be prepared to act unilaterally to maintain the provision of services within the UK while also working with the EU and member states on reciprocal provision.
If no agreement can be reached, the organisation has urged both the UK and EU to take steps to help keep trade flowing in the interests of businesses on both sides.