Business Leaders react as Boris says ‘trade talks with the EU are over’

Talks between the UK and EU over a post-Brexit trade agreement are “over”, Downing Street has said.

The UK-EU trade talks appear to have stalled with the Prime Minister declaring there would no deal without a “fundamental change” in the EU’s approach.

Simon Boyd, managing director of Christchurch-based REIDsteel and a member of the CBI’s manufacturing council, said: “Bravo Boris!

“The Prime Minister must be applauded for his bold stance in the face of continued EU intransigence.

“It would have been easy to let these negotiations drag on interminably with yet another extension of talks but this would have been to our own detriment and given us less time to prepare for our departure.

“Boris has upped the ante and EU leaders must now be under absolutely no illusion that we are fully prepared to leave on December 31 without an agreement in place.

“We have to back Britain. We can prosper perfectly well on the international stage on World Trade Organisation (WTO) terms and can now work towards putting the necessary arrangements in place.

“Of course the door is ajar for the EU to return to the table if there is a fundamental change in their position but this will require a major shift in mindset which seems to have been beyond them so far.

“So, we look forward to a bright future in charge of our own destiny and if the EU wishes to revive the talks then they would be welcome to do so but time is running out.”

Commenting on the UK walking away from a deal, Andrew Hood, Partner at European law firm Fieldfisher and former General Counsel to David Cameron, said: “On the plus side, businesses will have a lot more clarity on what they will face on 1st January. On the down side, there will be a lot of work for many to do with added complications on trade and regulation, increased costs through tariffs and duties and a updating their commercial arrangements and contracts to reflect this new reality.”

As Boris Johnson tells the UK to prepare for a no-deal Brexit this lunchtime, supply chain professionals will also be listening extremely closely.

Stefan Tärneberg, Director of Solution Consulting at BluJay Solutions, on what no-deal means for the supply chain, commments: “Crashing out of the EU without a deal will have a monumental effect on British trade. Under stringent new regulations, companies will struggle to meet consumer demand for goods. The repercussions will be felt throughout the entire UK economy.

“The sheer volume of customs declarations organisations will need to handle as the UK becomes a ‘third country’ is unprecedented. Subjected to the same regulations on tariffs and import quotas as all non-EU countries, UK companies will need to complete a huge 400 million customs declarations a year. Last year, the figure was 5 million. That’s an increase of 8000%.

“In a no-deal scenario, we will all bear the brunt. Companies will need to pour hours of skilled manual labour into completing each declaration – with mistakes costing time and money. That’s on top of the financial cost. To keep importing 70% of our goods, the UK will spend £4 billion just on customs paperwork next year*. We’ll all foot the bill as prices rise in shops, and our favourite products disappear from shelves entirely.

“A trade agreement with the EU won’t take away the complexity of declarations, but it will lessen the strain on us all, slashing the number of hoops to jump through and restoring abundance as we know it. Without a deal, there is only one solution for a smoother trade situation. Companies must take matters into their own hands and automate the management of these declarations. Those which are so far unprepared will have a huge shock come January 1st – with a ripple effect that will impact us all.”

Responding to the Prime Minister’s statement on the progress of Brexit negotiations, Allie Renison, Senior Policy Advisor at the Institute of Directors, said: “Few would doubt that getting ready for no-deal in the middle of a pandemic will be a Herculean task for many businesses. Our figures show that most directors think that Covid will magnify the impact of no deal. It’s tied their hands throughout the year and put immense pressure on cashflow, and will continue to limit bandwidth in the months ahead.

“To help businesses prepare, Government must work closely with directors to aid their planning, providing information as soon as it comes to light. Financial support for small firms in particular should be stepped up, whether through vouchers or tax reliefs.

“While there may be opportunities on the other side of transition, it remains imperative to minimise the risks in getting there to maximise any future benefits. Both sides must keep their eyes on the prize of a deal, which is in everyone’s best interests.”

Business West Managing Director Phil Smith comments: “This is a disappointing position for the UK government to take. Businesses are already under unprecedented pressure from the impact of COVID-19 and the additional pain this puts on the economy and firms’ own financial positions. We know that this is making it harder for companies to prepare for Brexit, and cope with the additional turmoil that having a no-deal outcome would create.

“There is a widespread expectation among business audiences that a trade agreement with Europe is within reach, and that it just requires level-headed leadership to achieve a final deal. They will despair at yet another period of political theatre, which only heightens uncertainty, when what we need is further negotiations to settle what is a centrally important trading relationship for both sides. It is time for both sides to stop the dramatics, get a deal and set out the details to allow businesses to adapt. Time in no longer on our side.”

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, has also said: ‘The deadline set by Boris Johnson to reach a deal has been and gone and with the UK and EU both seeming unwilling to back down, the pound has fallen against the euro as the risk of a no-deal Brexit rises again. It fell to 1.10 against the euro and to 1.28 briefly against the dollar at lunchtime on Friday as the Prime Minister said there was no point continuing talks unless European leaders change their mind.

“With just over 10 weeks before the UK leaves the bloc, businesses and hauliers have been told to get ready to trade without a deal. Both sides are clearly playing hardball, and may well still offer concessions as the window of opportunity narrows, but with the economy still reeling from the effects of the coronavirus crisis, the prospect of a potentially chaotic exit from the EU will be hard to stomach for struggling companies.’’