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No-deal Brexit will bring tangle of red tape, Britain warns companies


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No-deal Brexit will bring tangle of red tape, Britain warns companies

By Kylie MacLellan and Kate Holton

 

2018-08-23T140637Z_1_LYNXNPEE7M11C_RTROPTP_4_BRITAIN-EU.JPG

Britain's Secretary of State for Exiting the European Union, Dominic Raab gestures during his speech outlining the government's plans for a no-deal Brexit in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls

 

LONDON (Reuters) - Britain on Thursday told companies trading with the European Union they would face a tangle of red tape, possible border delays and more costly credit card payments if the government fails to negotiate an exit deal before Britain leaves the bloc.

 

Brexit minister Dominic Raab said he remained confident the two sides would reach a deal, but set out in a series of 25 notes what could change without one.

 

With little more than seven months to go until it leaves the EU on March 29, Britain has yet to reach an agreement with the bloc on the terms of its departure. Prime Minister Theresa May's plan for a "business-friendly" deal has failed to impress negotiators in Brussels and has been heavily criticised at home.

 

"We have a duty, as a responsible government, to plan for every eventuality," Raab said. "To do this, we need to have a sensible, responsible and realistic conversation about what a no deal situation really means in practice."

 

After more than 40 years in the EU, Britain is having to set out its plans for every aspect of life. Around 80 technical notices are expected over the coming weeks, with the first 25 covering everything from the movement of organs, blood and sperm to nuclear regulation and organic food.

 

The guidelines make it clear that companies trading with Europe would face new customs and excise rules and require paperwork covering customs and safety declarations.

 

If Britain left without a deal "the free circulation of goods between the UK and EU would cease," the guidance said.

 

Chris Goodfellow, who runs logistics group Lockerfreight, said his clients were asking if they needed more staff to handle customs. "My head is spinning and my clients are panicking," he told Reuters. "My phone has not stopped."

 

"The companies that only deal with Europe don't realise how much more work is involved."

 

Supporters of Brexit say there may be some short-term pain for the British economy but it will prosper in the long-term when cut free from the EU's rules and regulations.

 

A European Commission spokesman said it was clear that the withdrawal of the UK was going to lead to disruption "with a deal or without a deal. And that's why everybody, in particular economic operators, needs to be prepared."

 

The government asked drugmakers to stockpile medicines for six weeks above normal operations - a target the industry said would be challenging - and called for medicines with short shelf-lives to be flown in to the country.

 

The drugs sector is one of the most vulnerable because of uncertainty as to how medicines oversight will function.

 

It welcomed plans to recognise EU tested and licensed products, but said the EU needed to show similar flexibility, echoing warnings from other industry bodies that government contingency plans could be blunted unless the EU cooperates.

 

Industry also welcomed the fact that import Value Added Tax on goods would not have to be paid upfront under a new "postponed accounting" rule, but UK recipients of expensive parcels from EU businesses will have to pay tax in line with current rules for non-EU countries.

 

On financial services the government said Britons will have to pay more to make card payments in the EU and businesses on the continent could be cut off from investment banks in London if there is a no-deal Brexit.

 

More than a million Britons living abroad may not be able to access their UK bank services to receive pensions and salaries, the document said.

 

POLITICAL FURORE

Plans to release the technical notes were first announced in July, bringing accusations of scaremongering from pro-Brexit campaigners in May's Conservative Party.

 

That was followed by a backlash from political opponents who said it depicted a government in chaos.

 

"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," business lobby group the CBI said.

 

The furore underlines the fragility of May's position, heading into the final phase of negotiations without unity in her party, a clear consensus in parliament on what type of exit Britain should seek and persistent disagreements with Brussels.

 

Several ministers have warned that the risk of leaving without an agreement has increased. Earlier this month trade minister Liam Fox put the chances at 60-40.

 

Many economists say failure to agree exit terms would seriously damage the world's fifth-largest economy as the EU is its largest market.

 

Finance minister Philip Hammond, in a letter to a Conservative lawmaker published on Thursday, said the potential hit to the economy from a no-deal Brexit could result in "large fiscal consequences" for Britain.

 

One of the main outstanding issues is the Irish border, which the no deal papers failed to address, simply repeatedly saying the government would "take full account of the unique circumstances of Northern Ireland" in its no-deal planning.

 

Business groups and companies welcomed the details and said more was needed. "It seems to have taken the British side a long time to understand what is at stake economically with Brexit," said Martin Wansleben, head of the German Chamber of Industry and Commerce (DIHK).

 

The opposition Labour Party's Brexit spokesman Keir Starmer said Raab had not said how ministers would mitigate the serious consequences of leaving the EU without an agreement.

 

Tackling some of the media reports that had preceded the release of the papers, Raab sought to reassure Britons that the army would not be called in to distribute food. And said a popular sandwich would still be available.

 

(Additional reporting by London Newsroom, writing by William James and Kate Holton; Editing by Janet Lawrence and Toby Chopra)

 
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-- © Copyright Reuters 2018-08-24
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"..."We have a duty, as a responsible government, to plan for every eventuality," Raab said. "To do this, we need to have a sensible, responsible and realistic conversation about what a no deal situation really means in practice..."

 

Fine words.

 

However, they would have been MUCH more useful had they been spoken a long, long time ago.

 

Like around the time of the vote...

 

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10 minutes ago, Samui Bodoh said:

"..."We have a duty, as a responsible government, to plan for every eventuality," Raab said. "To do this, we need to have a sensible, responsible and realistic conversation about what a no deal situation really means in practice..."

 

Fine words.

 

However, they would have been MUCH more useful had they been spoken a long, long time ago.

 

Like around the time of the vote...

 

The game’s not over yet.

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2 hours ago, webfact said:

More than a million Britons living abroad may not be able to access their UK bank services to receive pensions and salaries, the document said.

I guess that applies only to Brits living in EU countries ... ?

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10 hours ago, mfd101 said:

I guess that applies only to Brits living in EU countries ... ?

Yes but the inevitable fall in the pound will affect everyone, especially those reliant on money from the UK.

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On 8/24/2018 at 6:35 AM, webfact said:

Supporters of Brexit say there may be some short-term pain for the British economy but it will prosper in the long-term when cut free from the EU's rules and regulations

and just out of curiosity, what is short-term and long-term?

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Let me try my hand at a prediction (I may of course be completely wrong):

If there is a deal, the UK economy in 2019-20 will diminish in size by around 5%;

if there is a no-deal exit, it will diminish in size by 8% to 10%.

 

Either way there will be massive unemployment and the British economy will take at least 10 years to recover to its present size.

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On 8/24/2018 at 6:45 AM, Samui Bodoh said:

"..."We have a duty, as a responsible government, to plan for every eventuality," Raab said. "To do this, we need to have a sensible, responsible and realistic conversation about what a no deal situation really means in practice..."

 

Fine words.

 

However, they would have been MUCH more useful had they been spoken a long, long time ago.

 

Like around the time of the vote...

 

 

How about at the time of the vote in 1975 Ted Heath had said a vote for this will bring us under the control of the EU?

 

I certainly would not have voted in favour and I doubt that many others would either.

 

If the UK had not joined then we would not be in the pickle we are in now.

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On 8/24/2018 at 9:21 AM, mfd101 said:

I guess that applies only to Brits living in EU countries ... ?

Yes and only for insurance based pensions. 

I have my doubts as to the statement in the OP is a correct interpretation. It is my understanding that a problem will come about in respect of licences required by insurance companies to operate in Europe. I have not seen or heard anything about bank services in relation to pensions.

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42 minutes ago, billd766 said:

 

How about at the time of the vote in 1975 Ted Heath had said a vote for this will bring us under the control of the EU?

 

I certainly would not have voted in favour and I doubt that many others would either.

 

If the UK had not joined then we would not be in the pickle we are in now.

I don't think that there can be any dispute that at the time information was held back and it is not out of the question that the media may have been brought to heel. Personally I still think that the right decision was taken.

So, out of the 3 national referendums held in the UK, at least 2 were conducted in a manner that can be said to be dubious at the least. 

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After the referendum vote there was a great deal of heated debate on TV about what leaving the EU would look like. The predictions of a post-vote meltdown turned out to be incorrect, however no one can deny that the GBP has fallen steeply and failed to recover, levels of inward investment have fallen, GDP growth has fallen, albeit not as dramatically as predicted. But still not a great result. 

 

The difference now? After the vote the UK remained in the EU single market and customs union. In effect, nothing really changed apart from sentiment. The Brexiteers were not talking about a no deal Brexit, because since the EU need us more than we need them, they would offer us a deal that was half decent. German automakers would lobby their government to ensure this. That hasn’t happened, as it appears the EU don’t need us anything like as much as we need them ... we are the weak party in these negotiations and the prospect of no deal is economically catastrophic. The difference between now and the aftermath of the vote is that everything changes the day after we leave without a deal. And it finally appears to be dawning on people in the UK that it won’t be like the day after the vote ... project fear was used as a marketing slogan to reassure people ... now they’ll all have to deal with the harsh reality. The UK is heading for several decades of economic pain.

 

 

 

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3 hours ago, AlexRich said:

it appears the EU don’t need us anything like as much as we need them ... we are the weak party in these negotiations and the prospect of no deal is economically catastrophic.

Which of course COULD have been known BEFORE the referendum. But the combination of David Cameron's flippant negligence, the treasonable lies of the Brexit leaders, and the voters' basic ignorance & inability to deal with complexity ensured that it wasn't.

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7 hours ago, billd766 said:

 

How about at the time of the vote in 1975 Ted Heath had said a vote for this will bring us under the control of the EU?

 

I certainly would not have voted in favour and I doubt that many others would either.

 

If the UK had not joined then we would not be in the pickle we are in now.

 

A government that has it's own currency, decides it's own taxation rates, decides the vast majority of it's laws, determines it's own borrowing and expenditures ... how can a country like that be "under the control of the EU"? 

 

Are you aware that between 1950 and 1975 the UK were the slowest growing major economy in Europe, only to be among the fastest growers during the period after joining the EU? The UK prosperity of the last 40 years has a lot to do with being part of a large trading bloc ... we have trade deals with 60 other countries in addition to the EU members through our membership of the EU.

 

Tell me you voted to get rid of foreigners or you wanted bendy bananas ... but don't tell us it was to be more prosperous like before ... because that is a fantasy. 

 

 

 

 

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People also think that the EEC of 1975 was somehow a conspiracy already to become the EU of 1993 and now. Which is nonsense. The EEC and then the EU both evolved over time, step by step, a time during which Britain was a full member and its leaders & governments had full membership rights to influence those evolutions & make decisions.

 

To believe that somehow "Brussels" developed its evil fascist bureaucratic anti-freedom anti-British ways independently of anything Britain and its partner governments wanted or decided is childish drivel.

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10 hours ago, mfd101 said:

People also think that the EEC of 1975 was somehow a conspiracy already to become the EU of 1993 and now. Which is nonsense. The EEC and then the EU both evolved over time, step by step, a time during which Britain was a full member and its leaders & governments had full membership rights to influence those evolutions & make decisions.

 

To believe that somehow "Brussels" developed its evil fascist bureaucratic anti-freedom anti-British ways independently of anything Britain and its partner governments wanted or decided is childish drivel.

That is not quite true, the policies that the "Community" (EEC/EU) would follow were laid out and agreed at the leaders meeting in Dec 1969, sometime before the UK parliament voted to join in 1971. The vote was taken on 28th Oct with 356-244 in favour, UK joined on 1st Jan 1973.

There is no dispute that the UK agreed as these policies were implemented along the way.

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