The Federation of Small Businesses in Wales has said the dangers of a no-deal Brexit are clear, after the UK Government published guidance on what could happen if no agreement between it and the European Union is struck.
The UK Government’s Brexit Secretary Dominic Raab outlined what he called “practical and proportionate” advice in a set of technical notes for businesses, but stressed that a deal with the EU was the most likely outcome and a priority for the government.
Responding to the 24 documents, which cover industries such as medicine, finance and farming, Ben Francis, FSB Wales Policy Chair, said: “The dangers of a sudden and unplanned no-deal
Brexit have been laid bare. A pro-business Brexit is one with a transition period – a vital lifeline that won’t be there in a no-deal scenario. The smallest firms will be the least able to cope with a cliff-edge moment.
“It’s right to prepare for a no-deal outcome. That means following-up these notices with guidance that every small business owner can understand. ‘Technical’ is certainly the word – anyone without real expertise won’t be able to make head nor tail of these documents.
“Suddenly having EU tariffs applied to UK exports from 11pm on March 29 will cause huge disruption to small UK firms that trade internationally. Two in five smaller businesses that trade exclusively with the EU say they would be put off continuing to do so by a tariff of any size.”
The guidance published by the Brexit Secretary says businesses trading with the EU should start planning for new customs checks and might need to buy new software for this.
Mr Francis added: “Small UK exporters will also have to negotiate the paperwork that comes with third country access to EU markets. It’s all very well for UK Government to suggest that small businesses ensure they have the software, freight forwarders and brokers needed to make customs declarations in the event of a chaotic no deal. What UK ministers need to understand is that these are not big corporations, they don’t have thousands of pounds to throw at consultants and new tech.
“The majority of smaller businesses exporting goods to the Customs Union say sales would be impacted by the introduction of new customs declarations. Checks at borders, additional paperwork and the need to prove that EU exports have left the UK will mean mounting costs for small firms.
“There’s also the many Free Trade Agreements with countries beyond Europe that we’re party to by virtue of EU membership to consider. Keeping trade easy with these countries is an absolute must. Continuity arrangements must be in place in the event of a no-deal Brexit.”
The UK Government guidance also does little to help the agricultural sector in Wales prepare for a no-deal Brexit, the Farmers’ Union of Wales has said.
FUW President Glyn Roberts said: “What these technical notes highlight is the mammoth task at hand and how unprepared the Government still is – they keep talking about the unlikely event of a ‘no-deal’ scenario – which is certainly a possibility but still don’t actually offer any contingencies.
“In terms of agriculture we have seen a renewed commitment to funding until 2022 but what happens after that? Looking at these notes it appears that still nobody is taking any responsibility for what could happen across the UK and the onus is put back on the industry or were favourable pushed back to devolved administrations who don’t always have our best interest at heart.
“Take the stance on exports for example – it is left to businesses themselves to find out how they are going to be affected with no help to navigate the unknown waters. And when it comes to tariffs, businesses will be left to hang. This should serve as a wake up call for anyone who derives their income from agriculture.”
Responding to the UK Government’s plans, First Minister of Wales Carwyn Jones said: “The writing is on the wall. ‘No deal’ would be a catastrophic failure of the UK Government that would cause huge disruption and serious, long-lasting economic and social damage to all parts of the UK.
“It is hugely frustrating, because if the UK Government had adopted the blueprint to negotiations we set out over 18 months ago, they could have made substantial progress on the future partnership with the EU. They also could have avoided the situation we face today where our biggest employers are considering leaving the UK with the loss of thousands of jobs causing disruption to our economy, our universities are at risk of losing out on vital research and our hospitals are warning of staff shortages putting patients at risk.
“‘No deal’ is not an option and the UK Government’s bluff is fooling no-one. It is time the Prime Minister dropped the poker face and worked constructively with the EU-27 to secure a Brexit deal that protects our citizens, services and economy.”