We need a real no deal plan urgently

BY George Bridges   /  3 July 2019

In 121 days we are due to leave the European Union, with or without a deal.

Leaving without a deal raises innumerable questions. We have answers to some.

To others, Whitehall may or may not have answers.

And there are questions to which we won’t ever have the answer, as they depend on how the EU reacts.

The key point is that ignorance breeds fear, honesty breeds trust.

What people want to know is how no deal would affect them. What has been done to prepare for no deal; what needs to be done; and what more should government, businesses and individuals themselves do?

To give the government credit, it has done a lot to prepare for no deal. There have been at least 750 communications of one sort or another since October alone. Print them off and you create a compost heap of press releases, reports, and statements.

And that is precisely the problem: we have no clear sense of what the plan is.

As we clatter towards 31 October, Parliament and the country must now be given a comprehensive summary that sets out, clearly, our nation’s overall preparedness.

This summary should cover three broad areas.

Government preparedness.

Business preparedness.

Legislative preparedness.

Here are just some of the issues that summary needs to cover.

First, government preparedness.

How well prepared is the UK government, including devolved administrations and regulators, to keep the movement of people, goods, transport and services (including data) flowing in the event of no deal?

Are our regulators as confident as they can be that enough has been done to safeguard financial stability?

Are our police and security services ready?

More specifically, in February, the NAO said six out of eight critical IT systems remained at risk of not being ready for a no deal outcome in March: what is the status now? If they are not ready, what are the consequences?

What precisely will happen on the Irish border?

And what is the preparedness  of our Channel ports in handling roll on roll off freight?

Last week Peter Foster, the Daily Telegraph’s excellent European Editor, reported that he had been told by the Road Haulage Association that any truck without the right paperwork won’t be allowed onto a ferry at Dover. Is this the case?

And this brings us to the second topic the summary needs to cover:  business preparedness.

How well prepared are major sectors, especially those with complex supply chains such as pharmaceuticals, food and automotive, for no deal?

In February, the Government assessed the risk in relation to trader readiness as red-rated.

As of May 26, 69,000 firms had signed up for EORI status – less than a third of the 240,000 EU-trading UK firms estimated to need one.

EORI status is needed if a firm is to participate in the Government’s Transitional Simplified Procedures scheme. By the end of May, 17,800 firms had applied for the scheme.

What’s the status now?

Finally, legislative preparedness.

How many pieces of primary legislation need to be passed if our statute book is to function effectively on day one, were we to leave without a deal? In February, the Government said it needed to pass six more Brexit bills to prepare fully for no deal.

Since then, although we have debating important issues such as wild animals in circuses, I understand only one of these Brexit bills has made it onto the statute book. If those pieces of legislation cannot be passed, are there means to work around any problems?

And then there is the government’s proposed tariff schedule that would apply in case of leaving the EU without a deal. That still needs to be approved by Parliament. When is this going to be passed?

As to EU trade and other agreements: how many of these deals have now been grandfathered over? What are the consequences of us failing to grandfather over these agreements – such as with Japan? Are there any workarounds?

We know the EU and member states have also been preparing for no deal. Will the government reciprocate on those areas where the EU has created arrangements to mitigate disruption?

And into this category of legislative readiness falls the much debated GATT article 24.

Some have argued that this somehow guarantees today’s free and frictionless trade in goods with the EU will continue.

I don’t agree.

My reading of it is that both the EU and the UK – the contracting parties – need to come an agreement if trade in goods were to continue as now.

And the UK and the EU would also need to come to an agreement covering services if Article 5 of the GATS is to be triggered.

What’s more, neither Article 24 nor Article 5 cover issues such as mutual recognition of standards and regulations for goods and services, rules of origin, participation in institutions such as Euratom, and security cooperation.

So to achieve a seamless no deal transition, in which the status quo is maintained, would be a matter for negotiation. And the EU’s negotiating position – as it stands today – is very clear.

Michel Barnier has said:

“We would not discuss anything with the UK until there is an agreement for Ireland, for Northern Ireland as well as for citizens’ rights and the financial settlement.”

In other words, the EU’s position is that until we have agreed to the Withdrawal Agreement, there can be no further negotiation.

And this has a bearing on our no deal preparations. For if we leave with nothing on October 31, the longer it takes to agree with the EU simply to freeze current trading arrangements, the longer we will be trading with the EU on pure WTO terms – which would have an impact on our no deal preparedness.

So this is the summary we need – a document that sets out, for the public and Parliament, how well prepared we are.

With just 121 days left to go until we are due to leave, this comprehensive summary should be prepared now, and be published before Parliament rises.  Ignorance breeds fear. Honesty breeds trust. We need the facts, and we need them now.

Lord Bridges is a former Brexit minister

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