Businesses face “biggest imposition of red tape in 50 years” as Brexit begins

Economic growth

SHARE THIS STORY

Most companies had closed when the new EU-UK Trade and Cooperation Agreement (TCA) was finally announced on Christmas Eve. And they are only now starting to get their heads around what it all means.

Essentially, it creates the biggest shake-up to the UK’s trading relationships since 1973.  As the BBC’s Economics Editor reported:

It is the biggest imposition of red tape in 50 years“….Johnson’s “manifest error in declaring there are “no non-tariff barriers” for trade with the EU had business leaders falling off their chairs. This is patently not the case.”

Everyone will have their own ‘hit list’ – my own Top 10 covers the whole range of normal business activity:

  • Customs Declarations will be needed for GB-EU movements, including GB to N Ireland as Great Britain leaves the EU Customs Union
  • N Ireland rules create a new UK border down the Irish Sea, as it stays in the EU Single Market whilst Great Britain leaves
  • Rules of Origin will require companies to provide full details of their supply chain, in order to claim tariff exemption for their exports
  • Sanitary & Phytosanitary rules start to protect consumers and plant life – requiring 100% checks on live animals, for example
  • The UK’s vital services sector (~80% of GDP) is hardly mentioned in the Agreement, with the EU still to decide on “equivalence”
  • Freedom of movement ends for workers between the EU – UK, and companies will need to register/re-register for the UKCA/CE/UKNI markings
  • Work visas will required for many EU business trips by UK citizens, and ATA Carnets will be needed to take items to EU trade fairs and music gigs
  • UK qualifications will no longer be recognised in the EU, affecting a wide range of jobs from hairdressers to accountants and lawyers
  • UK-based airlines and trucking companies will lose cabotage rights – the ability to take passengers/freight between EU destinations
  • UK border controls are clearly not ready for Brexit as the pre-Christmas crisis highlighted, although EU borders are more prepared

These changes will be a major, and expensive, shock for anyone who doesn’t remember what doing business across Europe used to be like before the UK joined the original Common Market in 1973. Moving product from Birmingham to Berlin will no longer be as easy as moving it to Bristol.

Then there is REACH, the chemicals safety rules. Companies have spent €bns on registering for this over the past decade. Now, in pursuit of “sovereignty”, the UK government will demand they re-register for a new UK version of Reach from 2022. This is a complete and utter waste of time and money – caused by the UK’s refusal to accept European law as the governing law.

The end result of Brexit will be that many products are withdrawn, because the costs of registration don’t make financial sense. As a result, prices will rise, and availability will reduce.

Nobody would have ever voted for this outcome, if they had been told this was the endgame. Indeed, Boris Johnson assured the voters just after the referendum:

“British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and settle down …There will continue to be free trade and access to the single market”.

READY FOR BREXIT CAN HELP

Equally worrying is the quality of UK government guidance. So far, it amounts to nearly 600k words – equal to Tolstoy’s ‘War & Peace’. But it is spread across a wide range of different websites, with no coherent linkage between them.

This is where Ready for Brexit can help.  As legal experts Irwin Mitchell have noted:

“It’s great that Ready for Brexit has curated all the relevant guidance for the key areas”. 

I helped set it up 3 years ago, with colleagues equally experienced in exporting/importing.  It aims to provide the planning tools that businesses will desperately need from 1 January.

I hope we will be able to help your business mitigate the impact of this explosion of “red tape” and cost increases.

PREVIOUS POST

Chart of the Year - CAPE Index signals negative S&P 500 returns to 2030

20/12/2020

Each year, it seems there is only one candidate for Chart of the Year. And 2020 ...

Learn more
NEXT POST

Look for Winners and Losers in 2021

10/01/2021

“There are decades where nothing happens; and there are weeks where decades ha...

Learn more
More posts
Your A to Z Guide to the reality of Brexit after 31 December
29/11/2020

(Picture credit Shutterstock) A.  Article 50 of the Lisbon Treaty set out the rules for leaving ...

Read
Chemistry & the Economy webinar on Thursday
10/11/2020

Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard...

Read
Pandemic redraws the map
11/10/2020

  Companies have entered a new landscape where the coronavirus has accelerated major paradigm s...

Read
What will happen if President Trump loses the election?
04/10/2020

I spent from September 2015 onwards, during the last US Presidential election, trying to explain why...

Read
Covid fears risk a Great Depression and major social unrest
27/09/2020

Governments spent most of February/March ignoring my warnings here on the dangers posed by the Covid...

Read
The state of the global economy in 2020
13/09/2020

Last Wednesday, I gave the opening presentation for the ICIS PET Conference and looked at whether th...

Read
Reality dawns for business as No Deal Brexit approaches
06/09/2020

I warned before the June 2016 Brexit referendum that Brexit was all about politics, and Boris Johnso...

Read
Global chemical industry – key trends for success in today’s New Normal
02/08/2020

The chemical industry is the best leading indicator for the global economy. On Friday, I had the pri...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more