Preparing for a No-deal Brexit

EU & International Affairs Comments Off on Preparing for a No-deal Brexit
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With the basis of a Withdrawal Agreement now in place, attention will turn to the European Council and then the UK Parliament to see whether the agreement can be signed off ahead of ratification. Failure to ratify the agreement would lead to an increased chance of a no-deal Brexit.

This blog examines the no-deal preparations being coordinated by the European Commission and the UK Government, and then analyses responses to the Scottish Parliament’s Culture, Tourism, Europe and External Affairs Committee about Brexit preparations.

The European Commission’s preparations for a no-deal Brexit

On 13 November, the European Commission announced that it had intensified preparedness work and outlined a contingency action plan in the event of a no deal scenario with the UK. The Commission’s announcement detailed three measures that have been taken to help the EU27 prepare for a no-deal scenario. These are:

The Communication sets out recommended actions for citizens, businesses and member states to take. In summary the key message is that “contingency measures taken by national or EU authorities cannot replace the preparations that each citizen and business must take to prepare for the United Kingdom’s withdrawal”.

The legislative proposal in relation to visas would mean granting UK citizens visa-free travel to the EU after the United Kingdom’s withdrawal from the European Union. It would mean that UK citizens would not need a visa when travelling to the Schengen area for short stays of up to 90 days in any 180-day period. However, the proposal is contingent on the UK Government reciprocating and offering EU nationals similar rights to visit the UK.

The amendment to the energy efficiency legislation will take account of the UK’s departure by measuring energy consumption figures across the EU27 after the UK has left.

The EU has previously published 76 different preparedness notes providing information on a no-deal Brexit.

The UK Government’s preparations for a no-deal Brexit

The UK Government began publishing technical notes on the effect of a no-deal Brexit in August and at the time of writing had published 105 technical notes under the following headings:

  • Applying for EU-funded programmes (9)
  • Driving and transport (8)
  • Farming (7)
  • Handling civil legal cases (1)
  • Importing and Exporting (15)
  • Labelling products and making them safe (17)
  • Meeting business regulations (11)
  • Money and tax (2)
  • Personal data and consumer rights (3)
  • Protecting the environment (5)
  • Regulating energy (6)
  • Regulating medicines and medical equipment (6)
  • Regulating veterinary medicines (3)
  • Sanctions (1)
  • Satellites and space (1)
  • Seafaring (2)
  • State aid (1)
  • Studying in the UK or EU (1)
  • Travelling between the UK and the EU (5)
  • Workplace rights (1)

As with the Commission’s guidance, the technical notices provide a guide to what the UK Government has to do in preparation whilst also setting out what businesses and citizens will need to do to prepare for a no-deal Brexit.

The Institute for Government has published a usegul guide to the UK’s no-deal Brexit preparations.

No-deal preparedness in Scotland

The Scottish Government has not published any no-deal preparedness notices. But at the start of November it launched an online tool to help Scottish businesses identify how they could be affected by Brexit. It also made available grants of up to £4,000 for exporters and potential exporters “to help them mitigate risks and capitalise on export opportunities despite the challenge Brexit will bring.”

The Scottish Parliament’s Culture, Tourism, Europe and External Affairs Committee published a call for evidence on preparedness for Brexit on 14 September 2018 asking for views on preparations being made for any Brexit scenario, and also views on how helpful the guidance from both the European Commission and UK Government has been in preparations for Brexit.

The Committee received 31 responses.

Brexit Preparedness

In terms of ability to plan for different Brexit scenarios, the majority of respondents suggested that the political uncertainty and lack of clarity as to the likely form of Brexit made planning very difficult.

For example, the Freight Transport Association wrote:

Without clear proposals and examples of the type of future relationship the UK will have with the EU post Brexit, it is very difficult for the Transport Sector to clearly plan and prepare for the UK’s withdrawal from the EU.

Similarly, the Food and Drink Federation Scotland told the Committee:

Members reflected that both customers and consumers have a lack of certainty and are extremely nervous about the outcome of the Brexit negotiations. The result of this is hesitancy in investment decisions by both member companies and their customers.

The Scottish Council for Development and Industry told the Committee that the degree to which businesses and organisations are prepared for Brexit varies considerably and whilst most businesses and organisations have committed time and resources, to Brexit scenario-planning:

It is clear that a significant minority of businesses have not undertaken any planning to date citing insufficient capacity, insufficient information, uncertainty around the final terms of the UK’s departure or unknown factors such as changes in input and labour costs. This final cohort of businesses and organisations, which SCDI expects to be particularly representative of small- and medium-sized enterprises, is of significant concern.

Priorities for Brexit

A number of those who responded suggested their priorities from any Brexit agreement were a continuation of frictionless trade and free movement of workers to ensure a skills shortage was avoided in Scotland.

For example, the Scottish Salmon Producers’ Organisation told the Committee:

Scottish salmon’s first priority is to ensure continued frictionless, tariff-free trade with the EU27 after Brexit. This is important for both imports and exports, from and to the EU27, those countries in the wider Customs Union and in the European Economic Area (EEA) and to other Third Countries with whom the EU has preferential trade agreements.

The Scotch Whisky Association suggested that in the event of a no-deal Brexit, its concerns were three-fold:

  • Disruption to trade with the EU
  • Barriers to trade with the EU
  • Tariffs with third countries outside the EU.

On migration, the General Medical Council referred to the relative high dependency on EEA qualified doctors in certain areas of the UK including in some remote and rural areas of Scotland. Highlands and Islands Enterprise referred to the difficulties businesses in the area have in recruiting and suggested “that a reduction in the flow of EU migrants will further impact on recruitment challenges “.

Commission and UK Government guidance

Respondents also suggested that whilst the guidance from both the European Commission and UK Government was welcome, in many instances it was not particularly helpful as it did not provide specific information on how to respond to the circumstances of a no-deal Brexit.

The Law Society of Scotland told the Committee:

The Technical Notices issued by the UK Government and the Preparedness Notices to Stakeholders issued by the European Commission are helpful in a limited way and are focussed on the situation in the event of there being no deal.

But the National Farmers Union Scotland wrote:

NFUS wishes to highlight that the technical notices regarding trade with the EU and future support are a reiteration of previous statements from the UK Government rather than substituting any solid plan for businesses. As such, it is very difficult for the agricultural businesses that NFUS represents to plan accordingly.

The responses to the Committee’s call for evidence suggest that some stakeholders in Scotland are unprepared for a disorderly Brexit at the end of March 2019.

Iain McIver, SPICe Research