No deal planning for 2021: UK and Scottish Government

Reading Time: 5 minutes

How have the UK and Scottish governments planned for leaving the Brexit transition period at the end of the year with no agreement governing the EU-UK future relationship?

Dust off the old plans

Since Autumn 2016, the UK Treasury has made over £8 billion available to government departments and devolved administrations for EU Exit preparations, £2 billion of which was specific to a no-deal scenario. Three departments with roles at the UK border – the Home Office, HM Revenue & Customs and the Department for Environment, Food & Rural Affairs (Defra) – have collectively spent roughly half of this sum. And at its peak in October 2019, the UK Government had 22,000 civil servants working on preparations.

Many of the no-deal contingency plans made in 2019 (i.e. before the Withdrawal Agreement was ratified) are still relevant for a no-deal scenario at the end of 2020. For example, the Institute for Government explains that in the areas of fisheries, food, health, transport, services, energy, environment, data, justice, goods trade (from GB directly into the EU) and international agreements there is “No difference between no deal on the Withdrawal Agreement and no deal on the UK–EU future relationship.”

However, despite the additional time and expenditure since the last ‘no deal’ deadline, there are concerns that the necessary preparations are not yet made, particularly on the border. Businesses preparations, as well as government planning, is needed to avoid the “Reasonable Worst Case Scenario” that 40-70% of trucks travelling to the EU might not be ready for new border controls that will be in place from 1 January 2021 in any event.

UK Government action since EU Exit

The UK Government has issued extensive guidance on changes at the end of the transition period, publishing over 490 notices since EU Exit on 31 January 2020. While no explicitly ‘no-deal’ notices have been published, some of the transition guidance covers significant issues for both the deal and no-deal scenarios (for example, HGV traffic management in Kent). This reflects the fact that many of the changes at the end of the transition period will happen in any event. UK in a Changing Europe in its What would no deal mean? report (September 2020) said:

“In some respects, the outcomes in a no-deal scenario are, in fact, very close to the deal the Prime Minister is seeking. Any deal will be relatively ‘thin’ given the UK’s red lines. Both sides accept that it will cover little more than tariff- and quota-free access for most goods. Consequently, regardless of whether there is a deal or not, there will be significant new barriers to trade involving customs checks, regulatory barriers, an end to mutual recognition across a wide variety of products and services, and so on.”

However, in other respects, no deal on the UK–EU future relationship would be very different. Police and judicial cooperation would be made more difficult. The legal framework governing key aspects of fisheries, energy cooperation, financial services, healthcare abroad, data-sharing and air, road and rail connectivity would fall away (although the EU has now proposed a time-limited solution for transport). And there would be significant disruptions in economic and political relations from 1 January 2021.

Scottish Government preparations

The impact of no-deal on UK reserved issues such as cross-border trade, would quickly cascade down into Scottish devolved responsibilities. For example, while goods crossing the border is a reserved matter, ensuring the supply of medicines and medical supplies is essential to the devolved health service. In other significant areas, Scottish devolved responsibilities will be directly-affected by a no-deal scenario. For example, Police Scotland’s access to shared EU databases that assist in tackling criminal activity may be harder or less efficient.

On 8 December 2020, the Cabinet Secretary for the Constitution, Europe and External Affairs, Michael Russell MSP provided an overview of the Scottish Government’s ‘Brexit readiness’ activities. Many of these activities are as related to COVID-19 risks as they are to the end of the transition period.

The Cabinet Secretary described how the Scottish Government will use established governance structures to coordinate its response to the “concurrent challenges” of winter, COVID-19 and the end of the transition period:

“Yesterday, the Scottish Government resilience room for those concurrent risks was activated on a seven-day-a-week basis, and the phased stand-up of the national co-ordination centre and a single Scotland-wide multi-agency co-ordination centre [(MACC)] was commenced. The MACC is led by Police Scotland as part of the national co-ordination structure and works with national and local partners such as the Scottish Fire and Rescue Service, the Scottish Ambulance Service, the Scottish Environment Protection Agency, the Maritime and Coastguard Agency, local authorities and health boards, as well as through the local resilience partnerships.

All those arrangements will build over the next four weeks and will include ministerial oversight through a winter preparedness group, convened by the Deputy First Minister, which has been meeting for some time. Meetings of a smaller ministerial group will start shortly and will become daily after Christmas. Those arrangements will become a 24-hours-a-day operation in the last week of the month and will remain at that level for as long as required.”

The Cabinet Secretary indicated that previous concerns over joint UK-Scottish government planning have “eased”:

“Attendance by devolved Administrations at meetings of the UK Government EU exit operations committee is by invitation only, but that occurred three times last week. After a long period in which there was limited sharing of the information needed for us to liaise effectively and to ensure that all our plans were complementary to those of the other Administrations, I am glad to say that that problem appears to have eased. Last week, we secured access to the daily dashboard, and we will be feeding into it.”

The Cabinet Secretary also described four key themes for the Scottish Government’s preparations. Three of these are outlined below. The fourth relates to making necessary legislative changes.

Protecting people

The Cabinet Secretary pointed to the Scottish Government’s Winter Plan for Social Protection announced on 30 November 2020. This is:

“a £100 million package of measures to support vulnerable people, communities and the third sector, in order to help those on low incomes, children and people at risk of homelessness or social isolation cope with the economic impacts of Brexit, coronavirus and the winter weather.”

This fund is not specifically linked to a no deal scenario and will be implemented even if there is an EU-UK future relationship agreement.

Protecting imports and exports of essential goods

On food, the Cabinet Secretary indicated on 8 December that liaison with food retailers was ongoing and that Food Standards Scotland was a “key partner” in securing supply chains ending in rural areas. The Cabinet Secretary also pointed to the Scottish Wholesale Food and Drink Resilience Fund opened on 5 December 2020 (and now closed). This was a grant fund, worth up to £5 million, targeted at food and drink wholesalers affected by the COVID-19 pandemic, and is not specific to a no-deal scenario.

On medicines, the Cabinet Secretary pointed to stockpiling by pharmaceutical companies, and described that:

“In addition to those arrangements, and in response to lessons learnt from the first wave of Covid-19, we are building a stockpile of around 60 medicines for critical care in intensive care units and supportive care at end of life, as well as supplies of Covid-19 treatments. We have in place arrangements for managing potential shortages, including the Scottish medicines shortages response group, which is clinically led. We will also be making use of new information technology reporting tools to gather real-time data on medicines stockholding and stock usage in hospitals.”

NHS National Services Scotland (NHS NSS) is managing supply issues for medical devices and consumables such as Personal Protective Equipment (PPE). The Cabinet Secretary reported that NHS NSS:

“…is building up stocks of main items at the national distribution centre. Eighty-eight per cent of products are already at the target of six weeks or above, and the remaining items are expected by mid-December.”

Minimising economic impact

The Scottish Government’s business engagement has been channelled though enterprise agencies and the Prepare for Brexit website. This website includes sector-specific advice, however many of its pages continue to state that “In the event of a ‘no deal’, additional advice and information will be given”.

On 8 December, the Cabinet Secretary said:

“Our enterprise agencies have developed mechanisms to identify companies that we anticipate will encounter operational and financial challenges as a result of both EU exit and Covid-19, and are proactively contacting 500 such companies to provide targeted advice and guidance.”

The Cabinet Secretary has previously said that this number “will grow to 1,200 ahead of 31 December”.

Iain Thom
Environment, Rural, Constitution and International Research Unit