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Industry ‘no deal’ disruption fears persist despite Brexit delay

With the UK presently scheduled to leave the UK in April, the EU has set out plans to prepare member states for a ‘no deal’ scenario that is expected to see significant delays in border controls

Delaying the UK’s exit from the EU until April has failed to address industry fears over the significant potential damage to the building services sector from a ‘no deal’ Brexit, a major manufacturer’s association has warned.

The EURIS Taskforce, which represents a large number of UK manufacturers from multiple sectors with a collective turnover of £148bn, has warned that the UK is still scheduled to leave the EU without an agreement in less than a month.

Howard Porter, chair of the EURIS Taskforce and the chief executive of BEAMA, expressed caution over the how EU’s decision to extend the UK’s membership of the EU until next month may safeguard trade and supply chain stability in the longer-term.

“We welcome the extensions of the UK’s exit from the EU in that these are intended to reduce the risk of a no-deal Brexit and the significant long-term damage that would result from that to our members and all of UK industry,” he said.

“If the extension does not lead to a political resolution that avoids border delays, customs costs and regulatory confusion then that worst damage will only be delayed.”

Prime Minister Theresa May was last week permitted by the EU to delay Brexit until April 12. An additional delay was offered until May 22 should MPs back the withdrawal agreement that the prime minister agreed with the EU. This agreement has already been overwhelmingly rejected twice in the Commons.

Discussions are still underway to determine whether a third such vote will be held this week alongside MPs pushing to hold ‘indicative votes’ to try and determine a parliamentary preference for alternative options to proceed with Brexit. This could include a longer-term rethink of the Brexit process to ensure continued membership of the single market.

EURIS, along with a number of influential trade bodies in the building services sector such as BESA, have said that a no deal Brexit is the worst possible outcome for the construction sector, which has continued to demand certainty over the government’s intentions for exiting the EU. The House of Commons has also voted earlier this month to ensure that a no deal Brexit is avoided at all costs, but this motion does not formally commit government to avoid such an action.

EU contingencies

The European Commission has published its preparations to better brace all remaining member states for the impacts of a ‘no deal’ Brexit.

This has included a range of contingencies concerning commitments to EU-budgeted programmes in the UK, ensuring uninterrupted financial services functions and protecting mutual climate change commitments.

However, the European Commission has warned that a failure to ensure a withdrawal agreement is in place would see EU tariffs and other rules that apply to non-EU members at the UK’s borders.

The commission stated, “This includes checks and controls for customs, sanitary and phytosanitary standards and verification of compliance with EU norms. Despite the considerable preparations of the member states’ customs authorities, these controls could cause significant delays at the border.”

“UK entities would also cease to be eligible to receive EU grants and to participate in EU procurement procedures under current terms.”

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