Brexit round-up – 02/08/19

Extra £2.1bn funding to prepare for a no-deal Brexit

The Government has announced that an extra £2.1bn of funding will be made available to prepare for a no-deal Brexit. The plans include more Border Force officers, upgrades to transport infrastructure at ports, money for stockpiling medicines to ensure continued supplies and a national programme to help businesses. Sajid Javid commented that “this additional £2.1bn will ensure we are ready to leave on 31 October – deal or no-deal.”

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Chief Brexit negotiator warns the EU not to underestimate the new Prime Minister

David Frost, the chief Brexit negotiator has told his colleagues that it would be a mistake to underestimate Boris Johnson and told them that they should have “no doubt about this Government’s commitment to the 31 October date.” Michael Gove has said that there will be no delays in exiting the EU, and “it’s [his] job to get the country ready.” Meanwhile, the Confederation of British Industry has warned that neither the UK nor the EU is ready for a no-deal Brexit and whilst it has published practical steps it says countries and firms can take, “the unprecedented nature of Brexit means some aspects cannot be mitigated.”

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The Government has assumed a “no-deal” Brexit will happen

Boris Johnson has put Michael Gove in charge of preparing for a no-deal Brexit and has allegedly told him to chair no-deal meetings seven days a week until Brexit is delivered. Gove has said that he had hoped EU leaders might open up to the idea of striking a new deal, but added that “we must operate on the assumption that they will not.”

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No-deal Brexit up to the EU

Boris Johnson has said, on his first Welsh visit, that it is the EU’s call whether the UK leaves the EU without a deal. Wales’ First Minister said he emphasised to the Prime Minister the “catastrophic effect” a no-deal Brexit would have on the Welsh economy, and the Prime Minister provided assurances of support for manufacturing and agriculture in such a scenario. Many Welsh farmers are heavily reliant on free trade with the EU. If the UK leaves without a deal many farmers would face significant tariffs on their exports to EU countries, including at least 40% tariffs on Welsh lamb. The Prime Minister has said that there was “every chance” a Brexit deal with the EU could be struck, but the existing agreement with the EU “has to go.”

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Housebuilders warn standard of homes could deteriorate due to Brexit uncertainty

The standard of homes being built in the UK risks deteriorating as some builders have started laying off staff and relying more frequently on sub-contractors because of “Brexit uncertainty” and fears of a no-deal departure from the EU. The Federation of Master Builders (FMB) has warned that contractors are less likely to “build to the right standard” and relying on them could lead to “reputation-damaging mistakes.” A survey found that firms were reluctant to directly employ workers because of the risks of “economic shock-waves” if the UK leaves the EU this year. The survey also revealed a drop in employment among FMB members for the first time in over 5 years.

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Government plans to buy up hundreds of thousands of tonnes of unsold lamb unworkable

The Government has plans to buy tonnes of unsold lamb in the event of a no-deal Brexit but its plans have been labelled ‘unworkable’ due to a lack of storage space for the meat. The Cold Chain Federation’s Chief Executive, Shane Brennan, said that “no-one in Government has spoken to the industry about where they’ll put the lamb if they buy it.” The proposal, which was drawn up by Michael Gove, provides that the Government would set aside £500m to buy excess lamb and beef at a predetermined price. However, cold storage businesses estimate that they will be at 96% capacity by September this year and Mr Brennan says that “capacity could not be increased quickly, because planning and building a new cold-storage warehouse takes about three years.”

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If you have any questions about any of the issues which are raised, or would like to discuss your own organisation’s options in the lead-up to Brexit, please do not hesitate to get in touch.