07 February 2018

The UK Government isn’t talking to business about Brexit preparations. This leaves them with little choice but to look to the EU for details, argues Joe Owen.

Talks on Brexit transition begin this week, and the British Chambers of Commerce today demanded more detail on the UK’s position. They hope that a swift agreement on the implementation period, to be signed off at the European Council next month, will settle the stomach of UK business.

But under the Government’s current approach to transition, the best possible outcome in March is a political agreement – a signal of intent, not a legally binding safety net.

The no deal scenario, something that neither the UK nor the EU wants, will be on the table until the Withdrawal Agreement is ratified – likely to be in early 2019. Before that point, preparations for the worst-case scenario will need to continue.

That means plans for a cliff-edge Brexit – whether in Whitehall departments or for business – cannot be discarded even if a political agreement on transition is reached in March.

Nothing is agreed until is everything is agreed, and the future relationship has yet to be discussed.

The Public Accounts Committee has today criticised government departments for being too slow in their practical preparations, and Whitehall’s tight-lipped approach means the same could be true for business too.

The Government isn’t telling business what Brexit means for them

The UK Government is preparing for no deal and many UK businesses have contingency plans of their own. But we have yet to see any formal communication or guidance from government to business that details what that scenario would look like - and how the Government plans to handle it.

Business is still waiting for answers to big questions such as how the UK will treat imports from the EU, let alone more detailed technical questions such as the kind of labelling UK baby-food manufacturers will need to use after Brexit.

None of that detail is addressed in the only public guidance to business the Government has published so far – a bland open letter from David Davis, Philip Hammond and Greg Clark holding out continuity through the yet-to-be-agreed transition period.

For public bodies, who are often the key intermediaries between government and business, the lack of guidance from the Government on a no deal scenario makes meaningful conversation difficult.

The EU is taking preparations for no deal more seriously

If a business in the UK wants to understand how things might change in a no deal scenario, they are better off looking to Europe.

The European Commission is releasing guidance documents so businesses can prepare for Brexit. There are 25 available on their website that highlight "legal and practical" implications, covering the detail in areas from seafarers, licensing and aviation to animal breeders and products of human origin.

European agencies are putting out their own detailed advice too. The European Chemicals Agency has, for example, pages on its website dedicated to Brexit preparations.

Member states are stepping up too. The Netherlands and Ireland, two countries very exposed to Brexit, have websites to keep businesses up to date and provide support. The Dutch website has a Q&A function, links to helpful research or documents and a list of key events. The Irish site has a scorecard that helps businesses think through preparations, while Enterprise Ireland offers a 5,000 euro grant to small and medium sized businesses wanting to develop a Brexit action plan.

The UK Government must get better at informing business on Brexit

What is concerning for the UK is not the absence of snazzy Brexit websites with long lists of guidance documents, but the failure to come clean on what no deal really looks like.

Minimising disruption on ‘day one’ after Brexit will require both business and government to be ready. This involves hundreds of thousands of organisations working to timelines that would be considered heroic by usual standards. An open letter signed by three Cabinet Ministers is not enough.

Businesses need to know exactly what will be needed and whether they are expected to foot the bill. Institute for Government research into border preparations showed some are expecting government grants to help them afford the changes.

In the absence of any meaningful advice from government, businesses are left with a choice. They can either draw their own conclusions about what comes next, working to plans that could be incompatible with the Government’s approach. Or they can sit tight and hope they haven’t missed their opportunity to prepare, and assume a cunning plan exists somewhere in Whitehall that can guarantee the cliff-edge won’t come.

For those businesses that do want to make headway, the closest they can get to clarity is coming from the continent.