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Brexit readiness report – 08 October 2019

Preparations to ensure that the UK is ready for Brexit on 31 October will be set out in a paper published today by the Chancellor of the Duchy of Lancaster Michael Gove.

The Government has put forward serious and reasonable proposals to the EU and continues to work at pace to secure a deal, but this will require movement from the EU. If we leave without a deal, the Brexit readiness report includes details of the Government’s work to make sure that citizens and businesses are ready for Brexit on 31 October.

The report also sets out the preparation underway to ensure that goods continue to flow smoothly across the UK and EU border after Brexit, with measures in place and information given to traders, businesses and hauliers on what they need to do to prepare before 31 October.

These include:

o the automatic allocation of Economic Operator Registration Indicator (EORI) numbers to 88,000 VAT registered companies across the UK that frequently trade with the EU;

o postponed VAT accounting for both EU and non-EU imports, enabling VAT-registered businesses to wait until their next VAT return to declare and recover import VAT on goods- helping their cash flow and reducing costs at the point of import;

o a Temporary Tariff Regime (TTR) for all imports, including from the EU, supporting consumers, business supply chains and those sectors in the UK economy that would most benefit from support as we leave, for up to 12 months; and

HMRC sending 220,000 businesses guidance on the steps they need to take to import and export after we leave the EU on 31 October.

The Chancellor of the Duchy of Lancaster Rt Hon Michael Gove MP said:

“It is the top priority of this Government, and principal focus of my job, to get ready for Brexit on 31 October with or without a deal. We would prefer to leave with a deal, and continue to work in an energetic and determined way to achieve one, but we must be prepared for all eventualities.

This report sets out what will change if we leave without a deal and explains what the Government is doing to get ready. Significant preparations have been underway for the last three years and these have been accelerated under the Prime Minister’s leadership. At every point, the Government will be candid about any further challenges ahead as well as clear-eyed about the opportunities. Together, government, businesses and citizens are working so that we will be ready for Brexit on 31 October– and can look forward to the future with certainty and confidence.”

In a further move to get the country ready and to help ensure the UK’s health sector is prepared, the Government is today establishing a dedicated ‘Support Unit’ for suppliers of medical goods in the health sector. This will help to ensure that companies have the necessary customs paperwork in place for border arrangements ahead of Brexit on 31 October, if we leave without a deal. These teams of specialists will be able to provide traders operating in the health and social care sector with up-to-date advice and practical guidance on the steps they need to take to prepare.

The Brexit readiness report released today outlines preparations that have been made to support businesses and citizens if we leave without a deal, including:

o significant increases in the number of customs agents at the borders;

o a new import/ export helpline to answer businesses’ questions;

o the largest ever government public information campaign to get public and business owners ready for Brexit;

o organised business readiness events with more than 800 attendees to support businesses to get ready for Brexit, with 29 additional events in the pipeline. Secured additional funding to deliver webinars for EU companies to tell them what they need to do; and

o secured additional freight capacity and worked on preparations with our suppliers and partners, to ensure the stockpile of critical medicines and goods.

https://www.gov.uk/government/news/brexit-readiness-report-published

The full report (159 pages) is available:

No-Deal Readiness Report (pdf)

No-Deal Readiness Report (local copy pdf)

EU Commission takes stock of preparations ahead of the June EU Council (Article 50)

On the 12 June 2019, the EU Commission issued a Press Release on preparations for the UK leaving the EU without a deal.

Ahead of the June European Council (Article 50), the European Commission has today taken stock – in its fifth Brexit Preparedness Communication – of the European Union’s Brexit preparedness and contingency measures, particularly in light of the decision taken on 11 April by the European Council (Article 50), at the request of and in agreement with the United Kingdom, to extend the Article 50 period to 31 October 2019.

In light of the continued uncertainty in the United Kingdom regarding the ratification of the Withdrawal Agreement – as agreed with the UK government in November 2018 – and the overall domestic political situation, a ‘no-deal’ scenario on 1 November 2019 very much remains a possible, although undesirable, outcome.

Since December 2017, the European Commission has been preparing for a ‘no-deal’ scenario. To date, the Commission has tabled 19 legislative proposals, 18 of which have been adopted by the European Parliament and Council. Political agreement has been reached on the remaining proposal – the contingency Regulation on the EU budget for 2019 –, which is expected to be formally adopted later this month. The Commission has also adopted 63 non-legislative acts and published 93 preparedness notices. In light of the extension of the Article 50 period, the Commission has screened all these measures to ensure that they continue to meet their intended objectives.

The Commission has concluded that there is no need to amend any measures on substance and that they remain fit for purpose. The Commission does not plan any new measures ahead of the new withdrawal date.

The Commission recalls that it is the responsibility of all stakeholders to prepare for all scenarios. Given that a ‘no-deal’ scenario remains a possible outcome, the Commission strongly encourages all stakeholders to take advantage of the extra time provided by the extension to ensure that they have taken all necessary measures to prepare for the UK’s withdrawal from the EU. Today’s Communication provides details on the extensive preparations in the EU27 in areas such as citizens’ residence and social security entitlements, customs and taxation, transport, fishing, financial services as well as medicinal products, medical devices and chemical substances.

In a ‘no-deal’ scenario, the UK will become a third country without any transitional arrangements. All EU primary and secondary law will cease to apply to the UK from that moment onwards. There will be no transition period, as provided for in the Withdrawal Agreement. This will obviously cause significant disruption for citizens and businesses and would have a serious negative economic impact, which would be proportionally much greater in the United Kingdom than in the EU27 Member States.

Full details at

‘No-deal’ Brexit: European Commission takes stock of preparations ahead of the June European Council (Article 50)

EU-press-release_IP-19-2951_en (pdf)

Other associated documents:

Communication From The Commission To The European Parliament, The European Council, The Council, The European Central Bank, The European Economic And Social Committee, The Committee Of The Regions And The European Investment Bank

EU_Preparations_DOC_1 (pdf)

ANNEX 1 to the Communication From The Commission To The European Parliament, The European Council, The Council, The European Central Bank, The European Economic And Social Committee, The Committee Of The Regions And The European Investment Bank

EU_Preparations_DOC_2 (pdf)

ANNEX 2 to the Communication From The Commission To The European Parliament, The European Council, The Council, The European Central Bank, The European Economic And Social Committee, The Committee Of The Regions And The European Investment Bank

EU_Preparations_DOC_3 (pdf)

It is also worth noting that if the UK leaves without an agreed deal with the EU, that they would insist on some pre-conditions prior to discussing a future trade agreement with the UK:

As outlined by President Juncker in the European Parliament on 3 April 2019, should a ‘no-deal’ scenario occur, the UK would be expected to address three main separation issues as a precondition before the EU would consider embarking on discussions about the future relationship:

These are:

(1) Protecting and upholding the rights of citizens who have used their right to free movement before Brexit,

(2) Honouring the financial obligations the UK has made as a Member State and

(3) Preserving the letter and spirit of the Good Friday Agreement and peace on the island of Ireland, as well as the integrity of the internal market.

EU completes preparations for possible “no-deal” scenario on 12 April

Recent Press Release from the EU indicates that the EU has completed its preparations for a possible “no-deal” scenario on 12 April.

http://europa.eu/rapid/press-release_IP-19-1813_en.htm

(Here’s the text – check the above link for all detail including embedded links)

Brexit preparedness: EU completes preparations for possible “no-deal” scenario on 12 April

Brussels, 25 March 2019

As it is increasingly likely that the United Kingdom will leave the European Union without a deal on 12 April, the European Commission has today completed its “no-deal” preparations.

At the same time, it continues supporting administrations in their own preparations and urges all EU citizens and businesses to continue informing themselves about the consequences of a possible “no-deal” scenario and to complete their no-deal preparedness. This follows the European Council (Article 50) conclusions last week calling for work to be continued on preparedness and contingency. While a “no-deal” scenario is not desirable, the EU is prepared for it.

Following a request by Prime Minister Theresa May, the European Council (Article 50) agreed on Thursday 21 March to extend the UK’s departure date to 22 May 2019, provided the Withdrawal Agreement is approved by the House of Commons by 29 March 2019 at the latest. If the Withdrawal Agreement is not approved by the House of Commons by then, the European Council has agreed to an extension until 12 April 2019. In that scenario, the United Kingdom would be expected to indicate a way forward before this date.

While the European Union continues to hope that it will not be the case, this means that if the Withdrawal Agreement is not ratified by Friday 29 March, a “no-deal” scenario may occur on 12 April. The EU has prepared for this scenario and has remained united throughout its preparations. It is now important that everyone is ready for and aware of the practical consequences a “no-deal” scenario brings.

A “no-deal” scenario

In a “no-deal” scenario, the UK will become a third country without any transitionary arrangements. All EU primary and secondary law will cease to apply to the UK from that moment onwards. There will be no transition period, as provided for in the Withdrawal Agreement. This will obviously cause significant disruption for citizens and businesses.

In such a scenario, the UK’s relations with the EU would be governed by general international public law, including rules of the World Trade Organisation. The EU will be required to immediately apply its rules and tariffs at its borders with the UK. 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.

Similarly, UK citizens will no longer be citizens of the European Union. They will be subject to additional checks when crossing borders into the European Union. Again, Member States have made considerable preparations at ports and airports to ensure that these checks are done as efficiently as possible, but they may nevertheless cause delays.

The EU’s “no-deal” preparedness and contingency work

Since December 2017, the European Commission has been preparing for a “no-deal” scenario. It has published 90 preparedness notices, 3 Commission Communications, and has made 19 legislative proposals (see below).

The Commission has held extensive technical discussions with the EU27 Member States both on general issues of preparedness and contingency work and on specific sectorial, legal and administrative preparedness issues. The Commission has now also completed its tour of the capitals of the 27 EU Member States. The aim of these visits was to provide any necessary clarifications on the Commission’s preparedness and contingency action and to discuss national preparations and contingency plans. The visits showed a high degree of preparation by Member States for all scenarios.

Member States have also been engaged in intensive national preparations. An overview of residency rights in the EU27 Member States is available here, as well as direct links to national preparedness websites.

The UK and the WTO – Article by Dr Liam Fox

When we speak for ourselves, we flourish – and our status in the WTO is no exception” is an article for the Telegraph newspaper written by Dr Liam Fox, which was also published on the Government’s website on the 2nd November 2018.

https://www.gov.uk/government/speeches/when-we-speak-for-ourselves-we-flourish-and-our-status-in-the-wto-is-no-exception

The article attempts to clarify misconceptions on WTO negotiations and goods schedules.

All content is available under the Open Government Licence v3.0

As part of our work to set up the UK’s own trade policy for the first time in over 40 years, we are currently establishing our independent goods “schedule” at the World Trade Organisation (WTO).

The UK is a full and founding member of the WTO and our status is no different from that of, say, Canada or Japan. But under the EU treaties, EU member states have agreed to speak with one voice on trade. In the WTO that means the Commission represents the member states. It also means the UK’s rights and obligations are bound up with those of the other EU member states in common “schedules”. One for goods and one for services, these are the official WTO documents that describe the tariffs, quotas, subsidies, and regulatory commitments that underpin our position in the multilateral trading system.

Before we leave the EU, the UK needs to separate its schedules from the EU’s. As part of this process, WTO members have a chance to respond. A small number expressed reservations and would like to discuss further. Last week, I announced that the UK intends to open negotiations at the WTO to address these concerns. This has been purposefully misunderstood by those wishing to stop Brexit as evidence that our WTO strategy isn’t working.

They are wrong. It’s not unprecedented for a WTO member to trade on schedules that have not been approved by every other WTO member. In fact, the EU hasn’t had an up to date certified goods schedule since 2004, and certainly doesn’t have an updated services one.

The government’s policy since October 2016 has been to establish the UK’s independent position in the WTO by March 2019 so that we are prepared for a range of possible Brexit outcomes. That remains our policy, and last week’s announcement is evidence that it is on track, not that it has failed.

Under WTO procedures, if changes to a country’s schedule are of a purely technical and formal nature, members can use a process called “rectification” to make those changes. That is why we decided to replicate, as far as possible, the UK’s existing rights and obligations. We have replicated thousands of tariffs lines in our EU schedules into our UK-only schedules.

We always knew agricultural quotas and subsidies would be different. You cannot copy and paste a quota or subsidy for the EU into the UK schedule: it would represent a major change to our agricultural trade on the one hand, and a major increase in the UK’s rights to subsidise agriculture on the other. The UK and the EU came up with a methodology last year for dividing the EU’s existing agricultural quotas and subsidies, based on existing trade flows with third countries. We knew there would be objections, because the countries that rely most on these quotas – the US, New Zealand, the major Latin American exporters – have been telling us, and the EU, from the outset.

We nevertheless used this methodology in our goods schedule and submitted it to the WTO membership, for 2 main reasons. First, we believe this represents a fair reproduction of the rights under the EU’s existing schedule. And second, our priority was to first establish the UK’s separate schedule in the WTO and only then to use other WTO processes that exist to address any objections to specific elements of it.

The objections we have received were therefore neither unexpected, nor a failure of our strategy. We have always been open to having more detailed discussions with partners once we had established our own schedule. That is why I have announced our intention to launch negotiations on these objections.

This process is unlikely to be fully complete by the time we leave the EU. But objecting WTO members cannot veto the UK trading on our uncertified goods, or services, schedules after next March. In the unlikely event of a “no deal” between the UK and EU, we will be able to take full control of our trade policy in March 2019 based on the schedule we have set out.

As the Director General of the WTO has said, the consequences of no deal would not be a walk in the park but nor would it be the end of the world. There will be difficult moments, but the UK will be ready to take back full control in the WTO from next March.

Dominic Raab’s update on EU Exit negotiations

Dominic Raab’s statement in the House regarding the UK government position on Brexit negotiations, on 9 October 2018.

https://www.gov.uk/government/news/secretary-of-state-dominic-raabs-statement-update-on-eu-exit-negotiations

With permission, Mr Speaker, I would like to update the House on the progress in negotiations to leave the EU, and the government’s planning for No Deal.

Negotiations

Since I last updated the House, our negotiations with the EU have continued and intensified. Over the recess break, we have been engaging constructively with our EU counterparts.

Let me take the main areas of the negotiations in turn.

On the Withdrawal Agreement, while there remain some differences, we are closing in on workable solutions to all the key outstanding issues, building on the progress we made during the summer on issues such as data and information, the treatment of ongoing police and judicial co-operation in criminal matters, and ongoing Union judicial and administrative procedures after the date of exit.

We have also been discussing proposals on the linkage needed between the Withdrawal Agreement and the Future Relationship, and the EU is engaging constructively.

On the Northern Ireland Protocol, we remain committed to the undertakings we made in the Joint Report back in December, to agree a backstop in case there is a delay between the end of the Implementation Period and the entry into force of the treaty on our future relationship.

That was agreed to avoid any risk of a return to a hard border in the intervening period. But we will not accept anything that threatens the constitutional or economic integrity of the United Kingdom. Creating any form of customs border between Northern Ireland and the rest of the UK, which is what the EU had proposed, would put that at risk and that it is unacceptable.

As my Rt Hon friend the Prime Minister has said, it is not something she, nor any British Prime Minister, could conceivably agree to. We are engaging with the EU on our alternative proposals that preserve the integrity of the UK. They will be in line with the commitments we made back in December, including the commitment that no new regulatory barriers should be created between Northern Ireland and the rest of the UK unless the Northern Ireland Executive and the Assembly agree.

On the Future Relationship, we continue to make progress, for example, on both the internal and the external security arrangements for future cooperation, although there is still some way to go.

And as the House will know, the Prime Minister presented our proposals on the economic partnership to EU leaders, at the informal Salzburg Summit. We understand that the EU has raised some concerns, particularly around the distinction between goods and services under the common rule book and with respect to the Facilitated Customs Arrangement. We continue to engage constructively with the EU, we continue to press our case.

The UK’s White Paper proposals are the best way of ensuring there is continued frictionless trade in goods after Britain leaves the EU, whilst fulfilling the joint commitment to avoid a hard border between Northern Ireland and Ireland, and respecting the referendum.

These negotiations, Mr Speaker, were always bound to be tough in the final stretch. That is all the more reason why we should hold our nerve, stay resolute and focused, and I remain confident that we will reach a deal this autumn. Because it is still in the best interests of the UK, and the European Union.

It is the best way of protecting trade between Britain and the EU, trade which underpins millions of jobs across Europe.

It is the best way of making sure we continue to cooperate seamlessly on security matters, to tackle crime and terrorism to keep UK and EU citizens safe.

And it is the best way to avoid a hard border in Northern Ireland that would adversely affect communities living there, or indeed separating Northern Ireland from Great Britain which we will not countenance.

To achieve these aims, the UK has brought forward serious and credible proposals. We continue to engage with the EU to press our case, and to better understand the nature of some of their concerns. Equally, it is time for the EU to match the ambition and pragmatism that we have shown.

No Deal

Mr Speaker, while we intensify negotiations to secure the deal we want,the deal that we expect, we are also expediting preparations for no deal. In case the EU do not match the ambition and pragmatism we have demonstrated.

As the Prime Minister stated on 21 September after the Salzburg Summit.

The government has made clear we will unilaterally protect the rights of EU citizens in the UK in the event of No Deal. To the 3 million here, we say: you are our friends, our neighbours, our colleagues, we want you to stay. And we will be setting out all of the details as soon as is practical.

We also now urge the EU and all its member states to step up and give UK citizens on the continent the same reassurances. Mr Speaker it is time, on both sides, to provide all our citizens with that comfort and with that confidence.

Since I last updated the House in September, we have published 52 more technical notices, in two further batches.

They inform people, businesses and other key stakeholders of the steps they need to take, if we don’t reach a deal with the EU.

They cover a wide range of sectors, building on other work that has taken place across government over the last two years. They enable us to prepare the UK for Brexit irrespective of the outcome of the negotiations. They acknowledge that there are risks to a no deal scenario. But they also demonstrate the steps we will take to avoid, mitigate and manage any potential short-term risks and disruption.

Overall now we have published 77 technical notices which form part of the sensible, proportionate, measures that we are taking to prepare the country for every eventuality.

Mr Speaker our most recent batch of technical notices were published on the 24th of September they are set out in a written Ministerial statement today. There are 24 and they range from aviation, and the advice for airlines on the impact of ‘no deal’ and the actions for them to consider to maintain services on the day we leave the EU, through to car insurance, and the arrangements to ensure Green Cards will be available free of charge from insurance companies to enable UK drivers to continue to drive on the continent.

The publication of the technical notices enables further engagement as part of our No Deal planning.

So for example, our earlier technical notice on VAT set out the VAT changes that companies will need to prepare for when importing or exporting goods from the EU, when supplying services to the EU, or interacting with EU VAT IT systems. That one was welcomed by the British Chamber of Commerce, and we are grateful to them and to all of our stakeholders for their constructive ongoing engagement on that necessary planning.

More broadly, I met with the British Chamber of Commerce, the CBI, the IoD, EEF and the Federation of Small Businesses as part of the government’s Business Advisory Group on the 17th of September, to make sure we are explaining our negotiating proposals and No Deal planning, and listening to UK businesses of all sizes, and across all sectors.

We will keep providing people and businesses with the advice they need as we negotiate our exit from the European Union.

We also keep working with the devolved administrations on all aspects of our planning for exit. I attended the joint ministerial committee on the 13th September. It has now met 12 times, and our last meeting was a valuable opportunity to give the devolved administrations a full update on the negotiations, as well as discuss the necessary No Deal planning. We continue to listen very carefully to all of their views.

Mr Speaker, that is the way, with concerted effort on all fronts, that we have put ourselves in the best possible position to make the best of Brexit.

And I commend this statement to the House.

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