No deal Brexit assessment: industry response
Wednesday, February 27, 2019
Print and paper industry business leaders have reacted to the government’s latest impact assessment report on a possible no deal Brexit.
With just 30 days to go until Brexit and no sign of a revamped deal that could gain Parliamentary approval, the prospect of Brexit being delayed appears increasingly likely, and no deal remains a possibility.
The Cabinet Office report, Implications for Business and Trade of a No Deal Exit on 29 March 2019, stated that the UK economy could shrink by as much as 9% in the long-term under a no deal scenario.
“Given the unprecedented nature of the sort of economy-wide adjustment that would be required in a no deal scenario, it is impossible to accurately predict the ability of businesses to adapt. The second order effects on local economies dominated by a small number of industries, or on businesses in the supply chains for those companies, is also hard to predict with precision, although it would be likely to be uncertain and costly," the report said.
BPIF public affairs consultant Carys Davis told PrintWeek: “For print, Brexit really has become a business concern which has almost eclipsed everything else, and a lot of the reason for that is the uncertainty.
“In February there were two announcements aimed at giving businesses more time to cope, but we feel it’s too little, too late. These preparations involve additional costs and time, which will all potentially be wasted. The cost of uncertainty is hugely damaging,” she added.
Mike Dobson, director of public affairs at the Confederation of Paper Industries, said the report made “worrying reading” and underlined the need for “new rigour, understanding and agreement across Parliament to ensure a good deal with the EU is reached”.
He commented: “With a ‘no deal’ comes the potential for difficulties of customs administration and delays at the border, which would impact the paper industry like many other industries, who rely on the smooth movement of goods, such as raw materials and machinery parts.
“While the Brexit merry-go-round continues, many businesses find themselves in a state of limbo, and the almost 1,500 UK enterprises that are engaged in manufacturing paper will be no different, and so a political breakthrough is desperately needed. Otherwise, as outlined in the government report, should ‘no deal’ come to pass, we will see an economic downturn affecting people and business across the UK.”
However, pro-Brexiter Paul Bailey, director at collator manufacturer Col-Tec, said talk of no deal was “scaremongering”.
“No solution is going to be without a bump. I know and most people in business know, that it will be business at the end of the day that sorts it out, not government.
“It’s all academic as I’m sure that a deal will be put together,” he said.
The report also contains a particularly hard-hitting statement about the potential result of no deal on businesses in Northern Ireland, where it said the cumulative impact would be “more severe” and last for longer, while increasing costs would affect the viability of many businesses across Northern Ireland, and could cause them to relocate to the Republic.
Gary White, managing director at Belfast-based Northside Graphics and digitalprinting.co.uk said: “If the UK leaves the EU with a no deal exit this would be very worrying prospect for the Northern Ireland economy as a whole let alone just print businesses,” he said.
“It is worth remembering 55.8% of people in Northern Ireland voted to remain in the EU and not even the ‘local’ pro-Brexit political parties have any desire for a hard border between Northern Ireland and the Republic of Ireland.
“I am still hoping that common sense will prevail and that there will be no customs border on the island of Ireland (or a technologically driven digital one if there has to be one) or any physical customs checks between Northern Ireland and Great Britain, only time will tell.”
Peter Bradley, managing director of the Bradley Group which has operations in Northern Ireland and on the Isle of Man, added: “There will be no hard border, it’s only Brexit nonsense talk – the peace process wouldn’t allow it. We are a matter of weeks away and it would take months or years to set up the infrastructure to do any sort of border.”
On BBC Radio 5 Live’s Wake up to Money programme this morning, Food & Drink Federation chief executive Ian Wright said that Brexit uncertainty and misinformation had already resulted in the production of packaging that may have to be scrapped.
“What we do see is that every day brings a new fear or new concern about something that might go wrong. In the last two or three weeks we’ve seen a real concern about health marks which have to be used on products of animal origin,” he said.
“Everybody thought we would be switching to ‘UK’, in fact we’re not allowed to do that, we have to switch to GB or United Kingdom. Now that means that all the packaging that has been prepared may well be redundant. It means goods may be refused at the border.”
In a recent PrintWeek poll, more than a third of respondents – 36% – said they would like a second referendum, while 32% said their preferred option was a no deal Brexit.