No-deal Brexit would be damaging and dangerous, say business leaders

Brexit documents have laid bare the grisly prospect of no deal, with the likelihood of chaos at ports, disruption to food supplies and increased business costs, the government has been warned.

Ian Wright, chief executive of the Food and Drink Federation, said his industry would be hit by “ever more” administrative burdens.

He said: “Our politicians act as if they have six more months to conclude a withdrawal agreement.

“In fact, today’s official confirmation of just how bad this scenario would be is bound to encourage businesses and shoppers to consider – now – stockpiling, buying ahead, hedging currency risk, procuring additional warehousing, relocating production to the EU, and other practical measures to secure supply.

“These actions in turn will increase prices and begin to distort markets immediately.

“The consequences of a no-deal Brexit for UK food and drink are starting to be felt already. The impacts will snowball as we get closer to March 2019.

“Instead of lecturing the EU, the government must secure a withdrawal agreement imminently or begin the arrangements to extend the Article 50 deadline so that they can do so in an orderly fashion.”

Mike Spicer of the British Chambers of Commerce said: “While some businesses will be reassured by some of the details in these notices, such as around IP protection and geographical indications, the admission that loss of market access is a possibility for others will be deeply unsettling to those affected.

“There will be major concerns in industries like aviation and road haulage, that operate routinely across borders at European scale, that their markets will be fragmented by new licensing or regulatory frameworks.”

Federation of Small Businesses chairman Mike Cherry said: “Last week’s summit in Salzburg laid bare the volatility of the current Brexit negotiations and has heightened concerns among our small businesses whose confidence has already dipped into negative territory.

“These worries would have only intensified after studying the latest government no-deal technical notes. So far, the Government has released three tranches of information that have really made clear that a chaotic no-deal Brexit will be damaging and dangerous for our small firms.

“Many smaller firms rely on hauliers for delivering goods across the EU and for bringing goods in. A no-deal Brexit could pose a real threat to these businesses as EU community licences issued by the UK might not be automatically recognised by the EU.”

Paul Everitt, chief executive of aviation group ADS, said: “It is clearer than ever that a no-deal Brexit risks disruption to air passengers and businesses in aviation, aerospace and many other sectors across our economy.”