Adam Johnson, director of Leeds-based Tudor International Freight, said it was now nearly a month since EU leaders agreed to defer the UK’s departure from the bloc to 31 October, if necessary. However, little discernible urgency had been evident since then in the quest to resolve the domestic political deadlock. This had seen the draft withdrawal agreement Prime Minister Theresa May concluded with the EU in November rejected decisively three times by MPs, but no Parliamentary consensus emerge on what should replace it.
Mr Johnson said: “When EU leaders agreed the extended deadline in April, European Council president Donald Tusk pleaded with the UK not to waste this additional time. However, there are now disturbing signs that this is exactly what’s happening and the horrors of a no-deal departure, the default option, which would be the worst possible outcome for the food manufacturing sector’s EU traders, are once again looming into view.
“This prospect is particularly significant now, as there are signs that some EU countries are unwilling to grant a further extension beyond 31 October, if no agreement has been reached by then, and unanimity among them is necessary if an additional deferral is to take effect.”
Mr Johnson said the current deadline was always effectively tighter than it may have appeared, given that events such as the Easter and summer parliamentary recesses, the local and EU Parliamentary elections, the UK party conferences - and, potentially, a change of Prime Minister and general election - all fell within the extended period. There was now a danger that the reprieve would not prove productive.
He said: “Talks between representatives of the government and Labour opposition have now been taking place for five weeks without any discernible sign of agreement. There were, of course, cynics about this exercise from the beginning, claiming that the Conservatives saw it mainly as a means of demonstrating to the EU that progress was being made, so the deadline should be extended.
“Such people also claimed that Labour felt it had to be seen to engage constructively but in fact didn’t want its fingerprints on a settlement. This was because any form of Brexit is almost certain to be economically damaging and prove unpopular with many people, including Labour members and voters, most of whom are anti-Brexit.”
Mr Johnson said reports in last weekend’s newspapers indicated Mrs May was offering Labour a deal including temporary UK membership of a customs arrangement with the EU, to be reviewed in 2022, plus selective alignment on EU single market regulations.
However, shadow chancellor John McDonnell reacted by accusing the Prime Minister of jeopardising the negotiations through allowing such details to leak, saying he had “no trust” in her and referring to her “bad faith”. Labour deputy leader Tom Watson also said his party would not resolve the impasse by “bailing out a failed Tory deal”.
Mr Johnson said: “Even if an agreement can be reached between the government and official opposition, it must be doubtful that it will be endorsed by MPs. This is because of the numbers on the Conservative benches opposed to any form of post-Brexit customs union and the Labour side insisting on a confirmatory public vote, which such a deal seems unlikely to include, for example. And, even if this Parliamentary hurdle could be cleared, the agreement would also, of course, have to be approved by the EU, which may also prove problematical.”
He said the continued lack of domestic political progress meant the prospect of a nightmare no-deal departure was again emerging.
Mr Johnson said: “A cliff-edge Brexit would not be a destination but the worst possible holding place for the manufacturing sector’s EU traders, pending almost inevitable future talks between the UK and the bloc, with which our relationship would have soured. A no-deal departure would, among other consequences, offer no transition period to these businesses, as well as knocking them and other companies out of dozens of free trade deals the EU has agreed with outside countries overnight. Their exports would also become subject instantly to the highest possible tariffs, plus other costs and delays which would see their competitiveness reduced.
“Given these adverse effects, it’s hardly surprising the businesses we service are becoming increasingly anxious again about the continuing stasis at Westminster.”
