The British Retail Consortium has reiterated that a no-deal Brexit would be catastrophic for retailers, after the government suffered another defeat in the House of Commons overnight.
Three amendments to the Prime Minister’s Withdrawal Agreement were tabled by MPs ahead of a parliamentary vote yesterday afternoon, along with a government motion calling on MPs to reiterate support for the Brexit strategy agreed in January.
The government’s motion was defeated, as too were two of the three amendments; the other of which was withdrawn. Despite the defeat, a spokesperson for the government insisted that the possibility of the UK leaving the EU without a deal remains “on the table”.
William Bain, European and international policy adviser at the BRC, said that a no-deal Brexit would be “highly sub-optimal” for UK retailers, particularly those that export or import products from the EU.
“Our members will all be prepared as best they can for a no-deal scenario and are taking every step that the government has asked them to take and that their customers would expect. But, I think it’s very clear that no-deal is highly sub-optimal.
“No-deal will mean incredible uncertainty about the delays that would be faced in terms of getting goods through the Dover Straits into Calais and beyond. Or from Belfast to Dublin, via Holyhead.”
Port and tariff uncertainty
Bain said there were still a number of questions the government had to answer about the trading of goods between the UK and EU following a no-deal Brexit, from how delivery trucks would move through ports such as Calais to the time it would take for them to be checked.
“These things will have a massive impact in terms of delays and in terms of when customers can have goods delivered. While we can anticipate what might happen, we won’t know exactly what will happen until we’re in that scenario.”
Bain also reiterated that much higher tariffs would be placed on goods being both imported and exported in the event of no deal – which would end up being passed on by the retailer to the consumer.
“Unless something changes in terms of what the UK Cabinet decides on applied tariffs, then again in imports the UK would be looking at a 44% applied tariff on cheddar cheese from Ireland; 38% tariff in terms of imports of beef; 28% in terms of tomatoes.
“You can do the maths and see how it’s very hard to see any scenario where the costs of these higher import charges for getting everyday goods like lettuce, like tomatoes, like soft fruits, don’t get passed on to the consumer.”
The BRC wrote a letter to MPs in late January, warning that supermarkets could be left with “empty shelves and higher food prices” in the event of a no-deal Brexit.