Rashmi Dube: The consequences of No Deal Brexit for Yorkshire

As we enter August, it is a time for most of us to unwind before we hit the last four months of the year.
The Prime Minister is holding meetings over his plan for Brexit. Photo: Daniel Leal-Olivas/PA.The Prime Minister is holding meetings over his plan for Brexit. Photo: Daniel Leal-Olivas/PA.
The Prime Minister is holding meetings over his plan for Brexit. Photo: Daniel Leal-Olivas/PA.
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Some of course we can foresee but just cannot predict the consequences. Once such variable is Brexit. Yes, the wolf is at the door and the question is what we do as businesses who feel as if we are on the sidelines.

Do we have any power in our voice?

Farming regions have much to lose if Mr Johnson gets Brexit wrong. Photo: Adrian Dennis/PA WireFarming regions have much to lose if Mr Johnson gets Brexit wrong. Photo: Adrian Dennis/PA Wire
Farming regions have much to lose if Mr Johnson gets Brexit wrong. Photo: Adrian Dennis/PA Wire

In general, from a business perceptive I have found that many are worried about a no-deal Brexit. The Institute of Chartered Accountants in England and Wales have indicated that business confidence has declined, stating “…that a fifth of all businesses and a quarter of smaller firms are having difficulties…” (Sunday Times) which is a combination of the possibility of a no deal and late payments (see last week’s column).

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EY’s current research shows “Should the UK leave without an agreement, the City will be less accessible to the EU…” with about 9 per cent of the financial services companies moving their business abroad.

There is also concern at the impact a no deal will have on pharmaceuticals, the accessibility of drugs and agriculture and the lack of grants. Broken down to fundamental basics, the question is what are the financial advantages from both sides, and how do we negotiate?

The new Prime Minister has approached the negations from a new stance – and as anyone in business or the legal industry knows, if the old negotiations have not worked and we are coming to the wire, we have to play hard ball in order to get the job done.

Farmers remain fearful of the no-deal Brexit advocated by Boris Johnson.Farmers remain fearful of the no-deal Brexit advocated by Boris Johnson.
Farmers remain fearful of the no-deal Brexit advocated by Boris Johnson.

The question is do we have anything the EU may want and is the Prime Minister’s strategy of playing chicken going to work?

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If we looked at the financial implications, it would appear that it does give us some negotiating power. According to The UK Statistics Authority, the EU membership fee figure is £19bn a year, or £350m a week, but this is “not an amount of money that the UK pays to the EU each year”.

The EU provides us with rebates and the figure then drops down to about £250m a week.

If we accept these figures, it would appear that the Prime Minister just may have some ammunition; surely the EU is not going to want to lose this amount of money and just as a reminder, Halloween October 31, 2019, is the date we leave with a deal or no deal.

Not since the Second World War have times been so turbulent, says Beckie Hart. Photo: Yui Mok/PA WireNot since the Second World War have times been so turbulent, says Beckie Hart. Photo: Yui Mok/PA Wire
Not since the Second World War have times been so turbulent, says Beckie Hart. Photo: Yui Mok/PA Wire

So, what are some of the consequences of a no deal Brexit?

Trade:

The UK would revert to World Trade Organisation rules on trade.

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It is likely that the price of imported goods in shops would go up in the short term. In terms of manufacturing, which is part of the fabric of the North, some British-made products may be rejected by the EU as new authorisation and certification might be required, and some may consider moving their operations to the EU to avoid delays in components coming across the border.

Money:

Although the Government would not have to pay the annual £13bn contribution to the EU budget, we would lose out on some EU subsidies; in particular the Common Agricultural Policy gives £3bn to farmers.

However, I would suspect that it is likely that both the EU and the UK will have to honour financial commitments under the 2019 budget.

The Irish border:

This would remain a concern. The issue of the border between Northern Ireland and the Republic would remain unresolved.

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The UK Government has said it would aim to avoid a hard border and, for a temporary period, there would be no new tariffs on goods crossing the border from Ireland into Northern Ireland.

For many businesses, it is feeling like someone has put us on a rollercoaster ride, a ride that some of us may have not chosen to be in and we just don’t know what to expect – it could all turn out to be a great big thrill or seriously harmful to our health.

All we want is some form of idea of what is going to happen next so we can plan ahead – other than my Halloween costume.