British Businesses Plead for Time to Adjust to Brexit Reality

British businesses have welcomed a Brexit trade deal with the European Union but are pleading for a grace period to allow them to adjust to new measures and regulations.

U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen hailed the historic brokering of an agreement on Christmas Eve, more than four years after Britain first voted to leave the union. However, the accord has landed just days before the Brexit transition period ends on Dec. 31, giving businesses little time to prepare for a new relationship with the nation’s most important trading partner.

Although the deal has removed the prospect of costly tariffs and quotas on goods, there are still a raft of changes to come, from new licensing standards to paperwork requirements. The Covid-19 pandemic also makes preparation all the more challenging.

“Coming so late in the day it is vital that both sides take instant steps to keep trade moving and services flowing while firms adjust,” Tony Danker, director general of the Confederation of British Industry, the U.K.’s biggest business lobby, said in a statement. “We need urgent confirmation of grace periods to smooth the cliff edge on everything from data to rules of origin and we need to ensure we keep goods moving across borders.”

British Businesses Plead for Time to Adjust to Brexit Reality

‘Adjustment Period’

Other business groups covering sectors from auto manufacturing to small enterprises also weighed in.

“A phase-in period is critical to help businesses on both sides adapt and efforts should now be sustained to ensure seamless implementation,” said Mike Hawes, chief executive officer for the Society for Motor Manufacturers and Traders.

Stephen Phipson, chief executive officer of manufacturing lobby group Make UK, called for an “adjustment period,” citing concerns about the impact of the coronavirus.

“Even without the pandemic it would be stretching credibility to believe the companies that export hundreds of billions of pounds worth of goods each year could adapt to a fundamentally different trading model in just one working week,” he said.

All Sizes

The Institute of Directors said government support would help companies adapt.

“Wherever possible, changes should be phased in,” said Director General Jonathan Geldart. “Financial support for SMEs, such as vouchers for professional advice or tax reliefs to help them adjust, would help firms get on the front foot for the new year.”

Mike Cherry, chairman of the Federation of Small Businesses, echoed this plea for aid.

They need “tangible, targeted support, including 3,000 pounds ($4,000) transition vouchers that small firms can spend on the training and advice required to navigate a new trading relationship with our biggest export market,” he said.

Adam Marshall, director general of the British Chambers of Commerce, said an adjustment period should not be difficult to grant “as it is normal for free-trade agreements to come with phasing-in measures, and this one should be no different.”

©2020 Bloomberg L.P.

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