100 Days Until Brexit And The UK Is Nowhere Near Ready

25th September 2020

With 100 days to go until the end of the transition period, Maddy Thimont Jack warns the UK is still far from prepared for the realities of life outside the European Union.

Casual observers would be forgiven for assuming that Brexit is already done. A triumphant Conservative government - off the back of its election-winning "Get Brexit Done" campaign - has been certainly keen to give that impression. The government's communications campaign around the looming December deadline avoids the ‘B word' entirely. The transition period, which the UK entered upon leaving the EU on 31 January 2020, kept the UK in the EU's economic institutions even as it left its political ones, so delaying any real-world changes.

But not for much longer. There are now just 100 days left until the transition period comes to an end. At 11pm on 31 December 2020, deal or no deal, the UK will leave the EU single market and customs union. How British firms operate, and how people live, travel and work in the EU, will all change overnight. Three months ago, the Institute for Government looked at the scale of the task facing the UK. With 100 days to go, we still find large gaps in the preparations.

The Brexit to-do list was always ambitious - and coronavirus has made it harder

The four years since the EU referendum have not given much time to disentangle the UK from the EU economic and legal order and prepare for the new roles and responsibilities that Brexit entailed. Brexit talks were always likely to go down to the wire - but this is not much use to the businesses that have no idea exactly how they will be trading with the UK's biggest trading partner on 1 January 2021, or to people who will have to adapt to new arrangements when holidaying in, or moving to, the EU.

The UK and the EU are currently trying to thrash out the details of what a future trading and security relationship will look like. Sticking points remain - not helped by the UK's bullish attitude towards state aid, a particularly fraught area of contention - and the government's to-do list is long. It still needs to: pass legislation to stop new gaps in domestic law emerging post-transition; develop and test new systems at the GB-EU border; clarify and implement the GB-NI border; and get businesses and individuals ready to deal with vast amounts of new bureaucracy from the end of the year.

In 2019, preparations for Brexit, and in particular for no deal, consumed a huge amount of government time and resources. The transition period has allowed the government to build on those preparations but, unsurprisingly, this has not been easy in the midst of a pandemic. Many officials were redeployed from Brexit preparations to the coronavirus response, and ministerial focus and effort has at times, understandably, switched to dealing with the health crisis. The decision not to extend the transition period has made an already difficult task for government that bit harder.

The EU has also had to cope with the pandemic – but when it comes to Brexit, the scale of task is much larger for the UK. While the EU has to prepare to add the UK to its established list of ‘third countries' from the end of December, the UK has to be prepared to take on whole new functions and policy areas that have been managed at the EU level for decades.

Ongoing uncertainty continues to undermine business preparedness

The GB–EU border and the Northern Ireland protocol are the two biggest concerns for UK businesses. Industry has recently sounded the alarm over whether the IT systems needed to administer new border processes will be ready. And business groups, including representatives of the logistics sector, have also expressed concern about the lack of capacity in the customs sector to support businesses filling in the additional paperwork required to trade with the EU. If trucks don't have the right paperwork they will be unable to leave the UK, and backlogs will start to build almost immediately. The decision to delay physical checks on most goods imported from the EU until next July has bought time to build some of the physical infrastructure needed near the border – but not much.

The government’s recent manoeuvres around the Northern Ireland protocol have added another layer of uncertainty. The EU and businesses had been reassured that the government was starting work to implement what had been agreed in the Withdrawal Agreement last year, and welcomed the announcement of the Trader Support Service to help businesses trading across the GB–NI border. But the government’s inclusion of controversial clauses in the UK Internal Market Bill, which would allow the UK to make unilateral decisions about the application of the protocol, has reopened previously settled questions.

If the UK doesn’t implement the protocol fully, the EU could look to initiate legal proceedings against the UK. Or, if it perceives a threat to the single market, it may revisit the politically sensitive question of whether or not to establish border infrastructure on the island of Ireland. Businesses based in Northern Ireland – or businesses which commonly trade with it – have been left wondering, yet again, what exactly they will be required to do on 1 January 2021.

Even if a deal is agreed, the level of unavoidable disruption means that officials will need to refocus on contingency planning and full-blown preparations. Operation Yellowhammer, the ‘reasonable worst-case scenario’ planning from 2019, has been rebranded and is back at the top of government in-trays. The government has dusted off Operation Brock – its plans to avoid turning Kent into a lorry park – and the Department for Transport will likely need to once again issue ferry contracts to ensure high priority goods, like medicines and perishable food, can get into the country in the event of any build up at the channel crossings. All of this on top of a likely second wave of coronavirus and other winter crises like flu and flooding.

The government needs to be honest with business about what it needs to do

Businesses have been marched up the no deal hill at least three times already, and as the 100 days count down the familiar deal/no deal drama will ramp up at Westminster and in the media.

The government needs to be prepared to work with – and listen to – businesses and business groups. Although policy choices have been made about the future relationship, ministers need to take business concerns seriously and set out a clear plan for how they will be supported – deal or no deal.

In particular, the government should press home the fact that, whatever the outcome of Brexit talks, traders need to be prepared for new friction – paperwork and checks – when trading with the EU next year. It should also make clear that this is not just about ‘goods’: services firms will face difficulties too – it will be much harder for, say, consultants, architects and lawyers to practice in the EU from January 2021. While ministers may not want to confront the reality of their political choices, if businesses are unprepared, the impact in the UK will just be felt more keenly.

With only 100 days left until Brexit is, really, done – the UK is still a long way from being ready. The government needs to act fast to avoid New Year’s Day bringing with it a far larger, and more long-lasting, headache than usual.

This article was published by the Institute for Government web site