Brexit Update 28 September 2020 by Camilla Call, Brexit Advisor
The past week has resulted in much news to report including progress on the Agriculture Bill, which received passionate support from campaigners, organisations and the public earlier in the year. The British Chambers of Commerce shared their evaluation of guidance available for businesses to prepare for the end of the transition period, a worthwhile read for any business. Insight was also made available from a survey on the British public’s view on our future relationship with the EU, which made for an interesting read. Round nine of UK-EU negotiations formally start today, 28 September, so we expect next week’s update to be as full of news.
On 22 September the House of Lords voted by a majority of 307 to 212 to add amendment 93 to the Agriculture Bill, the “Requirement for agricultural and food imports to meet domestic standards” (parliament.uk see section 93). This would mean any agricultural or food product imported into the UK would need to meet or exceed domestic standards, therefore protecting UK farmers from being undercut by low standard imports, for example chlorinated chicken. While this was rightly celebrated by many organisations, the bill will now return to the House of Commons where MPs will again debate this and decide whether to agree with such amendments.
Reuters provided an update on the negotiations on 23 September, saying that while the EU could take legal action on the Internal Market Bill’s breach of international law, which could take years, Brussels wants the negotiations to continue; Michel Barnier says he is “determined” about reaching a deal. However, the Internal Market Bill will take most of October and November to discuss in parliament therefore will not be passed before the EU’s deadline of end of September to withdraw it or Boris Johnson’s deadline of 15 October to agree a deal. A senior EU diplomat commented “My understanding is that a decision on possible EU legal action won’t be taken until early October”.
BBC reported on 23 September that drivers of lorries over 7.5t will need a permit to enter Kent from 1 January 2021. Michael Gove warned of the reasonable worst-case scenario which could see up to 7,000 vehicles blocking the roads around the port of Dover and the Channel Tunnel due to drivers arriving without permits.
CityAM shared on 23 September that JP Morgan is reportedly set to move €200bn (£184bn) assets from the UK to Germany by the end of the year as a result of Brexit. Banks have been moving parts of their operations to Europe to ensure they’re able to continue to operate if the UK does not retain passporting rights and this would be the biggest shift any lender has made to Frankfurt. Around 200 staff were told to move from London to European cities including Frankfurt, Paris, Milan and Madrid.
On 24 September the British Chambers of Commerce (BCC) published their evaluation of the quality of official guidance on exiting the EU and whether it provides sufficiently clear, complete, visible, timely and actionable information which businesses can use to prepare for change. You can find this here along with the 35 questions most frequently raised by companies and their RAG status. It is recommended that businesses read this document as it contains information and links on guidance marked as green. Where guidance is marked as amber and red there’s information on what’s to be expected and it can help to avoid searching for guidance that doesn’t exist or is currently incomplete.
Research by the BCC found that just 38% of firms had completed a Brexit risk assessment this year, compared to 57% in 2019 and 35% in 2018. It also found that more than half (51%) of firms surveyed had not taken any of the eight steps recommended by the government to prepare for changes in the movement of goods between the UK and the EU. This includes fundamentals of operation for trading businesses such as checking on the need for customs declarations and assessing the possible impact of changes on existing customers and suppliers. BBC published on 24 September seven things that will change in January and others that remain unresolved. Things that directly affect travellers include passport rules, international driving permits, health insurance, visa requirements for travel in Schengen area countries over a set threshold and using different queues at airports. Other changes include the new points-based immigration system and trade within, and outside, the UK.
The Guardian reported on 26 September how the lack of physical evidence of settled status for EU migrants could cause issues with accessing jobs, banking and healthcare. While other foreign nationals are provided with biometric permits proving their residency, the move from paper to digital copies via the EU Settlement Scheme means EU citizens will need to access the Home Office online database each time they need to prove this, which is at risk of outages and requires smartphones and several logins and authentications. A survey published by the support group the3million found only 14% of companies questioned were clear on the new rules for employing EU citizens after free movement ends in December, while one in five would more readily accept a biometric permit as evidence of status over a digital check. It is recommended that businesses familiarise themselves with the new requirements.
BBC provided an update on the UK-EU negotiations on 28 September, reporting that an EU diplomat said “On technical issues we’re 90% there… that remaining 10% is political. And if that can’t be solved, then the 90% is irrelevant. There will be no deal.” The ongoing sticking points remain, including state aid or the ‘level playing field’, but there is talk of compromise on this which would involve big concessions from the EU. This could be that instead of the UK signing up to common regulations on labour, the environment, state aid, etc., the EU would ask the UK to sign up to common principles and also to a dispute settlement mechanism; if competition rules were broken, legal action could then be taken.
On 28 September Ipsos MORI published insight into the British public’s view on our future relationship with the EU. 1,068 British adults aged 16-75 were sampled and regardless of whether individuals voted to leave or remain, the results indicate that British adults acknowledge the importance of retaining a close relationship with the EU, but felt more pessimistic about this happening compared to six months ago. When looking deeper into the results, however, there are different views on sentiments between leave and remain voters and Conservatives and Labour. For example, more Conservative and Leave voters think Britain’s influence around the world will increase, at 39% and 40% respectively, whereas more Labour and Remain voters think it will reduce, at 65% and 68% respectively. 65% of leave voters felt Britain was a force of good in the world compared to 45% of remain voters. When asked about the top priorities for Britain’s relationship with the EU, the top spot for leave voters was ‘working with the EU to reduce illegal immigration into Britain’ at 43%; only 11% of remain voters felt this was the most important and it did not feature in their top 5.