Brexit

The spectre of a no-deal Brexit, which has hung over the UK since the vote to leave the EU four and a half years ago, could become reality within a matter of days.Unless Boris Johnson can seal a free trade agreement (FTA) with Brussels before the end of 2020, Britain is due to quit the EU’s single market and customs union at 11pm on 31 December with no bilateral arrangements to smooth commerce with its nearest neighbours.The government’s official forecasters at the Office for Budget Responsibility calculate that a no-deal Brexit would knock around two percentage points off GDP growth in 2021, and the governor of the Bank of England has said that the long-term effect on the UK economy would be worse than the coronavirus pandemic.The prime minister, of course, has been in denial about the threat of no-deal since the formal date of Brexit on 31 January, constantly referring instead to “Australian-style arrangements” as the alternative to an FTA.This euphemism is accurate up to a point, as Australia has no trade deal with the EU.But it overlooks the fact that Canberra regards the arrangement as economically disadvantageous and is actively trying to secure an FTA with Brussels – as well as the fact that it has a number of side-deals covering individual sectors which are not in place for the UK. Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe PM’s close lieutenant Michael Gove had no reply when asked whether the outcome might just as well be described as Mongolian- or Afghan-style.In reality, no-deal Brexit means switching overnight onto World Trade Organisation terms for the UK’s commercial relationship with its largest and closest trading partner.And what that means in practical terms is the imposition of tariffs on a whole range of imports and exports, as well as quotas on some products, increasing the cost of doing business and potentially meaning higher prices in the shops.Under the WTO’s “most favoured nation” rules, countries imposing tariffs on goods – effectively a tax on imports – must apply the same rate to products from anywhere else in the world. A second rule requires that regulations on standards must be the same for domestic and foreign goods.The only exception is for countries in customs unions or free trade areas, which for many years permitted the UK and EU to maintain a zero-tariff zero-quota regime.Without an FTA, imports from the EU will be subject to the schedule of tariffs drawn up by the UK government.Many goods will be zero-rated, but planned tariffs include a 10 per cent charge on imported cars, 12 per cent plus £1.96 a kilo on frozen lamb and as much as £1.85 a kilo for cheese.The charges are designed to protect home-grown producers from being undercut by cheap competition from abroad, but could add £1,500 to the cost of a typical EU-produced hatchback, like a VW Polo, if passed on to the consumer.Meanwhile, the EU would impose its own tariffs on UK goods, making British companies less competitive in a market which accounted for 43 per cent of UK exports in 2019.On top of this would come “non-tariff barriers” to trade, such as product standards rules, safety regulations and sanitary checks on food and animals. Some of them will apply with or without a deal, but exporters fear that the red tape and delay involved will be worse in a no-deal scenario.Advocates of no-deal argue that it would allow the UK to adopt its own standards in areas like workplace rights, animal welfare and environmental protection, potentially cutting red tape and giving British companies a competitive edge.But it is likely that many exporting companies would opt to observe EU standards in order to be able to continue selling products into a market of half a billion customers on Britain’s doorstep.No-deal would also mean an absence of formal ties with the EU in other crucial areas such as judicial and police cooperation, security, mutual recognition of professional qualifications, data exchange and financial market regulation. The only bilateral treaty in place would be Mr Johnson’s 2019 withdrawal agreement, which commits the UK to hand over around £30bn to Brussels and guarantee rights to EU-national residents, as well as drawing a customs border down the Irish Sea, but has nothing to say about future trade or security relations.In general terms, it is feared that a crash-out Brexit would also exact a heavy price in lost goodwill and co-operation, increasing the potential for queues at the borders and disputes over infringements of regulations.But ironically, one of the first consequences of a no-deal Brexit is likely to be a renewed clamour for a deal, as the financial impact becomes clear and UK businesses demand a better trading environment.A no-deal Brexit may give Michel Barnier and David Frost a break from negotiations in the early months of 2021. But it would be rash to bet against them – or their successors – getting back around the table before too long for what are likely to be considerably more urgent efforts to find a new framework for the future. More

After 10 months of negotiations on a free trade agreement, the differences between the UK and EU have boiled down to three key issues.Large chunks of the proposed deal were agreed relatively early after the formal date of Brexit on 31 January, freeing officials to work methodically through the process of getting the agreement into legal text.But on the level playing field, governance and fish, there was no such meeting of minds, with bulletins after each round of talks repeatedly stating that “significant divergence remains”.So what are the issues that have made a trade deal so difficult to finalise?Level-playing field:This is Brussels code for maintaining a common set of rules and standards governing business activities on both sides of the Channel.It is a fundamental principle of the EU single market that member states observe the same rulebook in areas like workplace rights, environmental standards and taxation.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayAnd there are strict limits on so-called “state aid”, or government subsidies to companies or industrial sectors.This prevents one country gaining a competitive advantage for its businesses by allowing them to operate to lower standards which make their products cheaper.Even though the UK will no longer be part of the single market after 31 December, Brussels insists that the zero-tariff zero-quota deal which Boris Johnson is seeking must come with the same disciplines on standards.This is anathema to the prime minister and many other Brexiteers, who see it as one of the principal benefits of leaving the EU that Britain will in future be able to set its own rules.And they bridled even further at demands for a “ratchet” mechanism preventing either side from reducing standards if the other raises them in future, as well as so-called dynamic alignment requiring the UK to follow Brussels rules on state aid forever. UK negotiators have insisted that Britain should benefit from the more relaxed terms offered countries like Canada in its trade deal. But the EU insists that this is not possible because of Britain’s geographical proximity to continental Europe and the deep interconnection of the two economies.Governance:Any deal will inevitably lead to disputes, as one side accuses the other of breaches of its terms.The question is how such disputes are resolved and who has the final say.Last year’s withdrawal agreement set up independent arbitration panels to consider any alleged breaches of the divorce deal, with issues of EU law to be referred to the European Court of Justice. The EU has argued that a similar arrangement should be put in place for trade disputes.Britain has insisted that the ECJ should have no role and argued that any dispute resolution mechanism must respect the autonomy of the EU and UK legal systems.Fishing and fish processing represent together only 0.2 per cent of the UK economy, but the industry has become a totemic issue for Brexiteers, making it very difficult for Mr Johnson to give ground.The issue is all the more sensitive because many fishing ports are precisely the kind of “left-behind” towns  whose economic fortunes were promised a boost from Brexit.Britain’s fishing industry has shrunk dramatically since EU entry in 1973, in part because of quotas which gave foreign vessels access to large parts of the catch in UK waters.EU boats currently catch around £600m worth of fish – more than 60 per cent of the total tonnage – in UK waters each year. The fleets of France, the Netherlands and Denmark each take more fish from British waters than the UK does.Brussels wants to retain fixed quotas over the long term, and has offered options for reviews after five or 10 years.  An offer to return around 15-18 per cent of the value of fish stocks currently caught by EU fleets was rejected by the UK.Britain says it will be an independent coastal state with full control over its own waters after the end of the Brexit transition 31 December and wants annual negotiations on access rights similar to those which Norway has with the EU each year. This is being fiercely resisted by France, whose president Emmanuel Macron fears the fury of fishing communities who face losing some of their most lucrative hunting-grounds. More

Technically the UK has left the European Union. But from the traveller’s point of view, nothing significant has changed during the transition phase. This comes to an end at 11pm GMT (midnight Central European Time) on 31 December 2020.From that moment, the ease with which the British have holidayed, worked and lived in the EU for decades will end. Back at the time of the EU referendum in June 2016, you might have inferred from the Leave campaign that not much would change in terms of our freedom to travel and spend time abroad.Immediately after the vote, Boris Johnson reinforced that impression when he wrote: “British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and settle down.” He also promised “access to the single market”. All of that appears to have been forgotten, and instead the UK government has chosen a tangle of rules and restrictions for travellers.One exception is for Ireland, where relatively little changes. The most significant effects involve the reintroduction of customs controls between the island of Ireland and Great Britain, and some motor-insurance rules.For everywhere else in Europe, these are the most critical changes.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayPassportsIf you have a burgundy passport with “European Union” on the cover, it will continue to be valid as a UK travel document. But it loses all its EU powers. From the start of 2021, European rules on passport validity become much tougher.On the day of travel to the EU (as well as non-members Andorra, Iceland, Liechtenstein, Norway, San Marino, Switzerland and the plucky Vatican City) your passport must pass two tests.1. Does it have six months’ validity remaining?2. Was it issued less than nine years, six months ago?The reason: the UK has traditionally given renewals up to nine months’ extra validity in addition to the normal 10 years.A passport issued on 30 June 2011 could show an expiry date of 30 March 2022, for example.While this was fine when the UK was part of the European Union, British travellers must now meet the strict rules on passport validity for visitors from “third countries”.In particularly, passports issued by non-member countries are regarded as expired once they have been valid for 10 years.While the expiry date printed in the passport remains valid for the UK and other non-EU countries around the world, within the European Union the issue date is equally critical.A passport issued on 30 June 2011 is regarded by the EU as expiring on 30 June 2021. Therefore if the holder attempted to board a plane to the European Union on New Year’s Day 2021, it would be considered to have insufficient validity and the airline would be obliged to turn them away – even though the British passport has almost 15 months to run.Until September 2018, the UK government appeared unaware of the problem. Once the issue was identified, the practice of giving up to nine months’ grace ended abruptly. But tens of millions of passports valid for longer than 10 years are believed to be in circulation.Border formalitiesEU fast-track lanes for passport control will no longer be open to British travellers, although countries that receive a large number of visitors from the UK, such as Spain and Portugal, may make special arrangements.The process is likely to be slower, and with no guarantee of entry.At present, all a border official can do is to check that the travel document is valid, and that it belongs to you.From 1 January 2021, the official is required by EU law to conduct deeper checks. They may ask for the purpose of the visit, where you plan to travel and stay, how long you intend to remain in the EU, how you propose to fund your stay and whether you constitute a threat to public health.Length of stayFrom 1 January 2021, the EU’s long-standing “90/180 rule” takes effect for British travellers, as the UK chooses to become a third country.For holidaymakers and business travellers who normally stay a long time in Europe, it has significant effects. You may stay only 90 days (about three months) in any 180 (six months) in the Schengen area – comprising almost all the EU countries except Bulgaria, Croatia, Cyprus and Romania. (Ireland is also non-Schengen, but is part of the Common Travel Area with freedom of movement to and from the UK and smaller islands.)Example: if you spend January, February and March in the Schengen Area – totalling 90 days – you must leave the zone before 1 April and cannot return until 30 June.You will then be able to spend the summer in Europe until 27 September, when you must leave again. You may not come back until Boxing Day.Any time spent in the Schengen Area up to the end of 2020 does not count. So if you spend December in Spain, the clock does not start ticking until New Year’s Day.The UK government says: “Different rules will apply to Bulgaria, Croatia, Cyprus and Romania. If you visit these countries, visits to other EU countries will not count towards the 90-day total.”British citizens can stay as long as they like in the Republic of Ireland.People who have a work or residential visa for a specific EU country will be treated differently.What happens if I overstay?In general travellers are given three days’ grace. Any longer than that and they are likely to be handed an entry ban for one year. This applies throughout the Schengen Area – not just the country in which you overstayed.Can’t I just nip across a border and ‘re-set the clock’?No. The 90/180 rule applies to the entire Schengen Zone. If you leave the zone (for example by returning to the UK or crossing from Slovenia into Croatia) that exit will be recorded on the central database.When you return, the frontier officials will check to see how much of your allowance has been used and remains.VisasInitially British travellers will not need to apply in advance for permission to enter the EU. But from 2022 (or possibly later) British visitors will need to register online and pay in advance for an “Etias“ permit under the European Travel Information and Authorisation System. This is a relatively light-touch visa, akin to the Esta used by the US.Brexit briefing: How long until the end of the transition period?Returning to the UKPreviously there were no limits on the value of goods you could bring in from European Union nations. From the start of 2021, the European Union will be treated the same as the rest of the world – which means that there are now restrictions.For alcohol, the limits are generous:  4 litres of spirits or 9 litres of sparkling wine, 18 litres of still wine and 16 litres of beer, which hopefully will see you through at least an evening.Arrivals to the UK will also qualify to bring in 200 duty-free cigarettes. “Anything that increases the availability of tobacco is a negative step for public health,” the British Medical Association says.If you exceed any of these limits, you will pay tax on the whole lot.There is a limit of €430 – roughly £400 – for all other goods, from Camembert to clothing.Health careFor more than 40 years, British travellers have benefited from free or very low-cost medical treatment in the EU and its predecessor organisations. The European Health Insurance Card (Ehic) and the document it replaced, the E111, have proved extremely valuable for many elderly travellers, and/or people with pre-existing medical conditions.Since the EU referendum, the government has repeatedly said that it hopes to establish a reciprocal health treaty mirroring the European Health Insurance Card (Ehic).The Independent understands that negotiations are continuing on health care, 232 weeks after the vote to leave the European Union.If an agreement is not reached, the government may pursue options such as bilateral arrangements between the UK and individual countries. On 9 December 2020,  when asked about  free medical treatment in the EU in the event of a no-deal Brexit. Michael Gove promised: “For a period, yes, there will be appropriate access.”One certainty is that travellers who are abroad at the turn of the year will continue to be covered: if you enter an EU country by 31 December 2020, your Ehic will remain valid until you leave that country.The Association of British Insurers warns: “Claims costs within Europe are currently reduced due to the presence of the Ehic, which covers some or all state-provided medical costs.“In the absence of the Ehic or similar reciprocal health agreement, insurers will inevitably see an increase in claims costs – this could have a direct impact on the prices charged to consumers.”EU nationals in the UK will be able to apply for a British Ehic card, as will UK students studying in the European Union – and some British pensioners who live in the EU, plus their families.Driving licencesYour licence carries the EU symbol. As with passports, it will lose its European powers, but will still be valid as a UK document from 2021 until its expiry date.The government says: “You may need extra documents from 1 January 2021. You might need an international driving permit (IDP) to drive in some countries.” In fact, you may need two. A 1949 IDP (valid one year) is required for Spain, Cyprus and Malta, while the 1968 version (valid three years) is valid everywhere else in the EU.The IDP is an antiquated document available at larger post offices. Take your driving licence plus a passport photo and £5.50 for each permit that you need.Motor insuranceUnder the European Union 2009 motor insurance directive, any vehicle legally insured in one EU country can be driven between other European nations on the same policy.From 1 January you will need a “Green Card” – an official, multilingual translation of your car insurance that demonstrate you meet the minimum cover requirements for the country you’re visiting.Insurers will generally provide them free of charge, but require around two weeks’ notice.FlightsAt present, there is no legal agreement for any flights between the UK and the European Union from 1 January 2021.The transport secretary, Grant Shapps, says: “The government’s priority is to ensure that flights can continue to operate safely, securely and punctually between the UK/EU at the end of transition period, regardless of the outcome of negotiations.“Air travel is vital for both the UK and the EU in connecting people and facilitating trade and tourism, and we are confident measures will be in place to allow for continued air connectivity beyond the end of 2020.”Some UK airport disruption caused by tough new passport rules may occur in the first few days if significant numbers of British travellers are denied boarding.Ferries/EurotunnelShips will continue to sail and trains will continue to run, but the National Audit Office (NAO) warns that motorists taking their cars to France on ferries from Dover or Eurotunnel from Folkestone face waits of up to two hours once the Brexit transition ends – and that queues could be “much longer” in summer.EurostarPassenger trains linking London St Pancras with Paris, Brussels and Amsterdam will continue to run – but because of travel restrictions applied in response to the coronavirus pandemic, services are currently extremely limited.Mobile phonesFrom 1 January 2021, the EU-wide ban on roaming charges for phone calls and internet use no longer applies to people with UK mobile phones. Providers will be free to impose whatever fees they wish.But all the big providers have told The Independent they do not intend to bring back roaming charges.O2 says: “We’re committed to providing our customers with great connectivity and value when they travel outside the UK. We currently have no plans to change our roaming services across Europe, maintaining our ‘Roam Like At Home’ arrangements.”3 says: “We’ll give you free EU roaming just the same.”EE says: “Our customers enjoy inclusive roaming in Europe and beyond, and we don’t have any plans to change this based on the Brexit outcome. So our customers going on holiday and travelling in the EU will continue to enjoy inclusive roaming.”Vodafone says: “We have no plans to reintroduce roaming charges after Brexit.”Should these or other providers introduce roaming charges, the government says it will cap the maximum for mobile data usage while abroad at £49 per month unless the user positively agrees to pay more.PetsFor many years British travellers have been able to take a cat, a dog or even a ferret abroad with minimal formalities. The government says it is “working with the European Commission to ensure a similar arrangement for pet travel between Great Britain and the EU from 1 January 2021.“However, if an agreement is not reached there could be new requirements in place for those travelling with a pet from Great Britain to the EU from 1 January 2021.”The hope is that the UK will become a “Part 1 listed country” under the Pet Travel Scheme. This would be the least bad option compared with what we have now.But the issue is still not settled, so for now pet owners have to assume the worst-case scenario: that the UK will be “unlisted”. In that case, your pet must have a blood sample taken at least 30 days after its primary rabies vaccination. That sample will be sent to an EU-approved blood testing laboratory.Then, you must “wait three months from the date the successful blood sample was taken before you can travel,” according to the government.So if you start the process on 1 January 2021, you should be able to take a pet abroad from 1 May 2021.One thing we do know: coming home will be no different. “There will be no change to the current health preparations for pets entering Great Britain from the EU from 1 January 2021,” says the government. More

On 31 December the post-Brexit transition period ends and, with or without a free trade deal with the European Union, the UK will start life outside the EU’s single market and customs union.That will, pretty much all economists tell us, have a substantial economic impact on our lives.  But what exactly will those impacts be – and how will ordinary people experience them?
Below we describe how the two varieties of Brexit are likely to impact peoples’ wages, benefits and taxes.There are various ways of modelling the economic impact of the UK leaving the EU.  One is to analyse the likely overall economic impact on the UK economy of higher trade barriers with the EU, the bloc with which we currently do around half of our trade.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayVirtually every macroeconomic trade model shows that leaving the EU with a free trade deal would hold back the UK economy’s growth relative to staying in the bloc. The Office for Budget Responsibility, the Treasury’s own independent forecaster, this week estimated it would impede UK GDP growth over the next 15 or so years by around 4 per cent relative to where it otherwise would have been.  This picture would be roughly the same if we successfully concluded ambitious trade deals with the likes of countries such as the US, Australia and New Zealand.  The Government’s own economic modelling team estimates all these deals combined would add a maximum of 0.2 per cent of GDP in the long run.This 4 per cent of GDP loss accounts for £80bn in today’s money, or around £3,000 for each of the UK’s 28 million households. This could be experienced in the form of lower wages, lower benefits and higher taxes than otherwise would have accrued to households.  £3,000A rough indication of the size of the economic pain that would be borne by the average household from leaving the EU with a Brexit dealIt’s impossible to say exactly how much individual households would suffer financially, because this will depend on which sectors of the economy members of a household work in and the decisions of future politicians about redistribution through benefits and taxes. But this £3,000 figure gives a rough indication of the size of the economic pain that would be borne by the average householdAnother way to model Brexit is to examine different sectors such as agriculture, finance, fishing, manufacturing and so on. These exercises show that some sectors, specifically those that do a great deal more in trade with the Continent than others, would face more damage.  Modelling suggests clothing, chemicals, pharmaceuticals, motor manufacturing, agriculture and financial services would be hit the most.  This implies that workers in those industries would likely face a more severe economic hit. But firms in sectors that don’t trade much with Europe, such as construction, might well be relatively unaffected. However, it’s important to stress that such sectors could also be negatively impacted by future restrictions on EU migration, which would have implications for the wages of those who currently work in them.Leaving the EU without a trade deal on 31 December would, according to the UK’s independent Office for Budget Responsibility (OBR), hold back UK GDP growth by around 2 per cent in 2021, or £40bn.  That translates into a loss of £1,500 per UK household. And over 15 years the OBR estimates, based on the modelling done by a host of independent researchers, that the damage would hit 6 per cent of GDP, or around £120bn, or around £4,000 per household.
Again, it’s impossible to say precisely which households would suffer because this would depend on which sectors people work in and the decisions of future politicians about benefits and taxes.  Yet this is a rough indication of the size of the economic pain that would be borne – in some way – by the average UK household.
The impact of a no-deal Brexit on particular sectors would be even more unequally felt than leaving the EU with a free trade deal.  Many exporting firms would face EU tariffs, which would make those exports less competitive and likely reduce demand for them, blowing a hole in the incomes of people working in these sectors.The impact on the automotive sector would be especially severe because all cars exported to the EU ( the destination of half of UK-manufactured cars), would be hit by a 10 per cent tariff.The OBR thinks unemployment would rise by around 300,000 next year, relative to otherwise, if we left the EU without a free trade deal. It’s likely that these lost jobs would be concentrated in those sectors which are heavily reliant on EU trade. Researchers at the Institute for Fiscal Studies calculate that lower-skilled workers more likely to be hit economically by a no-deal Brexit.“These tend to be older men with skills specific to their occupation who, history suggests, may struggle to find equally well-paid work if their current employment were to disappear,” they note. More

For most Britons, the impact of the UK’s transition to Brexit will first be noticed when they go to the supermarket to stock up on food and drink after the festive break.With or without a deal, departure from the EU’s single market and customs union is likely to mean stores having to raise prices and may leave them with gaps on the shelves as supplies of certain foods run short.The UK imports around 45 per cent of its food, with 26 per cent coming from the EU and the remainder from the rest of the world. European imports come mainly from the Netherlands (14 per cent of the total value of EU goods), Germany (11 per cent), Ireland (10 per cent) and France (10 per cent).That makes Britain vulnerable to the disruption in the flow of traffic from the continent which the government admits is likely due to the additional red tape resulting from Brexit, including more than 200 million extra customs declarations annually.If no free trade agreement is secured and ratified by 31 December, tariffs averaging 18 per cent will be imposed on food and drink imported from the continent, with retailers likely to pass some if not all of this additional cost onto consumers. An 18 per cent hike on products making up around a quarter of the typical shopping basket would push the UK’s average £45-a-head weekly spend on food and drink up by around £2.At the same time, no-deal would mean additional costs averaging 23 per cent on sales to the EU, making UK food and drink exporters less competitive and eating into their profits.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe Food and Drink Federation’s head of international trade Dominic Goudie described a no-deal outcome as “catastrophic” for UK supply chains, and said it was “highly likely” that any additional financial burdens would have to be passed on to consumers.But even if Boris Johnson gets a deal with Brussels, there will still be a big financial burden on importers and exporters from extra red tape, including customs declarations, health certification and rules of origin checks. If passed on to customers, this alone could push prices up by 3 per cent.Any rise in food prices will hit the poorest hardest, as food purchases make up the largest proportion of their spending.And with or without a deal, delays are expected at key ports like Dover and Folkestone, with the government’s own worst-case planning scenario suggesting traffic across the straits could be reduced to 60-80 per cent of normal levels, with waits of as much as two days.UK authorities have deferred the full implementation of new paperwork to July, and can be expected to wave food deliveries through where possible. So initially at least, queues of lorries are more likely to be seen on the Kent side of the Channel than in France.However, any delays will put consignments of perishable goods like seafood and salads at risk. And there are fears that a proportion of EU-based hauliers will be discouraged by the additional friction from making the trip to the UK at all, cutting the total amount of produce arriving from Europe.While no one expects an overall food shortage, it is possible that particular products will be harder to find. Britain relies on European trade for most of its onions, mushrooms, tomatoes and salad, and for a critical portion of many other vegetables and fruits. Meanwhile, failure to resolve issues relating to organic produce could mean UK suppliers being frozen out of the EU and Northern Ireland markets.Mr Goudie said that delays are “inevitable” and warned that stockpiles of produce in the UK are currently low as a result of the coronavirus outbreak.“While our industry has demonstrated remarkable resilience during the Covid-19 pandemic, many businesses have used up stockpiles that had been built for a no-deal Brexit to cope with increased demand,” he said. “Staff have also been redeployed to respond to the Covid-19 crisis and as a result many businesses have fewer available resources to dedicate to preparing for the end of the transition period.“While we are working closely with the UK government to highlight the issues at stake for food and drink, we are deeply concerned that even a thin Brexit deal will mean impossible deadlines for UK manufacturers that depend on highly integrated UK-EU just-in-time supply chains.”The FDF is calling for an amnesty period following the formal transition to post-Brexit arrangements on 31 December, to allow companies time to make changes in areas like food labelling and new border requirements. “Failure to do this will undermine choice and value for UK shoppers,” said Mr Goudie.“We anticipate impacts on product availability and on prices but it is hard to predict what that will look like as the added trade friction is likely to lead to a mixture of over and under-supply which will be equally damaging for manufacturers.”Uncertainty is greatest in Northern Ireland, with goods traveling from the British mainland subject to new customs and health checks on arrival.Under the terms of the Northern Ireland Protocol signed by Mr Johnson in 2019, these measures are required for any goods which could enter the EU by crossing the border into the Republic.The UK government has claimed the EU could use the protocol to impose an effective blockade on food supplies to the North, and has threatened to breach international law to prevent this happening. 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Officials on both sides of Brexit trade negotiations complain that there’s been little progress in recent weeks, despite a pledge to intensify talks.Here are the issues that are plaguing negotiations and preventing a deal:GovernanceThis issue is a question of how any deal that is signed would be enforced. Negotiators were mentioning it as an issue from the very beginning, with an EU insistence for a role for the European Court of Justice being an obvious problem for the British side.While it briefly looked like both sides might be coming to some accommodation on this question, it’s reared its head again after Boris Johnson’s decision to try and overwrite last year’s withdrawal agreement. Now it is Brussels and its member states that are seeking a cast-iron mechanism for enforcing the agreement, in case the UK decides to try and break international law again.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe question of fishing is as politically charged as it is difficult. The UK is widely regarded to have been given a raw deal under the EU common fisheries policy, and Brexiteers want any new settlement to rectify this.What’s so difficult here is that the technical terms like “relative stability” and “total allowance catch” are really a smokescreen for one question: who gets more fish and who gets less.If British fishermen get more, that means other countries like France get fewer. That means fish that are currently providing a livelihood for coastal communities are no longer available. Emmanuel Macron in particular has said he cannot sell-out French fishermen.One thing to watch here is that while no deal overall is most damaging for the British, on fishing it is the French and other countries’s fishermen who would be locked out of some waters.The level playing fieldThe EU’s argument for a level playing field is: you want us to open our markets to your businesses. For that to happen, you need to guarantee that you’ll stick to high standards and relations we have, otherwise you’re just going to undercut our producers and damage our economy. And why would we do that to ourselves?While distance on this issue is sometimes overstated – it’s a question of degrees dividing them, rather than principle – both sides have become genuinely stuck on the question of state aid rules, which the UK has traditionally been very in favour of.Yet, the UK now wants to keep its options open and doesn’t want to be bound by such restrictions. There was some sign of movement on this issue ahead of October’s European Council summit, but things have gone quiet since then. More

Boris Johnson.jpgBoris Johnson has said it is “very, very likely” that the UK will fail to strike a trade agreement with the European Union, raising the prospect of a no-deal Brexit at the end of this month.Mr Johnson told reporters on a visit to Blyth in Northumberland that the government was “always hopeful” and that “we’ve got our teams still out there in Brussels”.“But I’ve got to tell that from where I stand now, here in Blyth, it is looking very, very likely that we will have to go for a solution that I think would be wonderful for the UK … and come out on World Trade terms [with no deal].” It comes as EU Commission president Ursula von der Leyen briefed EU leaders on Friday that a no-deal Brexit was the most likely outcome of negotiations, reportedly saying there was a “higher probability for no deal than [a] deal” following an all-night summit in Brussels.An EU official has also confirmed that the prime minister’s attempt to have a three-way call between himself, French president Emmanuel Macron and German chancellor Angela Merkel was rejected by Brussels – after he said on Thursday night he was willing to “go to Brussels, go to Paris, go to Berlin, I will go to wherever to try and get this home and get a deal”.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayShow latest update
1607698215‘Very important’ UK gets deal, Arlene Foster saysNorthern Ireland’s first minister minister, Arlene Foster, has said she “really hopes” a no-deal Brexit will not be the outcome of ongoing negotiations.  “I hope that is not the case, I really do hope that the negotiators on both sides are able to come to a deal for us here in Northern Ireland,” she said.“It’s very important indeed for the whole of the UK to get a deal. I know that some people think that they could deal with an Australian type of Brexit. But really, for us, it would be very good if we had a free trade agreement.”Asked about the remaining uncertainties over the operation of the Northern Ireland Protocol, Ms Foster said: “Obviously we voted against the Protocol, it’s not something that we wanted to have there. But we’ve been working very hard to try and change some of the worst excesses of it and to try to mitigate against some of the issues that have been there.“We’ve seen some progress there. But, of course, it’s a work in progress and there’s still a lot of clarity that needs to come off the back of the Protocol. Of course, if there’s a free trade agreement that helps with all of that.”Sam Hancock11 December 2020 14:501607697135MPs’ salaries to be frozen amid Covid crisis, watchdog confirms In some non Brexit-related news, plans to give MPs a 4.1 per cent pay rise have been dropped after a public outcry.Salaries will instead be frozen, an independent watchdog has announced – to “reflect the reality” their constituents are facing, amid the Covid pandemic.Such a rise “would result in a salary increase for MPs that would be inconsistent with the wider economic data and would not reflect the reality that many constituents are facing this year,” it said.Our deputy political editor, Rob Merrick, has more Sam Hancock11 December 2020 14:321607696737Johnson tells reporter ‘oven-ready deal’ already achievedIn an awkward encounter, in which a reporter showed Boris Johnson a recording of himself talking about an “oven-ready deal”, the PM accused ITV of “muddling up two things”.The reporter, for one ITV’s local Tynetee station in northeast England, told Mr Johnson: “That’s you last year and when you were asked about a trade deal then, you said: ‘Don’t worry, we’ve got an oven-ready deal. It’s good to go.’”Before the journalist could finish, Mr Johnson tired to intercept and cut the journalist short, but he continued: “And on the back of that, if I may, you got lots of votes and lots of extra seats…”The PM did then interrupt, to say: “If I may, with respect, you’re muddling up two things.”The journalist then hit back: “I don’t think I am. You were asked about a trade deal then and you chose to respond by saying you had an oven-ready deal. You haven’t got a deal, have you? Will you apologise to the people that voted for you?”The PM defended himself, saying his “oven-ready deal” was “clearly” referring to the deal that saw the UK leave the EU on 31 January 2020, not the negotiations that have been ongoing ever since.Watch the clip below to see the rest:Sam Hancock11 December 2020 14:251607696113UK customs not ready for end of post-Brexit transition, committee warnsBritain’s customs system is not ready for the end of the post-Brexit transition, the chair of the EU goods sub-committee has told Michael Gove in a 21-page letter today.Barrenness Sandip Verma told the Cabinet minister the committee is “not confident that all the necessary technological, physical and welfare arrangements will be in place in time to avoid or mitigate significant disruption following the end of the transition period”.She said: “Key customs IT systems, some of them going live at the end of this month, are still in development and testing. Similarly, construction of port and inland customs facilities is still ongoing and, in some locations, yet to begin.“The degree to which those involved in UK-EU trade are aware of what they need to do differently is a critical unknown element and the plans to protect the welfare of drivers stuck in what could be extremely long queues are insufficient. Amid this widespread uncertainty, the guidance provided by the government has been complicated and unclear, and we cannot assess how well targeted it has been.”She added: “The committee is seriously concerned that the government is so far behind in its preparations.”Sam Hancock11 December 2020 14:151607695252What is Boris Johnson up to?Meanwhile, at the National Renewable Energy Centre in Blyth, Northumberland:  More

Boris Johnson and Ursula von der Leyen pictured on Wednesday night in BrusselsDowning Street has refused to confirm whether it will agree to the EU’s newly unveiled no deal contingency plans, which were published earlier today, but has said it will “look closely” at the proposals. Boris Johnson’s spokesman did, however, signal that the prime minister would not accept the fisheries proposal put forward by the European Commission. When asked if the UK would agree to the measures – which involve the EU continuing to have access to UK waters – he told reporters the PM would not “accept arrangements … which are incompatible with our status as an independent coastal state”. “I think as we’ve said throughout the negotiations, once we leave the end of the transition period, we will take back control of our waters,” the spokesman said.It comes after the EU announced new measures today in the event that a trade agreement is not reached by the end of the weekend, and a no-deal Brexit becomes more likely than ever. Ursula von der Leyen, EU Commission president, unveiled the plans via her Twitter account, explaining negotiations were “still ongoing” but that “the end of the transition is near”.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayShow latest update
1607612029The last supper: A look at history’s most important political mealsBoris Johnson’s three-course meal with EU Commission boss, Ursula von der Leyen, last night could amount to a historic “last supper” – the final, fateful moment it became clear a Brexit trade deal was destined to die.The pair tucked into pumpkin soup with scallops, then steamed turbot and mashed potatoes, followed by pavlova with exotic fruit for pudding. The fish starter and fish main course were painfully ironic – since neither side have been able to digest the other’s demands on fishing rights.  But they left no room for compromise, with both sides sounding extremely downbeat on the chances of an agreement afterwards.Naturally, my colleague, Adam Forrest, has rounded up some of the most significant meals in political history:Sam Hancock10 December 2020 14:531607611619PM’s audience with Queen postponed due to trade talksBoris Johnson’s audience with the Queen was postponed this week to allow the prime minister to focus on the post-Brexit trade deal talks, as he tries desperately to get a trade deal through before Sunday.While Mr Johnson usually telephones the monarch every Wednesday evening to update her on Government matters, there was no record of the audience in the Court Circular this week. Buckingham Palace confirmed the Queen would speak with the PM next week, with a Palace spokesman telling the PA news agency: “The audience was postponed due to the prime minister’s busy diary. One is planned for next week.”Sam Hancock10 December 2020 14:461607610927Fishing disputes could be the deal breaker, source saysThe UK could never accept arrangements on fishing with the European Union which do not fit with its status as an independent coastal state, Sky News reported a British source as saying in response to EU no-deal Brexit contingency plans.“We would never accept arrangements and access to UK fishing waters and which are incompatible with our future status as an independent coastal state,” the unnamed government source said, Sky reported.Earlier, the European Commission proposed that Britain and the EU continue to offer reciprocal access to their fishing waters for up to a year, potentially easing tension around one of the most emotive sticking points in the trade negotiations.Read more about the EU’s contigency plans here:Zoe Tidman10 December 2020 14:351607610147CBI boss says Brexit ‘progress relies on political leadership’Back in the UK, the Confederation of British Industry’s deputy director-general has urged both sides to put people’s “jobs and livelihoods above politics”.“Shifting deadlines are already costing companies,” Josh Hardie said. “So getting a deal is vital to protect businesses, jobs and living standards across Europe already under strain from the pandemic.”He added: “Progress relies on political leadership, which is needed now more than ever to avoid a costly, damaging and divisive no-deal scenario.”Additional reporting by PAZoe Tidman10 December 2020 14:221607609637EU summit: Images show leaders arrivingOver in Brussels today, EU leaders are gathering for a summit – but they are not expected to devote lots of time to Brexit. “We will not have a long debate on Brexit,” summit chair Charles Michel said, adding he expected the European Commission to update leaders on the status of talks towards a new trade deal.Here’s some pictures from the summit so far: More