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Certainty on Brexit is needed for both the retail and logistics industry: BRC and FTA

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Continued uncertainty around Brexit is hitting the retail and logistics industries: BRC and FTA

The retail industry is united in opposing a no deal Brexit and Parliament must act to ensure that doesn’t happen.

 

That’s the message from the British Retail Consortium (BRC), responding to Prime Minister Theresa May’s speech in Parliament yesterday, in which she said the government would drop plans to charge EU citizens £65 each, for adults, to establish their settled status in the UK, but refused to rule out a no deal Brexit.

 

BRC chief executive Helen Dickinson said: “For all the Parliamentary games over the last couple of months, we appear to be little closer to a solution ready to be implemented before March 30, that ensures frictionless, tariff-free trading with the EU. And while Parliament remains fractured, the retail industry is united in saying that a no deal Brexit would be disastrous for both business and the public. If we want to avoid higher prices and less choice on the shelves, then Parliament must take steps to ensure we avoid a no deal scenario at all costs.

 

“While we welcome the Prime Minister’s offer of engaging with business groups, the first priority must be to ensure we have an agreement that can get us to a transition period.”

 

Today animal care retailer Pets at Home, ranked Top100 in IRUK Top500 research, said that as it approaches the end of its financial year, it would consider spending up to £8m to build up its holdings of stock, in the light of the Brexit process.


At the same time, the FTA, speaking for the logistics industry, said that there was still no certainty on future immigration in the event of a no deal - and that was unacceptable.

 

Sally Gilson, head of skills at the FTA, said: “European workers are a key supporter of the UK’s complex supply chain, undertaking vital roles in all areas of moving goods and services across the country to support manufacturers, retailers, schools, and individuals,” says Sally Gilson, FTA’s head of skills. “The news that the Settled Status Scheme is finally open to selected applicants is encouraging, but too little too late – three million people cannot be processed in eight weeks and there is no system for employers to check right to work.

 

“In addition, businesses still cannot make plans for their workforce after March, with the Future Immigration White Paper still to be ratified. This is unacceptable after two years in which government could have clarified the situation to ensure consistency in the supply chain – which, after all, underpins every facet of daily life. It seems ludicrous that government has itself confirmed that businesses cannot check EU workers’ right to work until a suitable system is in place – so how and when is this to be possible?”

 

The effect of Brexit on consumer spending is already starting to be felt. City Index senior market analyst Fiona Cincotta has said uncertainty around Brexit played its part in subduing sales over the Christmas period, as did the Black Friday discounting period. “Let’s not forget Brexit,” she said, commenting on a 0.9% month-on-month fall in retail sales in December, as reported by the ONS at the end of last week. “Economic uncertainty has also contributed to the worst key Christmas shopping period for retailers since the financial crisis. It doesn’t take a genius to realise all is not well in the UK economy. Consumer confidence is low and debt levels high by the end of the year. Hardly the ideal environment for parting with cash.”

 

Planning in case of no-deal

The latest HMRC updates on the EU Exit remind retailers of three actions to be taken in case of a no deal exit. The first is to register as a UK economic operator, and to get an EORI number to prove that status. The link to do that is here.

 

The other two actions it recommends are to decide whether to employ an agent or to use software to handle customs declarations, and to speak to fulfillment partners about whether they can make safety and security declarations on the retailer’s behalf, or whether traders will need to do that for themselves.

 

In the latest letter, dated January 17, HMRC said: "The UK will be leaving the EU on 29 M‌ar‌c‌h 2019. Leaving the EU with a deal remains the Government’s top priority, however the government and businesses should continue to plan for every possible outcome including no deal."

 

 

Image: Fotolia

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