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Warnings on no-deal Brexit as incoming Prime Minister Boris Johnson prepares for office

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Even as Boris Johnson was today named the new leader of the Conservative party, set to take over as UK Prime Minister tomorrow, the retail and logistics industry had already put forward its advice on the importance of avoiding a no deal Brexit.

Tackling Brexit will be the top priority both for Johnson and incoming Liberal Democrat leader Jo Swinson in the coming weeks and months – and retailers will be watching with keen interest to see what happens. Johnson has previously said that the UK will leave the EU on October 31 come what may. 

This morning, after the announcement that he had won the Conservative Party leadership election, he said: “We know we can do it and the people of this country are trusting in us to do it, and we will do it,” repeating the ‘deliver Brexit, unite the country and defeat Jeremy Corbyn’ mantra of his campaign, to which he added an ‘e’ for energise to make what he dubbed a ‘Dude’ strategy. Invoking a new “can do” spirit he said: “We’re going to get Brexit done on October 31.”

The effects of no deal on retail

But his comments came as the retail industry put their emphasis on the urgent need to avoid no deal. This morning IRUK Top150 retailer Joules said in full-year results that the ongoing potential Brexit added “complexity and uncertainty among many areas of the group’s operations,” and that a no-deal Brexit would be likely to make that worse. Extra customs procedures resulting from a no-deal “may result in delays to both inbound and outbound movements of goods, particularly if the UK withdraws from the EU with no free trade agreement,” it said. “This could adversely affect our supply chain and our ability to supply our wholesale customer base.”

Online retailer, meanwhile, said its sales had more than doubled from July last year, highlighting the effect that Brexit is having on Christmas already as consumers buy up their Christmas trees ahead of the Brexit deadline of October 31. 

The retailer says it has futureproofed its business by stockpiling Christmas 2019 stock in its warehouse.  Owner Stephen Evans said: “Knowing the uncertainty in the retail climate due to Brexit looming, we have decided to futureproof ourselves for 2019, and have already secured stock in our warehouse for the year in preparation for the Brexit deadline of 31 October.

“Ordering the stock so early in the year has given us the security of having it in our warehouse and ready to go. We’re pleased with how this futureproofing is already paying off – it is both preventing any logistical headaches for our team, whilst giving customers the peace of mind that they will have their Christmas tree well in time for Christmas.”

Industry bodies oppose no deal

Retail bodies are similarly clear in their demands for clarity. In advice to the incoming Prime Minister the FTA (Freight Transport Association) says that a ‘no deal’ Brexit would be the “worst possible outcome” and has asked him to consider the impact it would have on supply chains between the UK and the EU.

The “FTA has worked closely with government over the past three years to develop contingency plans for a no deal Brexit,” said James Hookham, deputy chief executive of the FTA. “We remain hugely concerned at the fragility of these plans and the state of readiness of traders, carriers and agencies on both sides of the border to implement them flawlessly as early as 31 October.

“As an apolitical organisation, we do not dispute the decision of the Referendum but we are convinced by our Members that a ‘No Deal’ Brexit would be the worst possible outcome for the economy and is to be avoided at all costs.  We are however encouraging our members to prepare for all eventualities, but in order to do so, they need urgent action from Government, starting with the extension of easements previously conceded for 29 March, some of which will have expired before 31 October. We have offered FTA’s support to both candidates in the Tory party leadership election to provide advice and guidance moving into such a crucial period for the future success of the British economy.

“Many pieces of the ’jigsaw’ remain incomplete if traders and hauliers are to continue to operate effectively after 31 October, but government preparations seem to have stalled.  We need these procedures to be completed and pending questions to be clarified and answered as soon as possible Livelihoods are dependent on cross border trade, both in Ireland and on the mainland, and the clock is ticking if businesses are to adopt and adapt to new trading processes and learn new procedures.

“Most importantly, there needs to be certainty around the what will happen at the Irish land border for the haulage businesses that will be the first to cross it on the first morning of a ‘No Deal’ Brexit.”

Meanwhile, British Retail Consortium (BRC) chief executive Helen Dickinson congratulated Swinson on her election. “We appreciate her work and the work of her colleagues to avoid a cliff edge no deal Brexit that would see consumers face higher prices and less choice on the shelves,” she said.

Addressing Johnson, Dickinson added: “We congratulate Boris Johnson on becoming the new leader of the Conservative Party and Prime Minister of the United Kingdom. There are many pressing issues in retail and the wider economy, such as rising costs and weakening consumer demand, and we look forward to engaging with Mr Johnson and his team to promote constructive solutions to these issues.

“Retailers employ three million people across the UK, making the industry the UK’s largest private sector employer, and the burden of business rates and other public policy costs put these jobs and our high streets at risk. With retail conditions the toughest they have been for a decade, the new Prime Minister must act to support the successful reinvention of retail locations and local communities. We hope the new Government will commit to a full review of the broken business rate system and to collaborate with the BRC on a strategy to bolster the retail industry during this time of rapid change.”

Image: Fotolia

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