This week, the details of 80 planning notices set to be released by the UK Government’s no-deal preparations team emerged.
With talks hanging finely in the balance, the Department for Exiting the European Union is hoping to inform British business of the potential impact of a no-deal. The European Commission’s no-deal preparation task force, led by powerful eurocrat Martin Selmayr, has already released 70 Brexit preparedness notices for EU member states. In a separate 15-page document issued to the EU27, warnings paint a grim picture of the consequences for the customs, animal, health, pharmaceuticals and financial services sectors as a result of a no-deal divorce. According to research, more than three-quarters of the impact of Brexit will fall on just five sectors in the EU and UK. But what industries could be most hurt by Brexit if both Britain and the EU fail to conclude a deal before March 29 2019? Automotive Germany’s economic motor could be dealt a devastating blow if Brussels and Westminster fail to reach an agreement that allows Europe’s automotive industry to continue as is it. Four of Germany’s 16 states would be forced to shoulder the burden of more than three-quarters of the impact felt by a no-deal Brexit because of the automotive sectors in those regions – Bavaria, North Rhine-Westphalia, Baden-Wurttemberg and Lower Saxony. According to the German association of the automotive industry, the country last year exported 769,000 cars to the UK, its single largest export destination. A study by accounting firm Deloitte showed tariffs and devaluation of the pound after a no-deal Brexit would cause thousands of job losses at German automotive suppliers. Around 42,000 jobs in Germany rely on suppliers’ ties with Britain and without access, it significantly risks their €16.9 billion in 2016 sales from UK car production. Brexit news: Five industries will shoulder three-quarters of no-deal Brexit burden
Tourism Britons are prolific holidayers on the Continent, but a lack of future access – the Commission has to decide whether British travellers will require visas to enter the EU – major concerns are being raised. The Irish government has been told to start creating safeguard for the country’s €5bn tourism industry and the 300,000 jobs that rely on it. Tourism Ireland chief executive Niall Gibbons warned that the diminished value of sterling is driving up the costs for short breaks. He said: “The British take about 70m trips abroad every year, they’ll continue to go to sun destinations like Spain and Turkey. But short-break destinations like Ireland are most vulnerable, so it is important that we continue to invest in Great Britain. “They are very much our biggest volume market.” However, Spain is also concerned about the possible impact on one of its largest industries. Fears that Brexit will affect tourism are voiced by Spanish regions such the Balearic Islands, including Mallorca, a popular destination for British package holidays. Agriculture An often forgotten industry, however, farming will likely feel the pinch more than most going forward. Britain imports a great deal of meat, cheese and salad from Europe, which sparked fears of a meal deal sandwich shortage, which Britons purchase around 4 billion a year from supermarkets. On a larger scale, the Canary Islands ship more food products to the UK and any other nation. Regional officials have warned a “sudden withdrawal without a free trade agreement of goods and services could ruin” their businesses. Irish hauliers have also warned new shipping routes and extra checks will result in agri-food deliveries perishing because of the longer transport times. Italy’s farmers are also concerned that any restriction in free trade between the Italy and the UK would devastate their industry.
Roberto Moncalvo, president of Italian farming union Coldiretti said the UK’s exit from the EU in March 2019 would “weaken” Italy’s farming industry and export trade. He warned Italian agriculture “can’t pay the price of Brexit”. They fear an estimated cut of €2.7billion (£2.3billion) to the budget of the Common Agricultural Policy (CAP), something which could heavily impact 800,000 Italian farms. Financial services According to research by management consultancy Oliver Wyman and law firm Clifford Chance, UK financial services will take “by far the biggest hit” given London’s role as Europe’s financial capital. The sector will incur about a third of the extra “red tape” costs, according to their study. Theresa May’s White Paper outlines a willingness to take a hit to EU market access in order to be able to diverge from EU relegation. However, it will also hit around 7,000 European domiciled funds ability to operate in the UK. Brussels is resisting to offer a bespoke deal on financial services, claiming the same system that works for US financial service providers will have to work for the UK. UK negotiators warned without fresh thinking, both sides would raise damaging barriers to trade. A British document reads: “There is no third country equivalence regime to support the rights of around 7,000 European Economic Area domiciled funds to market to UK retail customers, who operate under the passport today.” UK-based AstraZeneca has warned governments to prepare medicines for no-deal Brexit
Pharmaceutical Patients across Europe could be put at risk if Brussels and Westminster fail to strike a deal that allows the movement and regulation of drugs between the UK and the Continent. The EU should start stockpiling drugs and “very quickly agree” to sharing its drug safety and infectious disease databases unless it wants to put “patients at risk”, according to the head of the UK pharmaceutical industry. Mike Thompson, chief executive of the Association of the British Pharmaceutical Industry, warned the EU27 are far behind the UK in their preparation for a no-deal Brexit. Mr Thompson confirmed the Westminster has been working with drugs firms to stockpile medicines.
He, however, admitted he is “concerned about patients across the continent of Europe”, as member states fall behind on their preparations. Cambridge-based drugs manufacturer AstraZeneca has warned governments to follow their meticulous planning or risk medicines not being available after Brexit. AstraZeneca has spent £40m on its preparations, which includes building a parallel facility in Sweden in case Britain cannot agree on joint regulation and standards with Brussels.