The Retailer Spring 2018

There will be opportunities for consumers from better trade deals and new markets, but the risk of not achieving a deal with the EU is enormous and its impact would be felt immediately by millions of us from the transition’s end.

NEWS FROM THE BRC BREXIT: ONE YEAR TO GO BUT A LONG ROAD AHEAD

Helen Dickinson OBE Chief Executive British Retail Consortium

We’re past the one year to go mark for leaving the EU, and the recent breakthrough in the negotiations logjam couldn’t have come soon enough. The agreement on a framework for a standstill transition period is something we’ve long argued is vital to avoid a cliff-edge by giving businesses and government time to adjust, plan ahead and invest. Another encouraging development comes from both the UK and EU-27 negotiators appearing committed to a tariff-free deal, which is important for consumers. This is particularly important for food as around 20 per cent of products sold in a supermarket are imported from the EU and adding high tariffs would have a significant impact on hard-pressed consumers. We’ve also led calls to put the trade deals that the EU has negotiated with third countries, from which the UK benefits from zero or low rate tariffs on various imports, on a more secure footing for the transition phase. With the UK and EU working together, and goodwill from the third countries involved, there is every sign that this will be achieved too. These bilateral deals enable retailers to source products, namely food and clothing, at preferential rates, so they must be transferred in time to ensure UK consumers don’t lose out. Alongside these signals of good intent however, there are fundamental questions that remain unanswered. At the top of this list is how goods will continue to move uninterrupted across EU-UK borders after the transitional period ends. Securing tariff-free trade with the EU is only part of the equation for sustaining low prices and availability of goods for UK consumers. High non-tariff barriers at our ports or on product standards could be equally as damaging to UK consumers as any hit from higher tariffs. A fivefold increase in customs declarations in the event of a no-deal, could mean Operation Stack becoming a familiar sight on the Kent motorways. We’ve been absolutely clear that any friction introduced to the flow of goods, particularly fresh and perishable ones, will lead to spoilage and gaps on shelves, reducing choice and shelf life for consumers. As we set out in our Customs Roadmap, to tackle the challenges posed by the sheer scale and volume of goods that cross our borders, we need a deal on customs alongside supplementary agreements on regulatory standards, security, VAT, haulage, transit and on drivers, to ensure goods can continue to move from A to B as efficiently as possible. Getting this right is essential to

ensure UK consumers are able to buy the products they want once the transition period comes to an end. Retailers also need a deal that helps them fulfil the skills requirements of an industry undergoing profound transformation. From distribution and stores, to head office, there’s no doubt that our EU colleagues make a vital contribution to British retailers’ ability to deliver the goods consumers want, when they want them and they deserve certainty and security to continue living and working here. That’s why the UK’s future immigration system should take an evidence-based approach as we seek to understand both the current and future needs of the industry. Against a backdrop of a tightening labour market and tough competition for workers, the priority has to be for a simple, demand-led system for the future, which strikes the best balance between getting the right skills in place and a migration system that complements our domestic labour market. There will be opportunities for consumers from better trade deals and new markets, but the risk of not achieving a deal with the EU is enormous and its impact would be felt immediately by millions of us from the transition’s end. So over the next few months until the June European Council and beyond, the negotiations should focus on reducing potential customs friction and creating a new immigration system fit for the future. The clock is ticking, whilst we have some certainty we need to see more detail on how our supply chains will work. Shopping will be one of the immediate litmus tests of the success of Brexit and what we pay for products in 2021 will depend on the deal negotiated in the next six months. There will be opportunities for consumers from better trade deals and new markets, but the risk of not achieving a deal with the EU is enormous and its impact would be felt immediately by millions of us from the transition’s end. So over the next few months until the June European Council and beyond, the negotiations should focus on reducing potential customs friction and creating a new immigration system fit for the future. The clock is ticking, whilst we have some certainty we need to see more detail on how our supply chains will work. Shopping will be one of the immediate litmus tests of the success of Brexit and what we pay for products in 2021 will depend on the deal negotiated in the next six months.

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