The Society of Motor Manufacturers and Traders (SMMT) pleads for a free trade deal as it reveals that UK car production fell by 16.5% in November 2019. Anna Tobin reports

The latest figures from the SMMT show that UK car production was down 16.5% in November, with 107,753 units manufactured. A fall in consumer and business confidence, weak demand from overseas’ markets and model production changes all influenced the significant drop. While factory shutdowns around the time of the UK’s planned October exit from the EU to mitigate against any disruption arising from Brexit, were also a contributing factor.

The SMMT estimates that Brexit contingency measures taken by the car industry have now cost the sector more than £500 million.

“UK car production is export-led, so we look forward to working with the new Government to deliver an ambitious trade deal with the EU,” said SMMT chief executive Mike Hawes. “To ensure our competitiveness at a time of dramatic technological change, that deal needs to be tariff-free and avoid barriers to trade, which, for automotive, means that our standards must be aligned. This can be achieved if Government and industry work in partnership to re-establish the UK as a great place to invest and ensure that automotive keeps delivering for Britain.”

Last week’s election result crystallised the choices ahead of the new Government. “Get Brexit done” was a great election slogan, but in reality 31 January will mark “the end of the beginning,” in Churchill’s famous words. At that point, the UK will move into a new era where the need will be to ‘Get Brexit begun.’

The Government’s first decision will be whether to retain the red lines famously set out by then premier Theresa May on taking office in 2016. Given the tight timescale for a decision, which has to be made by the end of June, its alternatives are probably limited:

• Either the UK decides to maintain more or less complete alignment with the EU on standards, regulations, etc. and adopts a Norway-type relationship with the EU27.
• Or it decides to leave with No Deal when the transition period comes to an end on 31 December 2020, and then begins to negotiate a completely new type of deal.

The reason for the binary choice is that there just isn’t enough time between now and the end of 2020 to negotiate and ratify a totally new working arrangement between the UK and the EU. It would take at least two years, and so far the Government has said that it will not request such an extension.

We look forward to continuing to support you over the coming year as these momentous decisions are made. The Ready for Brexit newsletter will move onto a monthly basis, to support you in your contingency planning for a No Deal outcome.

It will focus on providing more detail on the key areas that will be impacted by a No Deal decision – Customs and Tariffs, Finance, Legal, Services and Employment and Supply Chain. Our team knows how these areas used to operate before 1993, when the Single Market and Customs Union began.

In the meantime, we would like to wish you a Merry Christmas and a Happy New Year.

Anna

Rosie Bailey, director of business development at courier services provider CitySprint, warns SMEs that complacency won’t necessarily deliver their businesses safely through Brexit, they must prepare

This article is the view of the author and not necessarily of Ready for Brexit

Regardless of whether you are for it or against it, there’s no arguing that Brexit uncertainty continues to linger across the country. Neither people, nor businesses — big or small — know exactly what’s to come, and neither do the experts.

One thing we do know, however, is that in the last three years this uncertainty has cost UK SMEs an estimated £1 million on average in terms of lost revenue/ turnover. This alarming number was revealed in CitySprint’s seventh annual Collaborate UK survey of over 1,000 decision makers and SME leaders from across the UK. While the final impact of Brexit is still yet to be seen, what became crystal clear through our research was that more governmental support is needed — with 45% of UK SME decision makers stating they don’t believe the Government has done enough to help businesses adequately prepare for Brexit.

But it’s not all doom and gloom. In fact, our research also found that there’s a clear sign of continued resilience in the UK’s business community — with half of SMEs feeling more confident than they did twelve months ago. While this is fantastic to see, it’s crucial that business owners and SME decision-makers don’t get complacent. Although they are understandably focused on their day-to-day operations, it’s essential that they consider how and where their business could be impacted by Brexit and prepare accordingly. But what should they focus on?

For starters, trade. With the final Brexit deal not yet signed off and the possibility of a ‘no deal’ exit still not quite off the table, the effect on national and cross-border trading and regulations remains unknown. Despite this uncertainty it was encouraging to see that, on the whole, UK businesses remain upbeat — with 49% looking to expand their customer base across the UK in the next year and a further 69% planning to expand into Europe (a positive increase of 28% since the same research last year).

It’s important for businesses to remember that regardless of the form the final Brexit deal takes, it’s likely to impact the way things work — even trade within the UK. As such, SMEs should consider contacting their logistics and courier partners to understand what the possible impact on their specific operations might be. With many variables in play, planning for the future is tricky, but liaising with partners directly can help shine a light on the impact on operations in each of the most likely given scenarios.

Supply chains

Another area of focus should be the supply chain.

In an increasingly complex trading environment, it’s already a challenge for many businesses to understand their end-to-end supply chain. And Brexit will likely add another layer of complexity to the mix that they need to be prepared for. To mitigate the risk, it’s important that businesses conduct a thorough assessment of their supply chain strategy, if they haven’t already done so.

While it can be a lengthy process, SMEs must not neglect the importance of re-evaluating their supplier relationships — from customer service and inventory all the way to sourcing, manufacturing and, ultimately, transportation. We were reassured to see that managing supply chains more effectively is a priority for the majority of UK SMEs, with 81% stating that their supply chain has remained the same or become more important in the past year. To ensure they are adequately prepared for whatever is to come, businesses must take a front foot approach and make suitable adjustments now — after all, changes to the supply chain often can’t be made overnight.

But while there are a number of things SMEs should be proactively doing to prepare for whatever is to come, one thing was made starkly obvious through our research. The Government needs to do more to support the UK’s SME community.

We were shocked to find out that almost half (43%) of SMEs lack confidence in the Government’s ability to protect them from the impact of Brexit — a 7% increase since the same question was put to them in 2017. Furthermore, less than a third (32%) of UK SMEs saw the Government’s ‘Get Ready for Brexit’ advertising campaign, which ran over Summer and over one in five (21%) haven’t seen or accessed any Government guidance or support at all since 2016.

In spite of a new January 31 deadline, Brexit is still as elusive as ever and no one can know for certain if or when Britain’s deal to leave the EU will be finalised. It’s now more important than ever for the Government to pull out all the stops to help businesses navigate the specific complexities of Brexit. In particular, there’s a strong appetite among SMEs for Governmental guidance around which regulations could change and how their business could be affected (32%) as well as support around tax relief or breaks (31%).

The bottom line is that if the UK’s SMEs are to continue to survive and thrive post-Brexit, they need to ensure they have taken necessary steps to protect themselves against all outcomes. This means both proactively taking steps now for future business success and stability, but also seeking out support as and when needed. While this ongoing uncertainty continues, preparation is crucial to protect SMEs from whatever lies over the horizon.

Minette Batters, the National Farmers Union president, says the new Government must do everything in its power to avoid the UK having to operate on WTO terms following Brexit. Anna Tobin reports

Following the general election result, the National Farmers Union (NFU) president Minette Batters said: “In our own election manifesto, we raised a number of crucial issues we need the new Government to address now, to ensure British food production has a sustainable and ambitious future.

“Top of that list is Brexit. It’s imperative we secure a future trade deal with the EU that is as free and frictionless as possible, avoiding the damaging spectre of trading with our largest partner on WTO terms. Alongside this, our future trade policy mustn’t allow imports of food produced to standards that would be illegal to produce here.

“The UK could embark on its first trade negotiations for decades in just 50 days’ time – the Government must set up a Trade and Standards Commission as a matter of urgency so that they can work with industry and stakeholders to ensure those negotiations do not allow the high standards which are the hallmark of UK farming to be undermined by imported food which would fail to meet our own domestic regulations and values surrounding animal welfare, environmental standards and traceability.

“From our ambitious vision for agriculture to reach net zero greenhouse gas emissions by 2040 to increasing our self-sufficiency by producing more high-quality, British food at home, British farmers are ready and able to tackle the challenges ahead as well as making the most of new opportunities.

“We live in a country that has some of the highest animal welfare, environmental and food safety standards in the world, all the while providing the British public with the third most affordable food on the planet, and at the same time maintaining and enhancing the iconic British landscape. That’s why the public trusts and supports British farmers.

“Britain needs the new Government to back British farming like never before; to invest in domestic food production so we can increase our productivity, create more jobs and deliver more for the environment. Government needs to act to ensure guaranteed access to a skilled and competent workforce; develop a framework for a more competitive and sustainable farming industry; put in place a long-term food strategy; and place science at the heart of policy making. This will allow farming businesses to continue doing what they do best – provide safe, traceable and affordable food for the nation.”

Business organisations have been quick to respond to the general election results. Anna Tobin investigates what they had to say

The  Confederation of British Industry 

Following the news of the general election results, Carolyn Fairbairn, the director general of the Confederation of British Industry (CBI), urged the Government to speedily give business clarity on Brexit, she said: “Congratulations to Boris Johnson and the Conservative Party. After three years of gridlock, the Prime Minister has a clear mandate to govern. Businesses across the UK urge him to use it to rebuild confidence in our economy and break the cycle of uncertainty.

“Employers share the Prime Minister’s optimism for the UK and are ready to play a leading role. They can bring the innovation, investment and jobs for a new era of inclusive growth. The biggest issues of our times – from tackling climate change to reskilling the workforce for new technologies – can only be delivered through real partnership between Government and business.

“The starting point must be rebuilding business confidence, and early reassurance on Brexit will be vital. Firms will continue to do all they can to prepare for Brexit, but will want to know they won’t face another no deal cliff-edge next year. Pro-enterprise policies on immigration, infrastructure, innovation and skills, will help relaunch the UK on the world stage.

“Despite recent challenges, the UK remains a great place to start and build a business. A new contract between enterprise and Government can make the UK a global magnet for investment, powering higher productivity and living standards across the UK.”

Federation of Small Businesses

Mike Cherry, the national chairman of the Federation of Small Businesses (FSB), has his fingers crossed that the majority Government formed following the general election will bring the stability that SMEs crave. He said: “After more than three years of Brexit absorbing Government bandwidth, the Conservative Party has pledged to tackle the many domestic challenges that have been neglected during that time.

“In the coming days we will see a Queen’s Speech and steps towards leaving the EU next month. Amid this, small businesses the length and breadth of the UK will be looking to the new Government to achieve positive change for small firms in its first 100 days, not least with publication of a pro-business Budget in early February.

“The restoration of small business confidence and trust in politics rests on seeing the Conservatives’ pledges to us swiftly enshrined in a programme for Government. It’s now time to turn kind words on bread and butter issues facing the small business community into tangible action.

“This Government needs to deliver a business-friendly Brexit. That means one that protects the three t’s: trade, talent and a proper transition. The third of those is absolutely critical. We have to avoid a scenario where we suddenly crash out of the EU with no time for small firms to prepare for what’s coming next.”

“Restoring business, investor and consumer confidence – and firing up the economy – must now be the Prime Minister’s top priority.

“Campaign slogans must give way to a renewed focus on the details that matter. Our business communities need to see swift, decisive action to avoid a messy and disorderly exit from the EU and to tackle the barriers holding back investment and growth here in the UK.”

British Chambers of Commerce

Avoiding a no-Deal Brexit and restoring business confidence are among the demands that Dr Adam Marshall, the director general of the British Chambers of Commerce (BCC),  is making of the new Government, following the general election. He said: “Restoring business, investor and consumer confidence – and firing up the economy – must now be the Prime Minister’s top priority.

“Campaign slogans must give way to a renewed focus on the details that matter. Our business communities need to see swift, decisive action to avoid a messy and disorderly exit from the EU and to tackle the barriers holding back investment and growth here in the UK.”