Brexit - the new deal and what to do now?

Friday, 1 November 2019

By Sarah Baker, AHDB Strategic Insight Manager
With the Prime Minister’s Brexit Bill ‘on pause’, Brexit ‘flextended’ until 31 January and the country on course for a General Election on 12 December, there is still a great deal of uncertainty about if and how the UK will leave the EU.

However, with the current House of Commons demonstrating support for the PM’s deal on 22 October, when a majority voted in favour of the Bill for the first time, we attempt to clarify what the new deal is and what businesses should do now.

What is in the new deal?

Many aspects of the original deal are unchanged, including the treatment of citizens’ rights, the UK paying a ‘divorce bill’ and a transition period (until the end of 2020) when the UK will remain in the single market and customs union.

The main area of difference is around the much contested ‘backstop’ agreement which outlines what happens if both parties fail to agree the details of a future trade deal. This has been replaced by a ‘Northern Ireland Protocol’ which allows Northern Ireland to remain part of the UK’s customs territory, while following EU rules and applying EU VAT on goods. A key downside is that to ensure no customs check or controls between Northern Ireland and the Republic, there will be controls on some goods moving between Great Britain to Northern Ireland.

In addition, text around the future UK/EU relationship has altered, which suggests the UK is looking for a much looser future relationship with the EU, based on a free trade agreement. For instance rather than agreeing to stick closely to EU regulations in the (legally-binding) withdrawal agreement, there is now a paragraph on maintaining a ‘level playing field’ in the (non-legally binding) political declaration.

What will the impact be on agriculture?

The Government has not published a detailed impact assessment alongside the deal. However, given most aspects have remained the same, we might expect the impact to be very similar to Theresa May’s deal, at least in the short term. We have published a Horizon report assessing the impact of this deal compared to a No Deal Brexit. Visit the Understanding Brexit: An Impact Assessment page to download the report in full.

Where things may begin to differ is over the longer term, if the UK takes a differing approach to regulation with the EU. This could conceivably cause challenges in UK/EU trade but might help develop UK trade with the rest of the world.

What should I do to prepare?

For now it is unclear who will be leading the country come 31 January, or what UK Parliament will look like. As a result, there are no guarantees as to whether or not the latest deal will pass and the possibility of a No Deal Brexit has not been removed.

If you are a farmer or grower, you may still need to make changes to be ready for No Deal, especially if you trade in some way with the EU. There is a range of information, including links to relevant government guidance on our Brexit pages

If you are a food business or processor, it is highly likely that you will need to take steps to prepare. AHDB has joined forces with other stakeholders to create the Brexit Food Hub, a website dedicated to helping you prepare.