Separate names with a comma.
With time running out to strike a deal, Next PLC’s chief executive has warned that a no-deal Brexit could bring Britain’s ports grinding to a halt.
Lord Wolfson, a prominent Brexit supporter and Conservative life peer, spoke as Next announced its Brexit contingency plans. Wolfson urged the government to give businesses greater clarity on how a no deal scenario would be managed.
A recent HMRC letter to VAT registered businesses addressed the reality of a no-deal Brexit. The letter, written by the tax authority’s deputy chief Jim Harra, said the government’s priority “is maximising stability at the point of departure”.
Although the letter acknowledged that no-deal would mean “customs, excise and VAT procedures”, it fell well short of outlining any sort of contingency plan for dealing with the fallout.
As Jason Hunter, a former international trade negotiator, told us, “At 11:01pm on 29 March, if you have goods in transit and you don’t have the paperwork prepared, it’ll get stopped as soon as it hits an EU border.”
It appears as if Wolfson shares Hunter’s concerns. Next’s 11-page Brexit report said the risk of “queues and delays” at UK and EU ports as a result of “increased customs declarations for other companies” was high.
Next’s 11-page report is a sober look at the indirect and direct risks. “The biggest risk to businesses, isn’t tax or duty – it is that the ports won’t work,” Wolfson said in a statement accompanying the report. “The government needs to alleviate the pressure on ports and the volume of work carried out there.
“It is a risk beyond our control but there is lots of time to make sure the ports run smoothly. If the ports stop working, it will be a problem – we are always running out of our bestsellers. If we have to do with EU stock what we currently do with non-EU stock, we won’t have any issues but we need to streamline import processes.”
The Next report outlined three steps the government could take “to speed up the processing of in-bound traffic” and “reduce the volume of work required at our ports and airports”:
Despite these warnings and suggestions, however, Next (and by default Wolfson) remain bullish in its assessment of Brexit. The company said a no-deal outcome would not pose a “material threat” to Next’s operations or profitability. In a worst case scenario, it said, it would add “+0.5% to [Next’s] prices at most”. “In reality, some of these additional costs would be shared with suppliers or eliminated through alternative sourcing routes.
“We are well advanced in our preparations and are setting up all the administrative, legal and physical infrastructure that will be needed to operate effectively if the UK and EU are unable to agree a free trade agreement. We are confident all the necessary arrangements we need to make will be in place by March of next year.”
This article was originally posted on our sister site, AccountingWEB.