With the final Brexit deadline looming bright, it looks like there is every chance of the UK experiencing a ‘No Deal’ Brexit and reverting to WTO rules.
Business group Logistics UK (formerly the FTA) is warning of the potential economic impact which a No Deal Brexit could have on the fortunes of UK PLC. In a letter to the Sunday Times published today (25 October 2020), David Wells, the organisation’s CEO highlights that a No Deal exit from the EU could have a significant effect on the price of all imported goods and could drive inflation up as a result.
“Everyday household items we import will become more expensive under World Trade Organisation tariffs,” writes Mr Wells, “some by 30% or more. This will make the household shopping basket much more expensive, particularly in the early part of 2021 when we rely on imports for much of our fresh food.
“The actual cost of moving goods will also increase,” he continues, “if new vehicles, parts and tyres are also subject to tariffs. This is more than ‘turbulence’, as suggested by Mr Gove last week, and logistics businesses, operating on 2% margins, cannot afford to take on these costs.”
Another concern for logistics operators will be obtaining access to the EU market if the talks remain unresolved, as without a deal, UK logistics operators will also be restricted by the number of lorry access permits available to enter the EU. “The permit quota available to UK operators will fall short by a factor of four, putting businesses at risk right across the country. We are urging government to keep pressing for a deal with Brussels, to protect not only our industry but the economy as a whole.”