Brexit deal is 'best Christmas present I could have'

By Mary-Ann Russon
Business reporter, BBC News

Brexit deal is 'best Christmas present I could have'

The UK and European Union (EU) have finally reached a post-Brexit trade deal, ending months of disagreements over fishing rights and future business rules.

For companies already reeling from the impact of coronavirus, who feared disruption at the borders and the imposition of tariffs, or taxes on imports it’s a major relief.

But from 1 January there will still be big changes for businesses. We talk to the bosses of six different firms about how they will be affected.

‘It’s worth tens of thousands of pounds to me’

Brexit deal is 'best Christmas present I could have'

image copyrightGetty Images

Bryan Griffiths, a sheep farmer based in Devon, says a deal is “the best Christmas present I could have had. I’m delighted and relieved”.

Mr Griffiths, who is the chairman of the National Sheep Association, has 900 breeding sheep that are in lamb. These lambs are due to be sold in the summer and autumn of 2021, so he is tied into “a long production cycle”.

About 40% of British lamb is sent to the EU. If there had been no deal, reverting to World Trade Organization (WTO) tariffs would have driven down the price of lamb leaving sheep farmers with potentially large losses.

“It’s worth tens of thousands of pounds to me. My livelihood, my income, was at stake here,” he says.

“I now feel so much more confident that I can produce my lamb knowing I have a good tariff-free market for them.”

‘We need six months to prepare’

Brexit deal is 'best Christmas present I could have'

image copyrightJon Swallow

Jon Swallow is the co-founder of Jordon Freight in Felixstowe, Suffolk, a European transport specialist and freight forwarder.

He is concerned about the amount of additional paperwork that will be needed at the border, and how this will impact his customers and the 10,000 lorries that go backwards and forwards between France and the UK a day.

“I’m scratching my head – if they said they were giving people time to look at their businesses and how things are going to change, such as the time of deliveries, which will change massively, why wouldn’t you add an implementation period on?,” he asks.

“A high proportion of businesses have been waiting for this deal to see how to prepare. Now they can, they’ve got literally seven days and no one’s in the offices. There needs to be an implementation period of at least six months.”

He says a test was done in France a few weeks ago where they started checking drivers’ passport details – which takes 30 seconds a person. The test “instantly” caused a tailback in Dover of about five miles.

“You’re going to see an awful lot of drivers not returning to the UK because of this,” he stresses.

“There are going to be people wanting their goods moved into the EU, but there won’t be enough drivers. There are not enough drivers to move the goods right now.

“People have been paying astronomical costs to get their goods moved. It’s going to be quite a hard sell to get them to come here.”

‘Postponed VAT payments is massive for us’

Brexit deal is 'best Christmas present I could have'

image copyrightStephen Britt

Stephen Britt is the managing director of Anchor Storage in Suffolk, a warehousing firm that stores imported goods and then sends them out to customers.

He says he feels “blessed relief” that the Brexit trade deal has been agreed, and that there will be zero tariffs and zero quotas with the EU.

In particular, Mr Britt is excited about the fact that from 1 January, there will now be a system in place for postponed VAT payments.

“For the longest time, you’ve had to pay out the VAT on import when the goods come across the border, but now you’ll be able to account for this in your quarterly accounting instead,” he says.

“Had we not left the EU, it is unlikely that the HMRC would have allowed it… it’s a cash flow issue for them.

‘This takes the brakes off doing business globally’

Brexit deal is 'best Christmas present I could have'

image copyrightJulie Price

Julie Price is the managing director of Julie Price Insurance in Hinckley, south-west Leicestershire.

While the Brexit trade deal does not affect her firm directly, it has a key impact on the exporters and importer customers she insures and she says this will make it easier for them to trade.

With the trade deal done, Ms Price now hopes the government’s focus will be on improving the economy.

“We need flexibility and we’ve always been good at doing business with people globally. This takes the brakes off,” she says.

“We don’t need 27 countries telling us what to do, let us go. This gives us the freedom.”

‘There is still hard work ahead’

Brexit deal is 'best Christmas present I could have'

image copyrightEd Salt

Ed Salt, the managing director of Delamere Dairy in Cheshire, is relieved a deal has been done, but remains cautious about what lies ahead after 1 January.

“It is a backward step in respect to trade with regards to red tape – there’s a huge amount of import paperwork that will be needed that previously wasn’t,” he says.

“Yes there are no tariffs, yes we have a free-trade agreement, but those processes are more arduous.”

He points out that the deal will still need to be ratified by the 27 EU member states, and it is possible that the deal could be held up if the countries don’t all agree, which happened during the EU-Canada deal, when part of the Belgian government opposed it.

“I’m delighted, but there is still hard work ahead. We have a trade deal but we’re going to be trading in a different way going forward and we have to be prepared.”

‘How will this affect VAT on digital sales?’

Brexit deal is 'best Christmas present I could have'

image copyrightJo Smedley

Jo Smedley, the founder of Red Herring Games in Grimsby, creates and sells games such as murder mysteries to private and corporate clients.

Her firm does a lot of trade outside Europe, so she says the changes are unlikely to have an impact on her sales.

However, she believes if the trade deal means the scrapping of the current rules governing VAT on sales of digital services in the EU, that could provide a boost to smaller firms like hers.

“If that was being ditched, a lot of small businesses that were put out of work would be able to come back to the market place again.”

As for her supply chain, at the moment it seems to be intact, as she mostly buys from UK sellers, but she says that if they are sourcing goods or materials from the EU, border delays after 1 January could eventually have a “hidden” impact on her business.

Brexit deal is 'best Christmas present I could have'

The basics

  • A Brexit deal has been agreed, days before a deadline. It means that the UK and the EU can continue to trade without extra taxes being put on goods – but we don’t know all the details yet.
  • What took so long? The UK voted to leave the EU in 2016 and actually left on 31 January 2020, but leaders had until the end of 2020 to work out a trade deal.
  • There are big changes ahead. Although it’s a trade deal that has been agreed, there will also be changes to how people travel between the EU and UK, and to the way they live and work.

Brexit deal is 'best Christmas present I could have'

Related Topics

U.K. Tightens Restrictions as Alarm About Coronavirus Variant Grows

U.K. Tightens Restrictions as Alarm About Virus Variant Grows

British officials said severely curtailing human contact was the only way to protect people. Efforts to restart trade stalled, with more than 5,000 trucks stuck at English ports.

U.K. Tightens Restrictions as Alarm About Coronavirus Variant Grows
Credit…Andrew Testa for The New York Times
  • Dec. 23, 2020, 3:02 p.m. ET

LONDON — The British authorities put even more areas of England under the tightest restrictions on Wednesday as officials struggled to slow the spread of a coronavirus variant that is potentially more infectious than those that have already wreaked havoc around the world.

The French government lifted a 48-hour blockade of the British border that was aimed at preventing the new variant from spreading. But the effort on Wednesday to get traffic moving descended into chaos as officials struggled to carry out the tests required for thousands of drivers stuck at English ports to leave the country.

By Wednesday night, traffic began to move again, according to the British Broadcasting Corporation. But more than 5,000 Europe-bound trucks are still jammed up near the port of Dover, across the English Channel from France. Frustrated drivers fumed over the prospect of a fourth night sleeping in their vehicles. One transport company said its drivers had to throw away more than 100,000 pounds of spoiled food.

With uncertainty swirling around the looming Dec. 31 deadline for a post-Brexit trade deal, a virus spreading at astonishing speed, exhausted health care workers struggling with an influx of patients, and millions of people confined to their homes as holiday lights glimmered on deserted streets, the Christmas season was shaping up to be uniquely brutal.

Adding to that pain, Britain relies on importing fresh fruit and vegetables, especially in the winter. Supermarkets have tried to reassure customers that there is enough food, but they cautioned that some fresh goods could run short later in the week if delays continued.

Tesco, one of Britain’s largest grocery chains, emailed customers on Tuesday to say it had “good availability” of items imported from France but that it had imposed temporary purchasing limits on some items, including eggs and toilet paper.

U.K. Tightens Restrictions as Alarm About Coronavirus Variant Grows
Credit…Steve Parsons/Press Association, via Associated Press

The most pressing concern, British officials said, was slowing the rapid spread of the virus, which they attributed to the efficiency of the new variant. Britain reported 39,237 cases on Wednesday, up 56 percent from a week ago, according to a The New York Times database.

The number of people in the hospital — nearly 19,000 — is close to where it was at the peak of the outbreak in the spring. And 744 deaths were reported on Wednesday.

“Against this backdrop of rising infections, rising hospitalizations and rising numbers of people dying of coronavirus, it is vital that we act,” said Matt Hancock, the British health secretary.

Areas in southern and eastern England — including Cambridgeshire, Norfolk, Oxfordshire, Suffolk and Sussex, — are set to move to the highest level of restrictions starting Saturday, joining London and much of southeastern England. The rules require people to stay at home except for urgent travel, medical appointments and outdoor exercise, and Mr. Hancock said limiting human contact was the only way to protect people.

British officials also expressed concern about the spread of another virus variant identified in South Africa. Mr. Hancock said it was even more easily transmitted than the mutation that prompted the lockdowns in England.

Scientists are currently studying both of the newly discovered variants. While early indications suggest they are both more transmissible, more laboratory tests are needed to gain a fuller understanding of the dangers they pose.

Mr. Hancock said that the British authorities had detected two cases of the South African variant. In both cases, the infected people had been in contact with people who had traveled to Britain from South Africa in recent weeks.

Those infected with the new variant and their close contacts would be quarantined, and Mr. Hancock said that travel from South Africa would be restricted. At least five other countries have put in place similar restrictions on travelers from South Africa.

More than 50 governments have barred travelers from Britain since Saturday, when Prime Minister Boris Johnson first raised the alarm over the variant spreading in England and imposed the new lockdown.

French officials also blocked freight shipments for 48 hours, saying the border closure was needed to establish testing protocols given the alarm over the variant.

Credit…Andrew Testa for The New York Times

The British Army was mobilized to help the National Health Service, the country’s health care system, to set up facilities to administer rapid coronavirus tests to drivers and went truck to truck to conduct tests.

But it was slow going.

On Wednesday, with traffic largely at a standstill, drivers who had already spent days in their rigs were left frustrated and confused about how to get a test.

As tensions boiled over, police officers clashed with angry drivers, desperate to get home for Christmas. TV footage showed scenes of pushing and shoving. The police in Kent, which includes the port of Dover, said at least one arrest had been made.

There was concern that the mess on Wednesday could be a prelude to the logistical nightmare to come, particularly if trade talks between Britain and the European Union end without a deal.

Tom Binks, the managing director of Peter Green Chilled, a refrigerated and frozen food transport company, said his drivers have had to throw away more than 100,000 pounds of lamb, poultry, cheese and yogurt since Monday. But even before the border was closed this week, he said, his drivers had already waited as long as six hours at the port of Dover this month.

Credit…Justin Tallis/Agence France-Presse — Getty Images

“The port is basically overwhelmed,” Mr. Binks said, adding that it lacked the infrastructure to handle the increased shipment volumes as the pandemic and Brexit set off panic buying. “And then the decision from the French on top of it. It’s just unbelievable.”

He said that delivery volumes have been 70 percent higher this month than other months because of increased orders for Christmas and Covid-19 and Brexit stockpiling. In past years, delivery volumes in December have been up 30 percent compared to the rest of the year, he said.

The authorities cautioned that it could take days to clear out the more than 5,000 trucks bound for Europe.

“I think it will take a few days to work our way through,” Robert Jenrick, a government minister, said on Sky News on Wednesday. He also said any drivers who tested positive would be offered a more accurate P.C.R. test, which takes longer to process. If that were also positive, they would be offered hotel accommodation to isolate for 10 days.

Rod McKenzie, the director of policy at Road Haulage Association, which represents the British road transport industry, said probably 8,000 to 10,000 trucks were waiting to cross the border.

“It’s a mammoth task,” he told Sky News.

Some drivers have already spent three nights sleeping in their trucks with limited access to food and toilets and were looking at a fourth on Wednesday. Trucks carrying goods to Britain from continental Europe were allowed to pass through ports this week, but their numbers declined amid fears that the drivers would be stuck once they crossed into Britain.

Credit…Dan Kitwood/Getty Images

Mr. Binks, the managing director of the transport company, said he was most worried about what happens after Dec. 31, when Britain is no longer part of the European Union’s single market and customs union.

“We’ve got maybe 15 trucks heading out next week, and I don’t know whether to send them or not,” he said. Food shortages and further disruptions to deliveries are inevitable, he said.

Constant Méheut contributed reporting from Paris.