23 August 2018

UK government's preparations for a 'no deal' scenario

The UK government published the first 25 of a series of technical notices that set out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations.

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The UK approach - prioritising stability

At the heart of government’s approach to preparing for a ‘no deal’ scenario is a commitment to prioritise stability for citizens, consumers and business, to ensure the smooth operations of business, infrastructure and public services and to minimise any disruption to the economy. We have plans in place to do this.

In some technical notices being published today, we demonstrate where the government would act unilaterally to provide continuity for a temporary period in a ‘no deal’ scenario to protect and minimise disruption for UK citizens and businesses, irrespective of whether the EU reciprocates. The extent of such continuity will vary by area as detailed in specific technical notices with change happening in different areas over time. Crucially, however, such changes will be applied where and when it is best for the UK.

This approach underpins many of our ‘no deal’ plans that are already public. For instance, the EU Withdrawal Act 2018 ensures that in all scenarios the same rules and laws will apply the day before and after exit, with changes agreed over time by the UK Parliament.

We want businesses to be reassured that, even in a ‘no deal’ scenario in March 2019, the government will seek to do what it can to make the transition as smooth as possible and allow time to make significant changes.

That is why the technical notice on human medicines published today confirms that the government will continue to recognise batch testing, Qualified Person (QP) certification and release of human medicines that has been carried out in the EU until the government considers further change necessary, avoiding the need for these medicines to be re-tested in the UK. We will also continue to apply highly automated, risk based and intelligence targeted customs controls when the UK leaves the EU. As they do today, HMRC will work closely with industry to ensure its interventions are conducted in a way which minimises delays and additional burdens for legitimate trade, while robustly ensuring compliance.

The approach of continuity does not mean that everything will stay the same, but the priority is maximising stability at the point of departure through the government’s action.

For example, the financial services framework will need to be adjusted to reflect the fact that the UK will no longer be inside the EU’s framework for financial services. In order to ensure that we are prepared for a ‘no deal’ scenario, the UK government’s approach to financial services will, in general, be to treat EEA states largely as we currently treat other third countries, except where a different approach is necessary to manage the transition to a stand-alone UK regime. For example, the Temporary Permissions Regime will allow EU firms and funds passporting into the UK to continue providing services in the UK for a temporary period after exit.

There are areas where it would be necessary or beneficial to make further changes domestically to improve outcomes in a ‘no deal’ scenario. Two of the technical notices being released today give examples of this. In addition to the guarantees around funding that have already been made, the government can today announce that UK aid organisations will be able to continue bidding for funding from the core budget of the European Civil Protection and Humanitarian Aid Mechanism (ECHO) because the UK will provide financial assurance for any agreements signed before March 2019 in the event of ‘no deal’ in order for UK NGOs to meet eligibility criteria. We are also setting out the arrangements that will be put in place to ensure the UK meets its international nuclear safeguards and non-proliferation obligations once Euratom safeguards no longer apply, with the Office for Nuclear Regulation (ONR) delivering a domestic nuclear safeguards regime.

We are clear that in a ‘no deal’ scenario we must respect our unique relationship with Ireland, with whom we share a land border and who are co-signatories of the Belfast Agreement. The UK government has consistently placed upholding the Belfast Agreement and its successors at the heart of our approach. It enshrines the consent principle on which Northern Ireland’s constitutional status rests. We recognise the basis it has provided for the deep economic and social cooperation on the island of Ireland. This includes North-South cooperation between Northern Ireland and Ireland, which we are committed to protecting in line with the letter and spirit of Strand two of the Agreement.

The Irish government have indicated they would need to discuss arrangements in the event of ‘no deal’ with the European Commission and EU Member States. The UK stands ready in this scenario to engage constructively to meet our commitments and act in the best interests of the people of Northern Ireland, recognising the very significant challenges that the lack of a UK-EU legal agreement would pose in this unique and highly sensitive context.

It remains, though, the responsibility of the UK government, as the sovereign government in Northern Ireland, to continue preparations for the full range of potential outcomes, including ‘no deal’. As we do, and as decisions are made, we will take full account of the unique circumstances of Northern Ireland. [...]

Guidance

Guidance - second batch

Secretary of State Dominic Raab's speech on no deal planning

[...]We are stepping up the pace and the intensity of our negotiations, and I am confident a good deal is within our sights.[...]

The vast majority, roughly 80%, of the Withdrawal Agreement has now been agreed, and we are making further progress on those outstanding separation issues.

And of course those settled issues include our agreement on citizens rights, so that 3.5 million EU citizens living in the UK and the one million Brits living in the EU have their rights assured, and can carry on living as they do now.

Now, on the basis that nothing is agreed until everything is agreed, we have agreed the financial settlement.

 

And we have also agreed the terms of an implementation period, to give businesses the clarity and a sensible lead time to adjust to the changes that Brexit will bring, whilst also making sure people can feel confident that there is some finality to the whole process of leaving the EU.[...]

In some cases, it will mean taking unilateral action to maintain as much continuity as possible at least in the short term, in the event of no deal, and irrespective of whether the EU reciprocates in practice. [...]

The technical notice, ‘Trading with the EU if there’s no deal’, published today sets out how we would ensure that, on day one, there would be a functioning customs, VAT and excise system.

Giving advice to businesses on how they will need to make import and customs declarations, register for a UK Economic Operator Registration and Identification number, or make safety declarations on goods being moved between the EU to the UK.

 

Next, the technical notice on workplace rights explains the steps we are taking to transfer all EU legislation into UK law in time for exit, so workers will continue to be entitled to the rights they have now, such as flexible working or parental leave. In many areas we already go much further than the EU. [...]

The technical working group that was set up in April, will facilitate discussion of risk management in financial services, to provide further confidence in the financial services industry as we leave the EU.

There are other areas where such engagement needs to take place, whether between the UK and the EU on data protection, or between the UK and EU member states, for example between port authorities.

That is the responsible thing for us to do, on all sides.

We are raising this issue with the EU, to impress upon them our joint responsibility to work together to minimise any harm to UK and European citizens and businesses.

Those lives, those livelihoods, on both sides, should be put ahead of any narrow political interests.

Equally, I hope such engagement on no deal, necessary as it now is, will be rendered redundant by the successful outcome from our negotiations. [...]

Full statement

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