The Brexit deadline to agree a trade deal before the UK will be forced to leave the European Union with no deal is looming. A controversial bill published on Wednesday revealed plans to give ministers’ key powers on state aid and Northern Ireland customs. But how will Prime Minister Boris Johnson’s Brexit plan impact the economy which has been decimated by the coronavirus pandemic?
Countries around the world are battling the coronavirus infection as it continues to infect and kill thousands each day.
The pandemic has had an unprecedented impact on this year’s economy.
The UK is now in recession officially and UK debt has risen to more than £2 trillion for the first time on record.
More than 300,000 redundancies were planned in June and July according to research from the BBC.
But in an economy devastated by the impact of COVID-19, Britain has shown at least one new booming industry: customs.
As many as 50,000 people could find new work as customs agents, facilitating trade between Britain and the EU under new Brexit arrangements.
This new workforce could soon begin to rival the actual British Army in size.
More than £350m is being spent to help companies in Britain overcome red tape spawned by Boris Johnson’s Brexit deal to enable them to trade with Northern Ireland, another part of the United Kingdom.
Economic estimates from 2018 suggest the UK could miss out on 4.9 percent of future income over a period of 15 years if the UK left the EU with a basic trade deal. If the UK leaves with no deal, this figure would rise to 7.7 percent for the same period.
A no deal exit could also complicate wider trade implications for firms across Britain.
Research from the British Chamber of Commerce suggests many have not adequately prepared for changes to the UK’s trading rules with the EU.
Gross domestic product dropped 22 percent in the first half of 2020, prompting some Conservative MPs to call for a “clean break” no-deal Brexit partly because its effects would be small compared with the current economic crisis.
The difference with no deal is in the additional cost of tariffs, which are important for sectors such as agriculture, processed foods and carmaking, but not large in most other sectors.
Mr Johnson has maintained leaving without an agreed trade deal in place would be a “good outcome” for Britain.
He claims this exit would enable the UK to adopt its own policies free from interference from the EU.
Steps towards preventing this intervening were outlined in the Internal Market Bill white paper.
The legislation which is currently progressing through the House of Commons, would empower ministers to determine rules on state aid and goods travelling between Northern Ireland and Great Britain.
The drafted legislation reads: “Certain provisions to have effect notwithstanding inconsistency or incompatibility with international or other domestic law.”
The UK and EU are entering its eighth round of EU trade talks this week in London ahead of October 15, which is the cut-off date for a deal to be agreed before no-deal is the most likely outcome of the transition.
Fisheries are a contentious issue for the UK/EU trade talks, regarding the distribution of fishing quotas and a state subsidy control regime.
Outside the EU, as an “independent coastal state”, the UK will control what is known as an exclusive economic zone (EEZ), stretching up to 200 nautical miles into the North Atlantic.
EU officials say the current UK proposals would effectively double the British catch which would devastate EU coastal communities.
With a no-deal outcome, British-made cars could see tariffs of 10 percent imposed by the EU.
Michael Gov suggested in 2019 the British beef and sheep meat exports could be hit with tariffs of at least 40 percent with a no deal exit.
— to www.express.co.uk