Business groups welcomed the signing of a historic Brexit deal but have been left with just a week to assess the impact of the 2,000-page agreement which lays out trading relations between the UK and EU from 1 January.
With days left until the transition period ends, firms expressed both relief that a potentially disastrous no-deal scenario had been averted, and trepidation at what the future holds outside the trading bloc.
Crucially, the looming threat of tariffs and quotas on£668bn of imports and exports has been removed, providing some degree of certainty and allowing businesses to plan ahead but companies face a huge amount of additional red tape and many of the details are not yet widely understood.
“The deal is fantastic news for businesses in every part of the UK,” said Number 10.
Britain’s biggest business group the CBI said firms needed immediate help to adjust while the Trades Union Congress warned the agreement would allow workers’ rights to be undermined.
“We need to ensure we keep goods moving across borders,” said Tony Danker, CBI director-general.
He said the deal “will come as a huge relief to British business at a time when resilience is at an all-time low”.
“But coming so late in the day, it is vital that both sides take instant steps to keep trade moving and services flowing while firms adjust.”
Gridlock at the port of Dover this week after 48-hour ban on lorries entering France has demonstrated just how important that flow is.
Services industries, which make up around 80 per cent of the UK economy, have not been a focus of talks which have centred on trade in goods and latterly on fishing rights and the so-called level playing field which aims to keep standards aligned.
The financial services lobby group UK Finance said further negotiations would be needed.
“Looking ahead, it will be important to build on the foundations of this trade deal by strengthening arrangements for future trade in financial services,” the organisation said.
“This can be achieved by building on the longstanding regulatory dialogue and supervisory cooperation between UK and EU authorities and reaching agreements on all appropriate equivalence determinations as soon as possible.”
Financial services firms will lose their passport which allows them to operate in all EU member states while being supervised only by one regulator in the home country. Professional qualifications will not be automatically recognised across the trading bloc.
Last month, a Lords committee warned that even a “Canada-style” trade deal in which the UK would avoid tariffs and quotas, would mean significant restrictions on the UK’s £225bn professional services industry which is one the nation’s biggest exports and includes accounting, consultancy and banking.
Farmers – disruption on the horizon
Britain’s farmers would have faced crippling tariffs on exports of some products such as beef and lamb if no deal had been agreed. National Farmers’ Union boss Minette Batters said maintaining tariff-free access was “absolutely crucial” for British agriculture.
“It does remain the case though that our relationship with the EU will experience a fundamental change at the end of the transition period on 1 January 2021 and we do anticipate that there will still be disruption to trade at the border. New checks, paperwork and requirements on traders will add costs and complexity.”
It’s vital that this complexity is reduced as much as possible so that “products are not left languishing in queues at the border when the changes take effect”, Ms Batters said.
Workers’ rights ‘on the line’
TUC general secretary Frances O’Grady said the deal was “better than nothing, but not by much”.
“It won’t protect jobs and puts hard-won workers’ rights on the line.
“As we come out of the pandemic, we’re facing a crunch point for jobs and living standards. This deal is on the prime minister’s head – it’s his responsibility to make sure working families don’t end up worse off.
She added: “Ministers must also urgently build on this deal to overcome the barriers to trade and higher production costs many sectors will face which puts jobs at risk. And we will not accept a race to the bottom on rights.
Aerospace – not enough time to prepare
The aerospace and defence industries rely heavily on supply chains that criss-cross the Continent meaning they are particularly sensitive to trade frictions.
Paul Everitt, chief executive of the sector’s trade body ADS said Boris Johnson’s deal fell short of what aerospace firms asked for.
“We recognise the deal does not meet all our ambitions and will examine the full legal text to ensure priority areas including aviation safety and chemicals regulation, customs and border control, and Northern Ireland are appropriately addressed.
“There is now just one week remaining until the end of the transition period, and it will be difficult for businesses to be ready in time.
“The government must issue swift, clear and comprehensive advice to businesses on preparations, and work urgently to put all necessary arrangements in place.”
Food exports – ‘a sigh of relief’
“A deal avoids the certain collapse of key export markets and tariff related price inflation for thousands of food lines,” said Shane Brennan, boss of The Cold Chain Federation, which represents firms move chilled and frozen food.
Above all we hope it allows a spirit of collaboration in working out how the new systems, paperwork and border traffic flows will work.
“The thousands of Europeans currently stranded in Southern England are proof of the costs of not working together, and so we have to learn the lessons of the ongoing crisis as we implement this deal.
“The real implementation period for this deal starts now. Businesses must renegotiate commercial deals, rethink supply lines, retrain staff and restructure businesses.”