Alison Ryan, Trade Marketing Executive, Bord Bia - The Irish Food Board
Key events this week:
UK chancellor Sajid Javid announced on Thursday up to £2.1bn in extra funding to prepare Britain for a no-deal exit on October 31. The funding will be allocated to various different no deal preparations, such as new border and customs operations. This includes hiring an extra 500 border force officers and doubling the support for customs agents to help companies fill in customs declarations. The chancellor also plans on launching the biggest public information campaign since the war. However, there has been some questions raised as to how the department will effectively manage such a large budget in just a three month period, how 500 new staff could be trained before October 31 and whether the information campaign will be politically neutral.
Sterling fell to its lowest level in 28 months on Tuesday, as markets became increasingly worried over the possibility of the UK crashing out of the EU without a deal in three months’ time.
Prime minister Boris Johnson has sent his new Brexit negotiator to Brussels this week to deliver the message that the UK will leave without a deal on October 31 unless the EU’s 27 member states agree to rewrite Mrs May’s withdrawal deal.
Leo Varadkar has warned Boris Johnson that he is heading for a Brexit dead end, following the first phone conversation between new British prime minister and the Taoiseach. Varadkar told Johnson that the EU would stand by Ireland and its effort to avoid a hard border in Ireland. The phone call marks an increase in tensions between the two countries.
During a visit to Norther Ireland, Boris Johnson was warned by Sinn Fein president Mary Lou McDonald, that a no-deal Brexit would create economic chaos in the region and increase pressure for a poll to create a united Ireland. However, Arlene Foster, leader of the DUP, said following a meeting with the British prime minister, that he was not “entertaining” ideas of a so-called border poll.
Richard Neal, the chairman of the Ways and Means committee in the US Congress, through which all trade deals between the UK and US must be approved, has said he would not even hold a vote on any proposed agreement if Brexit leads to a hard border in Ireland. The US is one of the guarantors of the Good Friday agreement which was the basis of the Northern Ireland peace process.
The GfK consumer confidence index for July was -11, which was an improvement from the -13 in June, but still far below the positive reading taken before the Brexit referendum. However, households remain optimistic about their financial situation thanks to sustained rises in real wages, which have grown at an annual rate of about 1.5% for seven months.
Implications for Irish food & drink companies:
Boris Johnson continues to reiterate this week that the UK will leave the EU on 31 October and that he will not sit down with the EU unless they agree to remove the backstop from the Withdrawal Agreement. This means that the UK is continue to move towards a no-deal Brexit. Sterling fell to its lowest levels in 28 months this week, reflecting the currency market’s worry over the UK crashing out the EU. It is crucial therefore, that Irish food and drink manufacturers continue to prepare for all Brexit possibilities, including a no-deal Brexit.
The 2019 Brexit Barometer Industry Findings Report and Action Plan can now be downloaded from the Bord Bia website. The Action Plan provides practical information and outlines a number of steps that Irish food and drink companies can take in order to mitigate the risks posed by Brexit.
Bord Bia has also announced a new range of support services for Irish food and drink companies to help them to prepare for Brexit. There include:
Information on the support services can be found by following the above links. Alternatively, all information can be found on the Brexit page on the Bord Bia website: https://www.bordbia.ie/industry/trading-with-uk/
Looking ahead:
- The House of Commons will be on summer recess until September 3.
- October 31 is the current Brexit deadline.