Warning Of Higher Costs In Case Of Hard Brexit Issued By UK Government

According to notices published Thursday by the United Kingdom government, some of the consequences that would have to be faced by the country in case of a failed Brexit include higher charges on international credit card payments, additional taxes on parcels from Europe and more restrictions for hospitals for importing blood or organs for transplant.

“I remain confident a good deal is within our sights, and that remains our top, and overriding, priority,” said Brexit secretary Dominic Raab. “But, we must be ready to consider the alternative.”

Guidance form the British government had been sought by companies since the Brexit vote in June 2016.

“Businesses have waited too long for answers to some basic questions around Brexit … ‘no deal’ preparations should have happened far earlier,” said Adam Marshall, director general of the British Chambers of Commerce.

Areas including banking, medicine, farm subsidies, organic food production, nuclear power and science research funding are included in the 24 documents published by the UK government. More red tape and higher costs would have to be faced by business in many cases, the government warned.

Up to £20 billion ($26 billion) per year would be the cost to business for filing new trade declarations, according to the estimates of the UK customs officials.

Following the publication of the documents, there was a fall in the British pound with a 0.75% fall against the dollar to $1.28. Before the end of September, the UK government would publish about 50 more notices.

A hard Brexit would hit almost every aspect of life and business in the United Kingdom, shows the scope of the documents.

The documents also warn that bank accounts in the UK may not be accessible for people living outside the country. Access to their UK pensions might also be lost by British retirees living in Europe.

For the management of new custom policies, companies might require to purchase new software or hire customs experts. And since the current health warning labels are copyrighted by the European Union therefore the packaging for cigarette cases might have to be changed by tobacco companies.

According to the notices, the pharma companies have also been advised by the UK government to stockpile additional medicines for at least six weeks in the UK to make sure that there is a availability of medicines in UK after Brexit.

Earlier this year, its own guidance on the potential consequences was published by the European Union.

Concerns and fears are rising about the possibility of a hard Brexit or without any transition deal when the UK leaves the EU in March of 2019 because of the slow pace of Brexit negotiations. Which would mean that British companies would instantly loose access to the EU’s single market and customs union.

(Adapted from Fortune.com)


Categories: Economy & Finance, Uncategorized

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