Well done to Wirral Chamber for organising a series of events on Preparing for Brexit last week.
As a business which only advises on the law of England & Wales and only has offices in the North West, I wondered if I was wasting my time.
Although we do provide advice to clients based abroad on their rights to enter the UK and in relation to the purchase of property and assets in the UK, I am still not sure in my own mind whether that is an export or a service.
There are VAT rules which allow us to provide the service without VAT if a customer is not settled in the UK but beyond that I am still confused. In any event, no deal Brexit planning has focused on goods passing across frontiers rather than changes relating to the service sector, so little is clear.
I was glad I attended: The seminar was well worth the time. I now understand some of the challenges that our customers will face who do trade with Europe and the world beyond, as well some threats to our own.
I had not realised, for example, that all the EU trade deals made with the rest of the world (covering some 70 countries) will automatically fall the moment we leave the EU, notwithstanding any transitional period. So far the UK has signed 17 deals with some of those countries but that covers only 8% in volume, in terms of the trade with the countries concerned. Japan, for example, will not be ready (which is 2% of our total trade) and neither will Canada.
All the trade to those countries will revert to World Trade Organisation (WTO) rules, which, in some cases, will impose punitive tariffs on goods which at present can pass freely into those jurisdictions.
But is there any plus to Brexit? Well yes.
Thousands of jobs are being created to adjust to this new non-free trade regime, particularly if we insist on ditching our customs union with the EU.
New jobs include a big increase in Border Force and Customs employees.
The Chambers of Commerce around the country are also increasing their compliment of staff to undertake increased activity in a number of areas.
Firstly, businesses will have to cope with complex customs documentation and will need advice on how to complete them. Secondly, certificates of origin will be required to certify whether any products manufactured in the UK are comprised of components the majority of which originate from the UK. This is a complex and technical task. Thirdly, VAT and data rules which are currently harmonised will diverge requiring businesses which export goods or services to the EU, having to appoint representatives in Europe to act on their behalf to deal with Data and VAT issues which arise as a result of their trading there.
These new jobs will add nothing to the competitive nature of the UK economy.
Indeed they will be extra costs for our nation and its businesses making us less competitive on the world stage. Many businesses for whom exporting is not a major activity will simply give up trying. Others will set up subsidiaries in the EU to avoid all these penalties thereby increasing economic activity in the EU at the expense of the UK.
No wonder Monsieur Macron is urging us out before we change our minds.
As for my own business, yes we will gain from the additional advice which we will need to give to our clients on issues to do with Settled Status and the like. On the other hand we should brace ourselves for increased costs, potential supply chain shortages and additional data protection challenges. We also need to examine our own contracts with third parties to ensure that clauses which mention the EU or membership thereof are altered and renewed to prevent them becoming invalid.