Preparations for a ‘no deal’ Brexit: The latest position

Published 08/01/2019   |   Last Updated 27/05/2021   |   Reading Time minutes

With both the UK Government and the EU increasing their preparations for a potential ‘no deal’ Brexit before Christmas, it is timely to look at the preparations that the Welsh Government and devolved Welsh public sector have been doing for this scenario. This article sets out the latest announcements by the UK Government and the European Commission, as well as detailing the work being done in Wales and what further work the External Affairs and Additional Legislation Committee has recently recommended.

What was in the UK Government’s recent announcement about ‘no deal’ preparations?

On 18 December 2018, the UK Treasury announced that it was continuing to ‘ramp up’ its no-deal plans. It has committed more than £2 billion in additional funding across 25 government departments for 2019-20.

The most significant Brexit allocations include £480 million for the Home Office, £410 million for the Department for Environment, Food and Rural Affairs (DEFRA) and £375 million for HMRC. According to the announcement:

  • The Home Office will use its funding to increase the capability of the Border Force ‘with hundreds of new officers’.
  • HMRC will employ over 3,000 additional customer service and compliance staff to handle increases in customs activity, to ensure the continued flow of trade. It will also use the funding for new technology to ensure that trade is ‘as frictionless as possible’.
  • DEFRA will use its funding to prepare arrangements at the border and elsewhere to ensure ‘uninterrupted trade’ in fisheries and agri-food products.
  • The Department for International Trade will use its allocation to secure post-Brexit continuity for around 40 trade agreements covering over 70 countries. It will also use its funding for work on future trade agreements around the world.

Meanwhile, in the House of Commons, the Secretary of State for Defence, Gavin Williamson, told MPs that military personnel would be on standby to assist in the event of no-deal disruption. Responding to a question from Will Quince MP, he said that 3,500 service personnel will be held at readiness in order to support any UK Government department on any contingencies they may need.

A UK Government spokesperson has also told the media that citizens and businesses should be preparing for a no-deal scenario in line with the technical notices issued up until this point, and in line with further more detailed advice that will be issued over coming weeks.

What preparation for a ‘no deal’ Brexit has been happening in the EU27?

The European Commission started to implement its ‘no deal’ contingency plan on 19 December, and launched 14 'no deal' proposals on 19 December. These include the following proposals:

  • The EU encourages its Member States to take a generous approach to the rights of UK citizens in the EU, provided that this approach is reciprocated by the UK. However, it is unclear what this would mean for citizens’ rights in practice.
  • Air services between the UK and EU will be able to temporarily continue for 12 months after the UK leaves the EU, and aviation licenses will temporarily remain valid for 9 months.
  • Regulations would be made in the event of a ‘no deal’ Brexit to allow UK road hauliers to temporarily carry goods into the EU, provided that the UK reciprocates.

The European Commission also stated that:

These measures will not – and cannot – mitigate the overall impact of a ‘no deal’ scenario, nor do they in any way compensate for the lack of stakeholder preparedness or replicate the full benefits of EU membership or the terms of any transition period, as provided for in the Withdrawal Agreement. They are limited to specific areas where it is absolutely necessary to protect the vital interests of the EU and where preparedness measures on their own are not sufficient.

The Irish Government also published its Contingency Action Plan for a ‘no deal’ Brexit on 19 December 2018. This set out a number of specific actions the Irish Government is proposing to take in the event of the UK leaving the EU without a deal.

What is the Welsh Government said about its preparations for a potential ‘no deal’ Brexit?

In April 2018, the Welsh Government response to the External Affairs and Additional Legislation (EAAL) Committee’s report on how it is preparing for Brexit highlighted its responsibility for ensuring that necessary arrangements would be in place in devolved areas. However, it also said that:

It is important to stress however that it will not be possible to completely mitigate the impacts of a no deal outcome on Wales, and it will be the responsibility of the UK Government to make the necessary arrangements in many key areas. We would also look to the UK Government to resource us, the Welsh Government, sufficiently to deal with the increased challenges that we would face as a consequence of their actions in allowing such a scenario to occur.

In November 2018, the Welsh Government also provided the EAAL Committee with the letters it had sent to stakeholders on the UK Government’s ‘no deal’ technical notices, and preparation for the UK leaving the EU. At the same time it provided the Committee with an update on how it was responding to the Committee’s recommendations on preparing for Brexit.

On 19 December 2018, First Minister Mark Drakeford attended the Joint Ministerial Committee alongside the Prime Minister, Scotland’s First Minister and Northern Ireland officials. In a statement before the meeting, the First Minister said that the Welsh Government will be ‘further intensifying’ preparations for a no-deal Brexit. He went on to say that he has asked his new Cabinet Ministers to ‘step up engagement’ with partners in Wales to prepare for a no-deal outcome, including ‘identifying areas for new investment to support preparation work’.

How might a ‘no deal’ Brexit affect specific sectors in Wales, and what further action might be needed to address these impacts?

The EAAL Committee has published three reports on Wales’ preparedness for Brexit since November 2018, focussing on ports; healthcare and medicines; and the food and drink sector. It made a number of recommendations to the Welsh Government, and those which cover a potential ‘no deal’ Brexit are set out below. These build on the Committee’s earlier report on how the Welsh Government is preparing for Brexit, which was published in February 2018. In relation to ports, the Committee recommended that the Welsh Government improves its communications with ports around preparations and planning for 29 March 2019; publishes details of its contingency plan for managing the impact of increased traffic and congestion at Welsh ports after Brexit; and works with road haulage stakeholders to ensure they can participate in the UK Government’s permit application scheme.

On healthcare and medicines, the Committee recommended that the Welsh Government outlines details of its discussions with the UK Government on the coordination of its Brexit preparedness and the work underway to ensure that there is sufficient warehouse capacity to meet any potential stockpiling requirements. It also recommends that the Welsh Government calls on the UK Government to guarantee continuing access to medical radioisotopes after Brexit.

In relation to the supply of food, the Committee recommended that the Welsh Government outlines details of the work underway to support businesses to mitigate the effects of a ‘no deal’ Brexit on the security and continuity of food supplies in Wales.

The Welsh Government will be responding to these reports in the coming weeks, which will provide greater detail on its preparedness for a ‘no deal’ Brexit in these sectors.

Article by Gareth Thomas and Peter Hill, National Assembly for Wales Research Service