Heads of the supply chain from over 1.3 thousand surveyed companies in the UK claim that their firms are already stockpiling parts for fear of Brexit. Honda warns of the serious consequences if there is no agreement between the European Union and Great Britain.
If the British Government fails to reach an agreement with Brussels before March, long queues will form on the British borders. Reason? A huge increase in the number of formalities and customs controls, informs TheGuardian.com
Researchers at Imperial College London estimate that only two additional minutes of waiting at the border can triple existing truck lines in ports, which could lead to 29 miles (about 47 km) long tailbacks on Kent motorways.
Delays lasting only half an hour in British ports and on the Irish border would bankrupt every tenth British company. If the trucks were to wait for crossing the border from 1 to 3 hours, as many as 14 percent of companies could expect bankruptcy. Delays from 12 to 24 hours would prevent the further functioning of up to 15 percent of enterprises – according to a survey of the Chartered Institute of Procurement and Supply (CIPS).
The authors of the report warn against a serious threat to the economy in the absence of the Brexit agreement, which is becoming more and more likely. Theresa May, Prime Minister of Great Britain, did not get support for her Brexit plan from European leaders and admitted that there was a deadlock.
Concerns of large British companies
Large corporations based in the United Kingdom warn against the threats that will result from the tightening of border controls. Among them is the clothing chain Next and car manufacturers such as Honda and Jaguar Land Rover. All these companies depend on thousands of parts that come to the Islands from the European Union every day.
Jaguar Land Rover has already shortened staffing time. In turn, Honda warns that the lack of agreement with EU countries will cause a huge increase in bureaucracy – up to 60,000 additional documents related to export and import from Great Britain. The company estimates that the costs resulting from this additional bureaucracy will reach tens of millions of pounds.
For fear of delays at the border and shortages of goods, almost 25 percent of British companies plan to stockpile goods and 4 percent already started doing it.
„It’s such a potential car crash,” admits The Guardian, John Glen, an economist at CIPS.
Common sense has got to prevail. We need to have a two-year transition period and to get something sorted out during that. The idea of day-one no-deal is just crazy,” he adds.
In turn, Ian Howells, head of Honda Europe, emphasizes that additional procedures and costs will affect the company’s productivity and competitiveness.
Economists also warn against increased border checks, import duties and other trade barriers in the absence of an agreement on Brexit. This would have very serious consequences for the economy. Experts are even talking about 1 billion pounds a year.
Leading supporters of Brexit consider the warnings unfounded and call for a departure from negotiations and the conclusion of free trade agreements around the world.
Ministers are also trying to calm down entrepreneurs and economists suggesting that in the event of disagreement, they could limit procedures to collect border taxes in order to maintain the free flow of imports and exports.