Business

Suppliers condemn government’s Brexit ‘madness’

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Last week cabinet office minister Michael Gove “formally confirmed” the UK will not extend the Brexit transition period beyond 31 December.

“In my opinion it is madness, after all that has happened in 2020, that we did not even consider extending the transition,” one footwear supplier told Drapers.

“The economy has been devastated and I do not see Brexit – whether hard or soft – helping this in the short or the long term. The shutdown has been extremely challenging.

“There are major issues for business to get over and through. These may include stock, which needs to be sold at clearance prices to improve cash positions. This obviously affects profitability.

“[Recovery will] not happen overnight, or even in a few months. So, to put further constraints, administrative costs or delays on our supply chain in 2021, is, in my opinion, ridiculous.”

Meanwhile, checks on EU goods coming into the UK will be phased in next year to give businesses “time to adjust”.

The UK had committed to introduce full import controls on EU goods in January, but coronavirus has forced a rethink. Border checks will now not be introduced immediately on 1 January 2021, and tariff payments can be deferred for six months until a customs declaration has been made.

Laura Gore, managing director of silk supplier Vanners, said: “An extension [to the Brexit transition period] would of course have been preferable to us as we ship our yarns in from our Italian supplier and other parts for machinery. The phasing gives a slight comfort. However, after the damage of the pandemic, we will certainly be looking for government to support us in every way possible to stop further damage to trade.”

Simon Cotton, CEO of Scottish knitwear manufacturer Johnstons of Elgin, welcomed the phased import controls: “Europe remains a critical market for us, as many of the world’s leading brands that we service are based in France and Italy.

“Retaining unrestricted, free access to this most important market, remains absolutely essential to us and the whole UK textile industry.”

Another footwear supplier agreed: ”Phasing in the checks makes sense and will prevent bottlenecks in the supply chain, while allowing companies, including freight forwarders, time to establish new processes, new timelines for supply chain and to iron out issues ahead of time.

“I think most companies were planning on a no-deal Brexit and this would have formed part of it, so for those who were or are prepared, it will be seen as a bonus.”

Kate Hills, founder of UK manufacturing trade show Make It British, said: “I think this will be welcomed by manufacturers whose raw materials come from the EU, especially when supply chains are still disrupted because of Covid-19.”

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