FOB Chief Executive's Weekly News for 14th October 2019

Barclays Brexit/Economic Update: Brexit Agenda Becomes Unclear

Under the new backstop proposal, Norther Ireland (NI) would remain in the European Union (EU) regulatory space but only for industrial and agri-food products leading to the establishment of two ‘half’ borders. One of them is land border between NI & the Republic, and other one in the Irish sea. However, border procedures would be reduced to their simplest form and carried out away from the border. The idea of a NI-only backstop was entirely drafted in 2018 before the Democratic Union Party (DUP) withdrew its support for such a solution. This forced Theresa May, to request a UK-wide backstop implementation. The promise of an escape vote seems to have contributed to bringing the DUP on board. From an EU perspective, it would be difficult to argue against the idea of a democratic consent but if the deal is to proceed, many details may have to be reworked, such as the design of border checks or allowing the EU side to also have a stand on the escape mechanism.

The UK economy is running low with services purchasing manager’s index (PMI) below 50, signalling a broad-based weakening of activity. According to respondents, activity is being diverted from the UK by overseas clients leading to lower capex and lower employment. Weaker margins and the lowest optimism since the EU referendum have contributed to the UK services PMI falling further behind the euro area and global average PMIS.

Meanwhile, the manufacturing PMI contracted for the fifth consecutive month in oct’19. This was primarily due to business restructuring, cost cutting and a consequent reduction in capex & payroll across the board, which seemed to have impacted the investment goods sector. Manufacturers are being hit both by global industrial slowdown and domestic uncertainty around Brexit. Notably, while some firms are gearing up Brexit preparations, the extent of contingency planning for a no-deal Brexit is substantially lower than initial months of 2019, likely reflecting a widespread belief that no-deal Brexit is averted for now.

UK government/Defra Brexit Update: The UK is getting ready for Brexit on 31 October with or without a deal. As part of our preparations for Brexit, we are continuing to provide guidance to ensure businesses are aware of what they need to do to prepare.

Agri-Food businesses should ensure that they are prepared for Brexit and continue to visit GOV.UK for guidance.

Specific guidance for food and drink businesses is available on the Food and Drink GOV.UK landing page, including advice for importers and exporters of animal products, and advice about food labelling, tariffs, data protection and more.

As a Defra stakeholder, the Agri-Food Chain Stakeholder Engagement Team would like to share this information with you, and highlight new guidance from this week. Please find this information below and we would be grateful if you could distribute these communications to your members and their relevant supply chains.

1. Events and webinars to help you prepare for Brexit

There are several opportunities to access support and guidance to help you prepare for Brexit.

2. Association of Labour Providers Brexit Readiness events

The Association of Labour Providers (ALP) is hosting a number of free Brexit workshops across the country. These are open to all UK recruiters, HR professionals and employers, and will provide specific, practical guidance on the actions that businesses need to take in respect of their existing and future EU workforce. Further details can be found in the attached flyer (278-GRFB_Flyer_162117), including a link to sign up to the events

3. Brexit Business Readiness Events

The Government is arranging Brexit Business Readiness Events across the UK to help you prepare. Join us at a free event in your area to meet government advisers and to find out what actions your business needs to take to prepare.

The events will combine a keynote address, interactive support, advice stands and in-depth sessions led by subject matter experts. They will provide you with specific business-focused advice and help.

4. DIT Get ready for Brexit business-facing workshops

As part of ongoing support for businesses, the Department for International Trade are running a series of events to help exporters to get ready for Brexit on 31 October. These events will be particularly useful for businesses who are exporting to the EU.

You’ll leave the event with a personalised action plan to prepare your business for Brexit. DIT will talk about impact to supply chains, changes to regulations and contracts, where to find tariff information, and what you might need to speak to customers and employees about, among a range of other topics.

See dates, locations and sign up – limited registration place available.

5. HMRC Getting ready for Brexit webinars

HMRC are running a number of webinars for UK businesses involved in the movement of goods between the EU and the UK.

Find out what you need to know to keep importing and exporting by signing up for a webinar.

6. New and updated guidance

An update to exporting guidance (updated 18th September)

The guidance around mixed loads has been clarified. If you’re exporting a consignment with includes a mix of products, you’ll need an Export Health Certificate for each product type. This is reflected in the GOV.UK guidance here.

2. Importing excise goods from Ireland to Northern Ireland (published 7th October)

HMRC has published guidance on importing excise goods from Ireland into Northern Ireland in a no-deal Brexit.

You’ll need to make an import declaration using the Customs Handling of Import and Export Freight (CHIEF) system and use the Excise Movement and Control System (EMCS) to move the goods to a UK warehouse. There will be no physical checks at the border. The full guidance is available here.

3. Temporary tariff regime update (published 8th October)

On Tuesday 8th October the Government published a statement re-confirming the temporary tariff rates that would apply to the agri-food and other sectors if the UK leaves the EU without a deal on 31st October.

There are three specific changes affecting HGVs, bioethanol and clothing. Further information about these tariff rates can be found here.

4. Export composite food products to the EU in a no-deal Brexit (published 11th October)

A new guidance page has been added to GOV.UK on composite goods (such as pies and pizzas). The guidance covers what counts as a composite food product, and the rules that you will need to follow to export these products if there is a no-deal Brexit. Please find the guidance here.

7. News and resources

Brexit readiness report (published 8th October)

This week, The Government has published the Brexit readiness report detailing the UK’s preparedness ahead of Brexit on 31 October. This report has been published to inform businesses and citizens on what they need to do to get ready for Brexit on 31 October. Please find the report here.

Information videos for traders in a no-deal Brexit (updated 9th October)

HMRC have published information videos for traders in a no-deal Brexit. Find further information about Transitional Simplified Procedures, Exporting using the Common Transit Convention and a webinar about the 5 main areas that UK businesses must be aware of to keep trading goods when the UK leaves the EU. Please find these videos here.

Migration Advisory Committee: Call for evidence

The Home Secretary has commissioned the Migration Advisory Committee (MAC) to advise on the future system of salary thresholds, and to look into an ‘Australian-style’ points-based system (PBS), and how this might work in the UK. A call for evidence for both of these commissions has been published at: https://www.gov.uk/government/consultations/salary-threshold-and-points-based-system-pbs-commission-call-for-evidence. The evidence provided by stakeholders is important to inform the MAC’s work. You are invited to provide evidence to the MAC using the online forms available at the link above. The deadline to respond is 5 November 2019.

Food and drink showcase Dropbox with shareable resources

Our Dropbox link has resources that you can access. Click here or copy this link into a compatible browser (Chrome, Edge, Firefox, Safari): https://shwca.se/FoodBrexit.

Brexit Update EU Citizens: EU Settlement Scheme

EU, EEA and Swiss citizens and their non-EU family members can apply now to the EU Settlement Scheme to continue living in the UK after Brexit. This applies whether we leave the EU with or without a deal. Under the Scheme, successful applicants are granted either pre-settled or settled status. With both pre-settled and settled status, EU citizens and their family members can continue to work in the UK; use public services like the NHS; and use public funds, such as pensions, after we leave the EU. Lots of employers want to offer reassurance to their employees and make sure they have the right information. To do this, a toolkit has been developed to help employers raise awareness of the EU Settlement Scheme with their employees. Please click here to download the toolkit.

European Temporary Leave to Remain

If the UK leaves the EU without a deal on 31 October 2019, EU, EEA and Swiss citizens moving to the UK will still be able to start work and study as they do now. However, to remain in the UK after 31 December 2020, they will need to apply for European Temporary Leave to Remain. The deadline for applications will be 31 December 2020 and applications will be free of charge. Successful applicants will receive a temporary immigration status that will allow them to stay in the UK for 36 months from the date it is granted. With European Temporary Leave to Remain, EU citizens will be able to continue to work in the UK, use the NHS, study, and access public funds such as pensions. Further details can be found at: https://www.gov.uk/guidance/european-temporary-leave-to-remain-in-the-uk

Brexit: Companies in the food and drink manufacturing sector have raised their concerns over the dangers posed by the UK government’s tariff schedule that would apply in the event of a no-deal Brexit. It is designed by the government to avoid fuelling inflation once the UK leaves the EU on 31st oct’19. The schedule would see 88% of total imports by value into the UK eligible for tariff-free access and would last for 12 months. However, organisations in the industry have stated that this could lead to lower-quality food penetrating in the UK market. Dairy UK stated that the temporary tariff schedule did not do enough to recognise the real and imminent danger, which in case of a no-deal Brexit would have on the British dairy sector. This could cost industry £1.3bn in lost export potential. The tariffs were described as high and would make British dairy products uncompetitive on the EU market. This would translate to 150,000 tonnes of cheese and 33,000 tonnes of butter unable to enter the EU market and eventually flooding the UK market, creating the potential for farm-gate price collapses.

CBI Brexit Resources: With 31 October fast approaching, the CBI is doing everything it can to help get business ready for no deal. Our updated no deal preparations hub is packed with extra resources, so you and your members can easily access our advice on everything from customs to data flows. This resource is available to all businesses, please feel free to share the link with your members.

https://www.cbi.org.uk/no-deal-preparations-hub/?utm_campaign=20191010_Trade%20Association%20Update&utm_campaign=20191008_EU%20and%20International%20Update&utm_medium=email&utm_medium=email&utm_source=Eloqua&utm_source=Eloqua&elqTrack=true

FDF Brexit Resources(1): Preparing for Brexit

Free webinar for members and non members

16 October 14:00-16:00

Please click on the link below to register:

http://www.fdf.org.uk/events/Webinar-Preparing-for-Brexit/?tr=14cck6L

Boris Johnson has committed to delivering Brexit on 31 October – in just three weeks time. Whether it is a deal or no-deal on 31 October or an extension and a continued period of uncertainty, business need to be ready. The food and drink sector is perhaps more affected by Brexit than any other – and with such change comes opportunities as well as risks. We are hosting a webinar with experts from Grant Thornton who will provide an overview on how to get ready and refine your Brexit plans, identifying ‘no regrets’ actions that will prepare you for any eventuality, and sharing their insights on what other businesses are doing. They will provide a framework for Brexit preparation that works for all eventualities, share tips, and take your questions.

http://www.fdf.org.uk/events/Webinar-Preparing-for-Brexit/?tr=14cck6L

Please register by 5pm on 15 October to secure your space. Late registrations cannot be guaranteed. This webinar is delivered by FDF and Grant Thornton UK LLP with funding support from BEIS.

FDF Brexit Resources(2): To support EU citizens working in the food chain to prepare for Brexit, FDF are running four free webinars in advance of 31st October to explain how EU citizens can apply for the EU Settlement Scheme. This is a free registration scheme which will allow EU citizens to remain in the UK beyond 2020.

The webinars will take place at:

3pm – 4.30pm on Thursday 17th October. Please click on the link to register:

http://www.fdf.org.uk/events/Brexit-Webinar-EU-Settlement-Scheme/?tr=44ck0At

3pm – 4.30pm on Wednesday 23rd October. Please click on the link to register:

http://www.fdf.org.uk/events/Brexit-Webinar-EU-Settlement-Scheme-1/?tr=44ck0Bz

3pm – 4.30pm on Thursday 24th October. Please click on the link to register:

http://www.fdf.org.uk/events/Brexit-Webinar-EU-Settlement-Scheme-2/?tr=44ck0CF

10am – 11.30am on Tuesday 29th October. Please click on the link to register:

http://www.fdf.org.uk/events/Brexit-Webinar-EU-Settlement-Scheme-3/?tr=44ck0DL

These sessions will include information on:

Who is eligible
How to apply
The application process
What rights Settled Status will give after the UK leaves the EU • How you will demonstrate your Settled Status

FDF are delivering these webinars in partnership with law firm Squire Patton Boggs with funding support from BEIS. For each webinar, there will be an opportunity for questions to be answered by an immigration law specialist.

The webinars are free to attend, but please register in advance. These sessions are aimed at supporting EU citizens directly, though HR professionals, managers, and Brexit advisors who are working on these issues at a corporate level may also find the webinar of use.

FSA: has published a webpage with the survey results for 2018 survey for acrylamide and furans in food; see details at: https://www.food.gov.uk/research/research-projects/survey-of-acrylamide-and-furan-in-uk-retail-products
275 products were analysed for acrylamide and 134 were analysed for furans, including 2-methyl furan and 3-methyl furan. For this survey, the acrylamide results for those UK retail foods sampled over the period January 2018 – 11 April 2018 were compared against ‘indicative value’ (IVs) and products sampled afterwards were compared against ‘benchmark level’ (BMLs).

Former CMO calls for decisive action to reverse rise in childhood obesity

Dame Sally Davies, the former Chief Medical Officer for England, who was commissioned by the Government to review work in England on obesity, has published her report. This clear and rigorous report makes wide ranging recommendations based on 10 principles in order to achieve the Government’s stated ambition of halving childhood obesity by 2030. Dame Sally concludes that we are “nowhere near achieving this” yet, but “if we are bold, we can achieve this goal.” As the Foresight Report did in 2007, Dame Sally points to our obesogenic environment, which makes it more difficult now than in decades past for children and adults to maintain a healthy weight. She says this must change because “our children have a right to live in a healthy environment” and so she argues child health should be prioritised over corporate profit in government policy. It is clear that Dame Sally wants the Government and food industry to work in partnership to create a healthy food environment, but she warns that the Government “must not shy away from regulation. When government sets targets or legislates, business innovates and can still make a profit, for example when it develops better and healthier foods. But currently the playing field is not level – it is too easy to make money from selling unhealthy food and too hard to make money from selling healthy food.” She cites the Soft Drinks Industry Levy, as a successful “nudge” and recommends it is extended to sweetened milk-based drinks with added sugar. She notes that since its introduction there has been a 10.2% increase in overall sales (in litres) of soft drinks, but the sugar content of these drinks has decreased by 21.6% and sugar consumption has gone down in every socio-economic group. Overall, she calls on our politicians to demonstrate the leadership in tackling childhood obesity, which polls suggest the public want. Responding to the report, the Food and Drink Federation (FDF) highlighted the positive work done on food reformulation by the industry, agreed more needs to be done to tackle obesity and welcomed “the report’s clear steer that everyone needs to play their part”. The report was welcomed by organisations such as The Kings Fund (TKF) and Sustain, but although it was published on the Department of Health and Social Care (DHSC) website, there was no accompanying comment from any Government Minister or official. The Labour Shadow Health Secretary, Jon Ashworth, said “the Government should heed warnings in this report and take urgent action”, adding that Labour is committed to “a ban on junk food advertising before the watershed and on extending the sugar tax”.

Assessing consumer exposure to sweeteners – EFSA consultation

The European Food Safety Authority (EFSA) is consulting on a scientific protocol for assessing consumer exposure to sweeteners, having consulted on a first draft protocol for the hazard assessment of sweeteners earlier this summer. It is also organising a meeting in December to discuss the outcome of both consultations. The deadline for submitting comments in response to this consultation is 22 November 2019. [Source: EFSA website 9 Oct. 2019]