Logistics UK is warning of the potential economic impact which a No Deal Brexit could have on the fortunes of Britain.
Negotiations between Britain and the European trading bloc are entering a crucial phase, with tensions surrounding fishing rights being thrust centre stage despite that industry’s small scale compared to the manufacturing sector, which is heavily reliant on reliable supply chains.
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In a letter to UK newspaper, Sunday Times, Logistics CEO, David Wells highlights a No Deal exit from the EU could have a significant effect on the price of all imported goods and could drive inflation up as a result.
“Everyday household items we import will become more expensive under World Trade Organisation tariffs,” wrote Wells. “Some by 30% or more. This will make the household shopping basket much more expensive, particularly in the early part of 2021 when we rely on imports for much of our fresh food.
“The actual cost of moving goods will also increase if new vehicles, parts and tyres are also subject to tariffs. This is more than ‘turbulence,’ as suggested by Mr [Michael] Gove last week, and logistics businesses, operating on 2% margins, cannot afford to take on these costs.”
Another concern for logistics operators will be obtaining access to the EU market if the talks remain unresolved, as without a deal, UK logistics operators will also be restricted by the number of lorry access permits available to enter the EU, maintains the logistics association.
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By GlobalData“The permit quota available to UK operators will fall short by a factor of four, putting businesses at risk right across the country,” added Wells. “We are urging government to keep pressing for a deal with Brussels, to protect not only our industry but the economy as a whole.”
Logistics UK (formerly FTA), represents logistics businesses, which are vital to keeping the UK trading and more than 7m people directly employed in the making, selling and moving of goods.
Logistics UK has members from the road, rail, sea and air industries, as well as buyers of freight services such as retailers and manufacturers, whose businesses depend on the efficient movement of goods.
