Advertisement

  1. ITV Report

Card payment hikes and pension fears as Dominic Raab outlines no-deal Brexit contingency plans

  • Video report by ITV News Political Correspondent Libby Wiener

Holiday-makers and Brits abroad could face millions of pounds in surprise credit and debit card charges in the event of a no-deal Brexit, it has emerged.

Those are just some of the revelations that have come from the raft of documents released by the government outlining preparations for what happens if Britain crashes out of the European Union without a deal.

Brexit Secretary Dominic Raab, in a speech timed to coincide with the release of the first tranche of technical notes, vowed the papers will ensure a “smooth, continued, functioning” of the UK economy in the event of a no-deal scenario.

But the documents make for troubling reading, despite government assurances that the basis of its no-deal planning is "stability for citizens, consumers and businesses" because they suggest things will become more expensive and more complicated.

Unsurprisingly there has been a furious reaction to the papers, including from Welsh First Minister Carwyn Jones and Best for Britain champion David Lammy MP.

  • ITV News Political Correspondent Libby Wiener questions Dominic Raab over no-deal:

Sorry, this content isn't available on your device.

What do the papers tell us about a no-deal scenario?

If the government is unable to reach a trade agreement that covers financial services, one paper warns, UK consumers will face increased costs and slower processing times for Euro transactions.

Worryingly for Brits living abroad, expats could lose access to their pensions in a no-deal scenario.

For businesses, there will be greater red tape. The EU and Britain will need to treat each other as third countries, with the same customs and excise rules applied to goods traded with the EU as those traded with nations outside the bloc.

Exporting business are advised they may need to hire customs brokers and more freight and cargo workers.

One of the papers outlines an entire new framework for medicine regulation and drugs licencing, with companies having to submit regulatory information, including on e-cigarettes, directly to the Medicines and Healthcare Products Regulatory Agency.

Products would have to undergo national assessment before receiving market authorisation to be sold in the UK, possibly delaying access for patients to innovative treatments.

The guidance states that "unnecessary complexity" will be avoided by following existing processes.

Another paper, outlining tax arrangements post Brexit, reveals that without an agreement, parcels arriving in the UK would no longer be liable for relief on VAT.

In a no-deal scenario the UK will no longer be covered by a cross-border surcharge ban Credit: PA

The technical notes - there will eventually be 80 in total - are contingency planning for a no-deal scenario, but they offer an insight into some of the difficulties that accompany extricating the country from the EU.

For example, the papers explain there would need to be new regulation for tobacco products - including taking new photographs for the warning on cigarette packets, because the European Commission owns the copyright to the images that are on them now.

In short, the papers suggest that under no-deal:

  • UK Customers face increased costs and slower processing times for Euro transactions
  • The cost of card payments between the UK and the EU will likely increase
  • UK citizens living in the EU “may lose the ability” to access their pensions
  • UK businesses will need to hire more staff, specifically customs brokers and freight forwarders
  • Customs declarations will be needed for all imports and exports with the EU
  • New regulations will be needed for tobacco products, including new pictures of the warnings carried on cigarette packets
  • New regulations will be needed on the importing and exporting of human tissue
  • A new framework will be needed on the regulation of medicines
  • EU funding for some UK projects will come to an end
  • The UK will no longer be a member of Euratom
The technical notes are 'contingency planning' for a no-deal Brexit Credit: PA

What will the government do in a no-deal scenario?

To mitigate the expected problems that accompany no-deal, the government will immediately adopt EU rules on labelling for food and other goods.

And, in the hope of avoiding chaos at port terminals, it will throw open the borders "unilaterally" to all but high-risk goods.

The government will also guarantee EU grants and CAP payments until 2020.

Sorry, this content isn't available on your device.

There are already 6,400 civil servants in Whitehall working on Brexit, but a no-deal scenario will be mean more work for the public sector.

Defra, the Department for Environment, Food and Rural Affairs, has hired 1,300 new staff this year, while the Border Force are hiring 300 new staff with 1,000 more to come.

Customs declarations will be needed for all imports and exports Credit: PA

What have people said about the no-deal plans?

Labour's Shadow Brexit Secretary Keir Starmer told ITV News that a no-deal Brexit would be "catastrophic", and criticised Mr Raab's comments as "vague".

"What the government was really saying [in the documents released today] is that, in the event of no deal, we'll just have to keep on talking to the EU to find a way forward.

"And in many ways that underlines the point that [Labour] have been making all along, which is that no deal is not viable."

Welsh First Minister Carwyn Jones described the government's plans as a bluff that was "fooling no-one", adding that "the writing is on the wall".

“No-deal would be a catastrophic failure of the UK government that would cause huge disruption and serious, long-lasting economic and social damage to all parts of the UK," he said.

“No-deal is not an option and the UK Government’s bluff is fooling no-one.”

David Lammy said the papers showed Conservatives were 'playing Russian roulette with our economy' Credit: PA

Best for Britain champion David Lammy said the papers showed Conservatives were "playing Russian roulette with our economy".

He said: "Dominic Raab’s papers are nothing more than a cynical ploy to make whatever pathetic deal the government brings back from Brussels look less terrible in comparison.

"Today shows that no matter how you voted in 2016, you need a say on the final Brexit deal. No-one voted for this disaster."

TUC general secretary Frances O’Grady said the reports confirmed no-deal Brexit was not a credible option.

"It would be devastating for working people,” she said. “The government cannot allow us to crash out. The Prime Minister must throw out her red lines, face down the extremists in her party, and negotiate a deal that works for the whole of the UK."