A needless act of self-harm: An insider’s view of a no deal Brexit

Sajjad Karim speaks with disbelief in his voice as he gives his assessment of Brexit and the growing feeling in many quarters that the UK is heading for the EU exit door without a deal.

A solicitor by profession and with 15 years in Brussels representing the North West in the European Parliament, he is used to choosing his words carefully.

However, sitting in the quiet sanctuary of his home in the rural Ribble Valley, he pulls no punches in his belief that the UK is in danger of an act of what he sees as needless self-harm.

That Britain is even thinking of a no-deal scenario fills him with horror. And he paints a grim picture of what might happen in areas such as transport, energy supply and the banking system.

The cost and the time that will have to be spent to cope with the disruptive consequences will be “huge” he says.

Large amounts of cash and resources will have to be thrown at problems “just to stand still” instead of being used to move the economy forward and solve some of the many pressing issues the country is struggling with.

He says: “I’m not being defeatist, I’m being realistic. If we leave the EU in an orderly and managed way, with an agreed transition period in place, and we are able to hold our own union of the UK together, we will get through this.

“If, however, we leave in a disruptive way, then that is going to place pressure on the union. And if that breaks at some stage that really is game over.”

If the union of the UK breaks at some stage that really is game over.

Sajjad speaks with the air of an insider – not just in the corridors of power in Brussels and Strasbourg, but in the inner workings of the Conservative Party. He talks of how he tried to persuade the leadership not to go down the road of a referendum.

The 49-year-old former Pendle councillor was the legal affairs spokesman for the Conservative Group in the European Parliament and a member of its legal affairs committee.

In 2013 Sajjad led in the European Parliament’s drive to improve regulation by giving a greater say to member-state legislatures. To put it simply he knows how the EU thinks.

He says: “There needs to be a free trade agreement between the EU and the UK, the issue is how long that will take. We were told it was going to be the easiest deal in history; it is going to be anything but.

What we have to remember is that this is not Europe kicking the UK out; it is a UK decision to leave the EU. People need to understand the EU’s perspective.

We were told it was going to be the easiest deal in history; it is going to be anything but.

Blaming Europe is unhelpful in terms of the future. Whether we stay or leave, we need to have a good relationship with our European neighbours.”

He talks of a “drip-drip” effect of what he describes as more than 40 years of misinformation about the EU. And he adds: “If you are making very important, fundamental decisions based on misinformation then the chances are you are going to miscalculate, and that is what has happened here.

We have got ourselves in a situation that we don’t know how to get out of.

We are speaking before the leaking of the Operation Yellowhammer report on the immediate consequences of the UK leaving without a deal on October 31. Much of what he says mirrors that report.

He talks of disruption at ports, with the time it takes for a lorry to move through the system at a minimum of two minutes and some vehicles facing delays of anything up to 12 hours. Even two minutes will have a “huge” impact, he adds.

Sajjad has seen first-hand how EU-supplied technology on the Georgia and Armenian border cut the time it takes trucks to move between the neighbouring countries from 12 hours to two minutes.

He says: “That helped trade flow. We would be going in the opposite direction. There would be a build-up of traffic and delays. Quite how bad that will be is a matter of debate, only time will tell.”

The pressure will be on the transportation of perishable goods. Supply chains will also feel the heat, as will Lancashire businesses exporting to Europe, he adds.

Even in areas where the EU and UK have worked together to put in temporary deals – such as aviation - there will still be scope for disruption. Planes may fly but it won’t be business as usual, Sajjad warns.

He believes the reality is airlines will work to get around the problems a no deal would bring; however, it means more cost and more time spent on finding the solutions.

The picture is the same when it comes to power supplies and making sure energy imports continue to flow. Contracts will have to be renegotiated, he says, with a sticking point deciding which country’s law is going to apply to them.

Do you want to leave without a deal or remain? They are the only two shows in town.

At present the European Court of Justice is the final point of arbitration, and as Sajjad points out that could well cross a UK red line. “It is going to be anything but straightforward,” he adds.

He talks of compensation payments as a result of the renegotiations, and the huge management exercise needed.

Banking is another area of concern if Britain leaves without a deal, with the need to bring in new regulations quickly and the possibility of emergency measures and even the rationing of cash at ATMs.

“This is just crazy,” he adds. He doesn’t believe that there will be runs on banks or that people will be left unable to move money in and out of the country. Solutions will be found.

But he adds: “The fact we have to think about things like this is madness for a country like ours. It is a huge exercise, again just to make sure we are standing still.

“Even if all this leads to a temporary blip, how long will that blip last? The disruption of supplies will put pressure on prices and we will see certain things going up.”

So what does this vocal ‘remainer’ think needs to be done to avoid the scenario that he paints? He urges Lancashire business owners to talk to their Westminster representatives and share with their MP views on how a no deal may affect them. “People need to make their voice heard,” he adds.

And he also talks of the need for a further referendum, with the question ‘do you want to leave without a deal or not?’ “If the answer is not, you are effectively deciding to remain, they are the only two shows in town,” he adds.

Taking a risk assessment

The potential impact of Brexit remains at the forefront of business planning for Lancashire SMEs in all sectors.

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Lancashire Business View’s Hot 100 research, looking at the county’s most profitable SMEs, revealed that more than a third of them referenced either Brexit or exchange risks in their 2018 annual reports.

Mark Schofield, director of Haworths Chartered Accountants, who carried out the research to compile the list said: We noticed many companies repeatedly referenced Brexit as a major risk for their business going forward, with food-based businesses being particularly vulnerable.

Our research revealed that 23 of the businesses that made the Hot 100 this year referenced Brexit, with an additional 13 highlighting currency exchange risks.

The Institute of Directors (IoD) is among business organisations warning of the uncertainty of a no-deal exit from the EU.

Its interim director general Edwin Morgan has called for financial support for SMEs to prepare for and adjust to Brexit.

Looking towards a global Britain

Ribble Valley MP Nigel Evans is in no doubt what Brexit will mean. He talks of a global Britain and declares We want to deal with countries all over the world.

Those deals include the EU as well as the USA. The vocal Tory Brexit supporter says: “Donald Trump has already said that he wants to do a great deal with the UK, that is going to be three, four five times bigger than the trade we are currently doing with them.

“At the moment we have a £50bn surplus with the USA. By the way, that’s a £95bn deficit with the EU, so it really does make sense for them to do a trade deal with us.

He also echoes the words of the Prime Minister in calling for a full removal of the Irish backstop from any withdrawal deal.

Boris Johnson wrote to the President of the European Council, Donald Tusk, last month outlining his government’s commitment to securing a new deal before October 31 but one that removes the controversial measure.

Nigel says: The Withdrawal Agreement drawn up by the previous PM was rejected three times on the very basis of the Irish Backstop; it is undemocratic and threatens the Good Friday Agreement.

“As a sovereign nation we can leave any institution we wish, whether that be the EU, NATO or the UN, but by agreeing to the Irish backstop we would be entering something from which we could not unilaterally leave.

This causes major problems for our sovereignty and would effectively ensure that Brussels continues to have a tight grip over the UK.

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