Two months before Brexit is due to be completed on January 1, the United Kingdom – grappling with the Covid-19 pandemic – is ill-prepared to deal with preparations for life outside the European Union, an influential think-tank said on Tuesday.
Talks on a deal before January 1 are still ongoing with Brussels, but the Institute of Government said in a new report that whether a deal will be in place or not, the scale of the task to prepare business, people and the UK government itself “is huge”.
The pandemic has already unsettled companies, who fear more closures and distress due to the second lockdown beginning Thursday, until December 2. One of the biggest impacts of Brexit will be on arrangements of trade and business, which the think-tank said is not ready.
It said: “With just eight weeks and counting until the end of the transition period, the government still has a lot to do to get Brexit done…In the four and a half years since the EU referendum, a huge amount of government time and resource has gone into preparing for life outside the EU.”
“Although the UK left the political institutions of the EU in January, very little changed in practice”, it said, adding that the UK is ready in some areas but major challenges remained.
The UK government, it said, will need to grapple with the economic consequences of Brexit; identifying which businesses will be viable in the longer term outside the single market and customs union, and which will not.
“This would be an extremely difficult task at the best of times, but has been made harder still by the devastating economic effect of the Covid crisis. With limited resources and political bandwidth, balancing its Brexit response against the ongoing demands of the pandemic and its domestic policy agenda will be difficult”, the report titled ‘Preparing Brexit: How Ready is the UK?’ said.
The Boris Johnson government decided not to extend the one-year transition period that ends of December 31. The decision, the think-tank said, had “effectively gambled” that the UK can withstand the inevitable disruption from its preferred outcome.
The report said: “The government will need to be ready to manage the impact of the transition period ending alongside coronavirus. It will need to step up its contingency plans and prepare to make difficult decisions about where to prioritise resources. Unlike its preparations for a possible no deal last year, the government will now need to do this alongside a resurgence of coronavirus”.
“This will be difficult, and the government has made its task harder still with its decision not to extend the transition period. Even if the UK civil service has the necessary resources to do so, the devolved administrations, local authorities and businesses may well be overwhelmed,” it added.