No-Deal Brexit Will Spark Price Increases in Everyday Household Items: Logistics UK

October 25, 2020 Updated: October 26, 2020

A no-deal Brexit will cause the prices of imported household items to jump as much as 30 percent, said a business group representing hauliers on Oct. 25.

In a letter to the Sunday Times, David Wells, chief executive of Logistics UK, wrote, “Everyday household items we import will become more expensive under World Trade Organisation (WTO) tariffs, some by 30 percent or more; and because of WTO quotas, we could see restrictions on all the products we import.”

“The cost of moving goods will increase if new vehicles, parts and tyres are subject to tariffs.”

Lorries queue at Dover
Lorries queue at the entrance of the port of Dover on the south coast of England on March 19, 2018. (Daniel Leal-Olivas/AFP/Getty Images)

“Without a deal, UK logistics operators will also be restricted by the number of lorry access permits available to enter the EU—a quarter of what we need.”

Logistics UK, previously known as the Freight Transport Association, is one of the biggest business groups in the UK. It represents businesses in logistics, including firms in the road, rail, sea, and air industries.

Britain left the European Union on Jan. 31, and the Brexit transition period will end on Dec. 31. If no trade deal with the EU is reached by then, Britain would by default need to trade under WTO rules.

British and EU flags
Union and European Union flags are flown in unison during an anti-Brexit demonstration outside the Houses of Parliament in London, UK, on June 20, 2018. (Niklas Halle’n/AFP/Getty Images)

The government launched a “Time is running out” campaign last week to tell businesses to urgently prepare for a no-deal Brexit, warning business leaders “not to get caught out” by new trading regulations.

But the necessary preparations will be costly. “Our members are preparing as fast as information becomes available, but the risk to the economy is significant,” said Wells. “Logistics businesses, operating with 2 percent margins, cannot afford to take on these increased costs.”

On Oct. 18, more than 70 British business groups representing more than 7 million workers issued an urgent call for politicians to revive the stalled Brexit talks, stressing that “securing a quick agreement matters greatly for jobs and livelihoods.”

Boris Johnson
Britain’s Prime Minister Boris Johnson gestures as he speaks during a virtual news conference on the ongoing situation with the CCP virus disease (COVID-19), at Downing Street in London, UK, on Oct. 12, 2020. (Toby Melville/Pool via Reuters)

More than three-quarters of UK firms say they need a deal quickly, they said, because UK businesses “face a hat-trick of unprecedented challenges: rebuilding from the first wave of COVID-19, dealing with the second, and uncertainty over the UK’s trading relationship with the EU.”

Prime Minister Boris Johnson said on Oct. 16 that it was time to prepare for a no-deal Brexit, as the EU had “refused to negotiate seriously.”

But Michael Gove, the Cabinet Office minister, said on Oct. 18 that the door remained “ajar” for talks on a post-Brexit trade deal to continue if the EU changed its approach.

Talks resumed last week, and the British government said on Oct. 23 there had been good progress since the restart.

Brandon Lewis, the UK’s secretary for Northern Ireland, told the BBC on Oct. 25 and there was a “good chance” of striking a deal, “but the EU need to understand it is for them to move as well.”

Mary Clark and Reuters contributed to this report.