A no deal Brexit poses significant risks to the Welsh economy and threatens the progress we have made in creating jobs and helping businesses to grow and thrive over recent years.
The Welsh Government is doing everything in our power, working with businesses and organisations across Wales, to prepare for this worst-case outcome, and protect sustainable jobs and growth.
How will business be affected?
We have been working closely with businesses of all sizes and from all sectors since the EU referendum in June 2016 to identify the key issues facing companies; the potential opportunities and challenges associated with Brexit and the areas where additional support may be needed.
The current uncertainty about the form of Brexit is extremely challenging for businesses in Wales but it’s important for firms of all sizes to act now and make sensible preparations to mitigate the risks and identify the challenges that lie ahead.
Our Business Wales Brexit Portal is the starting point for all businesses in Wales as they prepare for Brexit. It is a source of advice and guidance; helps keep business connected with Brexit-related advice and guidance and helps businesses to think about what they need to do to prepare for Brexit.
It provides up-to-date information and advice about a range of topics, including trading internationally and workforce planning. It also includes an interactive diagnostic tool for businesses can complete to measured how prepared you are.
It is vital that businesses are fully aware of appropriate preparedness actions and additional sources of support. Business Wales offers a single point of contact for businesses and entrepreneurs to advice and support from public, private and voluntary sectors. For further information visit the Brexit Portal or call 0300 060 3000.
Our Business Wales team is ready to help you and your company over the weeks and months ahead and provides a range of support to help companies prepare for key challenges, including:
- preserving existing business with the EU;
- developing new markets;
- building capacity and capability to succeed in a post-Brexit trading environment.
Many businesses are already developing contingency plans, but others have yet to start. There are more than a quarter of a million small and medium-size enterprises (SMEs) in Wales, employing almost 750,000 people with an estimated annual turnover of £46bn.
Many of these could be vulnerable to the impact of a no deal Brexit and need to take urgent steps to prepare for the challenges ahead.
The Welsh Government Business Resilience Fund has been launched to help businesses prepare for and navigate the challenges of Brexit. The fund – part of the £50m EU Transition Fund – allows businesses in Wales to bid for between £10,000 and £100,000 of Welsh Government funding, to a maximum of half the project costs, to support them as the UK prepares to leave the European Union.
To apply, businesses must:
- be registered to trade in Wales
- register with Business Wales and complete the Brexit Diagnostic Tool on application
- be able to demonstrate that the funding will contribute to safeguarding jobs
- have been trading for 12 months or more on the day of application.
The Diagnostic and Brexit scorecard app has been designed to support Welsh food and drink businesses post-Brexit. It provides real time information about the industry and helps businesses respond to the challenges and opportunities Brexit presents. It also enables businesses to review the strengths and weaknesses of their business at any time and benchmark themselves against the industry norms. A facility has been set up through our delivery agents Cywain to access this Business Readiness app. For information and updates visit the Food and Drink website.
Securing and retaining a skilled workforce will be crucial for future economic success beyond March 2019. Research has found that the quality of people in a business is the difference between success and failure – raising workforce skills is an investment in the future. Our Skills Gateway is available to help businesses improve skills and our Employability Plan is designed to mobilise all parts of government to support people into sustainable employment.
EU funding support
Wales receives £370m a year from European structural and investment funds. During the Brexit referendum campaign, voters were promised that Wales would not be worse off if the UK leaves the EU. We are continuing to press the UK Government to make good on that promise.
The UK Government has proposed setting up a UK-managed shared prosperity fund as a replacement for the EU funding which currently comes to the UK. But any replacement funding must flow directly to the Welsh Government and it must be for Wales to determine its use, just as EU funds currently come directly to Wales and Wales determines how they are used.
The Welsh Government has also been clear the UK Government must ensure that institutions and organisations in Wales can continue to engage in Horizon 2020 and other EU-led research schemes, which we have benefitted from to date.
Our participation in the Horizon 2020 and Erasmus schemes from January 2021 onwards will depend on the UK’s future economic relationship with the EU and whether the UK Government secures third country participation in these programmes on behalf of the UK.
Exports and trade
Exports are a vital part of the Welsh economy and we are committed to supporting businesses to continue to trade right across the globe after the UK leaves the EU. This is even more important if the UK leaves without a deal.
A comprehensive range of support is available through Business Wales to help firms navigate the steps needed, regardless of export experience or size of business, and meet the challenges of the post-Brexit economic environment.
We know that the issues will differ from company to company. We are making sure businesses have access to the high-quality intelligence; technical information and advice necessary to develop new export opportunities.
Our Business Wales Export Zone provides a wealth of information and advice about exporting.
The UK Government has published a technical notice about how trade in goods between the UK and the EU could change under a no deal scenario.
It includes actions businesses can take now to prepare for a no deal Brexit, such as:
- understand what the likely changes to customs and excise procedures will be to their businesses in light of this technical notice
- take account of the volume of their trade with the EU and any potential supply chain impacts such as engaging with the other businesses in the supply chain to ensure that the necessary planning is taking place at all levels
- businesses should consider the impact on their role in supply chains with EU partners. In the event that the UK and the EU does not have a Free Trade Agreement (FTA) in place in a no deal scenario, trade with the EU will be on non-preferential, World Trade Organisation terms. This means that Most Favoured Nation (MFN) tariffs and non-preferential rules of origin would apply to consignments between the UK and EU.
- if necessary, put steps in place to renegotiate commercial terms to reflect any changes in customs and excise procedures, and any new tariffs that may apply to UK-EU trade, and familiarise themselves with the key processes of importing and exporting outside of the EU
- consider how they will submit customs declarations for EU trade in a no deal scenario, including whether they should engage the services of a customs broker, freight forwarder or logistics provider to help, or alternatively secure the appropriate software and authorisations
- register to get EU Exit updates from HMRC
We are working to mitigate other potential impacts on trade in Wales, including a range of options for managing potential traffic disruption involving freight vehicles at Welsh ports, particularly Holyhead as the second busiest roll-on roll-off port in the UK, after Dover.
We are working closely with port operators, ferry operators, local authorities and the UK Government. Following these discussions, the UK Government has taken the decision to make no additional checks on goods coming through roll-on roll-off ports from EU countries in a no-deal scenario in the short-term.
Other Welsh ports, notably Fishguard and Pembroke Dock, will be included in this priority work as we support the smoothest possible flow of goods between Welsh ports and Ireland.
The Welsh Government will continue to support businesses through our expanded network of overseas operations and this support can be accessed through our Trade and Investment website. The website explains how we will help companies to capture new markets and showcase Wales as a destination for trade and investment.
We know one of the biggest concerns facing business following a no deal Brexit is that disruption to supply chains and general trading will create constraints to working capital and cash flow.
The Development Bank of Wales, launched by Welsh Government in 2017, was set up to be a potential source of financial support in such circumstances. The Development Bank’s £130m Wales Flexible Investment Fund offers business loans of up to £5m in a single round and repayment terms of up to 10 years.
Public sector procurement
We are working with the UK Government and other stakeholders to help ensure that the way the public sector procures will be largely unchanged in the event of a No Deal. Procurement rules will largely remain the same and thresholds will not change.
The main change will be that notices of new contracts will be published on a UK E-notification service instead of the European OJEU/Tenders Electronic Daily (TED). This will continue to be done via Sell2Wales, so should make very little noticeable difference to users. Sell2Wales is the free online service which helps suppliers find out about business contracts and opportunities with the Welsh public service.
Public-sector procurement after a no-deal Brexit on GOV.UK