Huge sigh of relief from business to no-deal Brexit

MOST business owners across the country were relieved to wake up on the first day of the new year knowing that a no-deal Brexit was now firmly off the cards.

In light of this agreed deal, leading figures from across H&H Group reflect on the first weeks of Britain’s new trading era, offering insights into emerging trends and potential future bumps in the road.

Richard Rankin, CEO of H&H Group, is joined by Tim Sedgewick, Associate Director of H&H Land & Estates, and also Scott Donaldson, Managing Director of Harrison & Hetherington – the UKs largest livestock trader.

Following on from a tough year, adjusting to the new trading environment will be another challenge for companies to navigate as they still reel from months of lockdown.

Giving a broad view on what the implications are of this new post-Brexit reality, Richard Rankin summarised his thoughts:

“If their aim was to create drama and intrigue, then the Brexit deal is worthy of any good Netflix series and kept us hanging on until the dying seconds when all is revealed.

“It would almost be amusing if the outcome, or lack of, didn’t have such dire consequences for agriculture and farming in the UK. Fortunately, a last-minute deal was stuck, and we all get to return to our “normal” lives, blinking, rubbing our eyes and wondering where the last four years went”.

“And for the rural economies H&H serves it certainly is with an audible sigh of relief that their products will not, overnight, be made economically uncompetitive in the global market.

Whilst there are still wrinkles to iron out, the farming world can resume business as usual, with no barriers to trading in Europe imposed,” said Mr Rankin.

He added: “Looking wider than our immediate market it is also great to see us in charge of our own fishing waters, again giving us some control over the fantastic food supply that comes out of this country.

“And finally putting us back in control of our own laws outwith Europe, albeit following international law, should cut bureaucracy and red tape and, hopefully, make us more efficient and sharper as a nation”.

The main sticking point in negotiations often revolved around agricultural produce and standards, leaving UK producers with fears around no-deal tariffs.

With a perspective from within one of the leading livestock traders in the country, Scott Donaldson commented on the new context created by the finalised trade agreement:

“The fact that we are trading tariff free with Europe is a huge relief. Especially to the sheep industry in the UK, in fact all the meat processors will be glad to avoid extra trade taxes.

“Since the announcement we have not looked back, and have started the year on a high. Values are increasing on a daily basis, so much so that within the first ten days of trading into 2021, we have seen a £20 a head increase in prime sheep values, which is good news for lamb finishers. This bodes well for the short-medium term future.

“The only thing creating snags in the system are the new layers of bureaucracy and paperwork at the docks which are slowing things down. As we are traders in perishable products, we hope this will be streamlined as soon as possible.”

“Another issue arises when exporting live animals to Ireland, which will in the main be Pedigree and dairy livestock. The new trade deal puts a border in the Irish Sea, impacting the import legislation of live animals.

“This means that exporting livestock to Northern Ireland requires the same rigorous health declarations as livestock destined for the Republic of Ireland bringing additional complications.

“This will restrict the number of sheep and cattle than can be exported to Ireland and there are lots of hoops to jump through if we are going to maintain this trade. We are now working with a mandatory quarantine period, where any livestock being exported need to be isolated for 40 days prior.

“While teething issues are to be expected, what is less clear is what the Irish Sea border will mean longer-term for intra-UK trade.

“Lastly of course in addition to the new trade deal requirements, our operations have to be much more aware of biosecurity risks in relation to COVID-19 we are doing everything necessary to keep our customers and staff safe.”

Offering insights from a land and agricultural market perspective, Tim Sedgewick from H&H Land & Estates, responded:

“It is a great reassurance that a deal was reached, otherwise we would have been thrown into the unknown with possibly high tariffs on foodstuffs.

“At H&H Land & Estates we have all breathed a sigh of relief that tariffs have not been imposed, but there are still additional checks that will create more friction in our trading system.

“This means additional costs with time-consuming paperwork, customs checks, and possible delays – but at least it is not a no-deal scenario of a 48 percent levy on sheep meat exports!

“One question for us will be how these costs will be passed on. Will producers, importers, or consumers pay? We will have to wait and see how traders adjust to this new reality.

“Looking beyond the EU, Britain will soon need to be thinking about future trade deals with other countries like Australia, New Zealand and the USA.

“However, it is worth bearing mind that these nations are big agricultural exporters, meaning there will be some tough negotiations ahead for the agricultural sector in terms of quotas, standards, levies, and more.

“How these develop will impact the future farming land market, depending on whether the agri-sector is viewed as a space for opportunity or as overly competitive.

“Looking forward, the trade deal complements the Agricultural Transition Plan announced by DEFRA in the autumn last year. So, we will be getting ourselves familiar with the new schemes and will be advising clients firmly based on the facts, rather than drawing on speculation.

“The proposed Exit Support Scheme or BPS Lump Sum is due to be consulted on this spring. This is a transformative moment for farming, which looks to dovetail with the environmental agenda in terms of new priorities. However, the schemes will need to be attractive to farmers and worth doing to have any impact.”

The H&H Group is an unquoted plc with in excess of 1,000 shareholders and a heritage going back over 140 years. The H&H Group was founded originally as farmstock auctioneers and today, with nine Harrison & Hetherington Auction Marts, auctioneering is still very much a part of its business. The Group operates as a holding company with its seven successful operating companies encompassing Livestock, Machinery and Vehicle Auctioneers, Brokers and Valuers, Estate Agents, Auction Rooms, Commercial Printers in addition to Chartered Surveyors, and Insurance Brokers.