COMMENT


There’ll be tears before bedtime


Fiona Russell-Horne Editor - BMJ


I “ Jarndyce


and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. The parties to it understand it least.


” INFO PANEL


Builders Merchants Journal Datateam Business Media London Road Maidstone Kent ME15 8LY Tel: 01622 687031 Fax 01622 757646


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July 2016-June 2017: 7,419


t was never going to be as easy as they said it would be. Brexit is turning into one of those ever- lasting cases where every time someone comes up with a supposed solution, someone else decides that it’s unworkable or that they just don’t like it.


Boris Johnson’s savaging of Teresa May’s proposed Chequers Plan in the media the other week might have been another thinly veiled step on his ladder to try and take her on over the leadership. Whether that is true or not, what it certainly did was to bring out of the woodwork those who secretly and not so secretly agreed with him that the plan is unworkable.


With David Davis, the man who spent the last year or so running the department in charge of our exit, having thrown the towel in as well, in order to throw his weight behind an alternative option, it seems as though the Prime Minister is on slightly dodgy ground.


The redoubtable Robert Peston wrote that he believes the only option that EU chief negotiator Michel Barnier will countenance is Davis’s own alternative, a plan that is similar to the sort of trade agreements that Canada has. And therein lies the crux of the problem. It doesn’t matter how workable or unworkable Mrs May believes her Chequers plan is, if the other party in the negotiations is taking totally against it, then that plan is pretty dead in the water There are hundreds of trade agreements with the EU that we really need to get sorted before March. That’s next March, not the one after. Six months. That’s all.


With every day that goes by, the likelihood of getting every one of those deals negotiated, agreed


and signed off by all the parties involved gets more remote.


Which is why the behind the scenes efforts of trade organisations to mitigate the effects of a no- deal situation are such a good thing. Take the announcement by the BMF about the VAT that appears in our news pages. Should the UK leaves the EU without an agreement, Ministers have agreed that import-VAT payment may be postponed. In other words, those merchants who import materials will be able to account for import VAT on their VAT return, rather than stumping up the cash as soon as the goods arrive at ports. The concession applies to imports from the EU and non-EU countries and will make a big difference to cash-flow and material price throughout the supply chain.


Many of the major headlines about Brexit from the construction industry have been focussing on the likely difficulties of labour supply (a concern that is even affecting Premier League football clubs) and, indeed, that is a legitimate concern However, for merchants an suppliers who have been increasingly sourcing material from the EU and beyond over the last few years, any up-front VAT payments would have serious implications for price rises and profitability. Indeed, the BMF calculated that potential additional costs would be about £1 billion for European softwood; £160 million for imported bricks; and £80 million for paint from the EU. At a time when there is quite enough uncertainty about business and the construction sector, at least this is. a step in the right direction. All we need now is to get the rest of it sorted out. If we don’t, there’ll be tears.


July 2018 www.buildersmerchantsjournal.net


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