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BREXIT – Meeting with The Secretary of State, and the AIC Board’s Preliminary Thoughts

11 July 2016

MEMBER BRIEFING:

This is the first of a series of communications designed to keep AIC Members informed about the rapidly evolving situation, particularly as it applies to the Agricultural Supply Industry and therefore to the future prospects for your business. Some of the concepts and possibilities we will speak of in the coming weeks and months may not happen, but others will, and to borrow a cricketing analogy, the AIC – your Confederation – is on the front foot and prepared for action. Let me start with a summary of a meeting we had with Liz Truss, Secretary of State, last week. Key points were:-

  • No decisions will be made before the new Prime Minister is elected, currently this is expected to be September 9th.
  • It will take time for her new team to agree policy. Ms Truss’s view is that “The earliest conceivable triggering of Article 50 is early 2017, so significant change will not occur before 2019. The simplest way forward would be for the UK, as a final step having concluded its exit arrangements, to repeal the European Communities Act, 1972, and replace it with a new Act of Parliament which in summary would either lift all EU law over en bloc into UK Law, or list the legislation that it was transferring. 
  • DEFRA has been asked to analyse the implications of Brexit, and the person in charge of this was at the meeting and wishes to meet with AIC “as soon as possible”. She said that highest priority will be given to issues of major economic value.
  • We told Liz Truss that AIC Members had great technical expertise and knowledge, and wished to contribute this to the planning process. She welcomed this. 

AIC BOARD DISCUSSION SUMMARY. July 6th 2016

  • Before we rush into action, it is essential to plan properly. Fundamental areas of impact need to be assessed and AIC activity agreed– even if the answers change over a period of time. These fundamentals include: 
    • What is agri-food’s priority in Brexit; Timescales; Areas of specific impact, Trade deals, Legislation, employment, Desired and/or possible governmental structure; UK versus Devolved priorities, effect on EU structure and organisations, likely collaborations; resources needed; negotiating tactics (what and how)? 
  • Our key points of contact will probably be DEFRA and its Agencies; BIS and the Food Standards Agency (and also the devolved equivalents). 
  • Our most likely courses of action will be in Coalition with like-minded organisations, focusing on specific key areas. Obvious allies will be the farming/livestock organisations, but the food industry may be even more crucial. Some actions, however, may have to be taken individually by AIC. 
  • We need to be aware that as agriculture is less important to the UK than to the EU, there is a danger of us being “traded off” in favour of the City; car industry etc. as has happened previously - often at the twelfth hour of negotiations. A key message has to be that Agriculture forms the start of the £100 Billion plus food and drink industry. 
  • Conversely, the new situation will present opportunities, and we need to be alive to these, and pre-empt whenever possible. 
  • A major issue is expected to be the need for free access to the market on the same terms as now, versus the free movement of labour. 
  • Northern Ireland: Declan Billington of Thompsons graphically described the unique challenges our Northern Ireland Members face. Any tariff impositions would disjoint patterns of trade in which raw materials, as well as finished products, may currently move several times across the border, which in future will be a UK/EU Border. 
  • Scotland: John Calder (AIC’s Scottish Chairman) outlined the particular situations as they may unfold in Scotland, where a high “remain” vote will be of huge potential significance.  
  • Priorities: Whatever the medium or long term future holds, currently we remain in the EU and will continue to be bound by existing and near-term future legislation. Therefore, even though we have a once in a generation chance to influence future UK Policy which has to be the priority, we cannot simply switch AIC resources totally out of EU Trade Associations and activities overnight. Somehow we need to address both, which will require strong prioritisation, and additional resources. 
  • Resources: The Chief Executive said that additional resources would be needed, but that his preliminary thoughts were that we should not rush to hire additional staff. Once the planning process (see first bullet point) was complete, it is likely that temporary drafting in of expertise supported possibly by some secondment of Members’ employees, was the more likely option. The Chairman commented that Members’ contributions should always be used wisely and frugally. 
  • We will need to encourage the European Trade Associations to think beyond Brexit and AIC’s future status. How will they react, for example, if other Members choose to leave? 

IMMEDIATE ACTIONS

  • See first bullet point of “Board Summary” above. 
  • AIC Sector committees need to meet in the next month to produce a list of their top 3-5 priorities to address. 
  • Take up DEFRA’s offer for immediate meeting with their Planning team. 
  • Scope out a list of possible allies/Coalition partners, and make initial contact. 
  • Engage with our European Trade Associations and others to inform them of our thinking – and future priorities. 
  • And finally: Commit to our Members that we will keep them informed as the future unfolds, and will welcome their advice, comments and questions at all times. 

THIS IS A “ONCE IN A GENERATION” OPPORTUNITY TO
INFLUENCE THE FUTURE FOR OUR MEMBERS’ BUSINESSES