Photo: AFP / 10 Downing Street / Andrew Parsons

Prime Minister Boris Johnson says he won't delay Britain's final parting with the European Union at the end of the year. Empty meeting rooms across Whitehall suggest delay is all but inevitable.

Business lobbyists say government officials have cancelled most meetings to prepare for Brexit as civil servants are pulled away to deal with the growing coronavirus pandemic. It's now only a question of how Johnson will sell a delay to the British public, rather than whether or not one will happen, they say.

"There's absolutely no bandwidth for anything other than Covid-19," said Pauline Bastidon, head of European policy at the Freight Transport Association, who said her meetings to discuss issues including a shortage of customs agents were postponed. "There's no time, energy, money or interest at the moment to focus on Brexit."

Even so, Johnson has continued to rule out giving the country more time to negotiate and prepare for its future relationship with the European Union. Companies reeling from the virus are worried that means they will face a second economic shock at the end of 2020, when the 11-month post-Brexit transition period ends.

Lobbyists say they anticipate Johnson will make a decision about an extension closer to June, the cut-off date in law for agreeing a delay with the EU, once the impact of coronavirus on the economy has become clearer. Then they expect he will look to a strictly time-limited extension to match the time lost to the virus.

The Cabinet Office, which is leading Britain's Brexit preparations, didn't respond to a request for comment.

"Everyone is hoping for an extension," said Helen Brocklebank, chief executive officer of Walpole, which represents the UK's luxury sector. "Brexit is very much taking a back seat at the moment as companies fight to survive."

Britain is aiming for a limited free-trade agreement with the EU, akin to the bloc's deal with Canada, which would reduce tariffs on goods but create costly new non-tariff barriers like extra customs paperwork and red tape. If no agreement is reached, the two sides will trade on punitive World Trade Organization terms, which would include steep tariffs on products like cars, meat and dairy.

Lack of time

The worry for both Britain and the EU is that companies on both sides of the border don't adequately prepare for the end of the frictionless trade with the bloc, leading to problems like border queues and supply chain disruption. The EU is Britain's largest individual trading partner, taking about half of its exports.

The chief Brexit negotiators for the UK and EU have both been self-isolating and some trade talks were postponed as the pandemic grew. Continuous discussions are now happening by phone, rather than the set rounds which were previously envisaged, a UK government spokesman said on Monday.

"Brexit planning has fallen off a cliff," said Peter Hardwick, a trade policy adviser at the British Meat Processors Association. "All operational staff at the Department for Environment, Food and Rural Affairs have been diverted to Covid-19 work."

One of the biggest issues in Brexit planning is a lack of time and information to build new infrastructure at ports to handle border checks on UK-EU trade, plus prepare complex new IT systems, said Bob Sanguinetti, chief executive officer of the UK Chamber of Shipping.

"Those were huge projects for UK government before the coronavirus pandemic," Sanguinetti said. "Day by day, its increasingly difficult to see how the original time-lines can be achieved."

©2020 Bloomberg L.P.

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