Samantha Washington: Now, let's return now to the warnings from the Business Secretary, Greg Clark, that a no deal Brexit will see thousands of jobs lost in the UK. Well, for more on this, let's speak now to David Lowe, he's Head of International Trade at the law firm, Gowling WLG. Welcome to you, Mr Lowe.
David Lowe: Good morning.
Samantha: The favourite candidate for the next job of Prime Minister says that the financial risks of no deal Brexit are 'vanishingly small' and yet the Business Secretary says it's 'thousands of jobs', what's your view?
David: Well, I think it's obvious, it's thousands of jobs, if you create barriers to trading with the biggest partner that we have, of course there's going to be job losses! I think this would all be a lot clearer if the Brexit people were saying, 'We can go off, the sun can rise on the 1st November and life will be better but we will be poorer', that would be true. I think it would be a much more honest discussion if that was the basis on which we were having this discussion.
Samantha: What do you make of all the discussion about WTO terms and the assumption that Article 24 of GATT means that we could, theoretically, have zero tariff trade in that scenario?
David: Well, there's nothing to stop us deciding that we'll have zero tariff imports on our own but we have to offer that to the whole world, so that might be something the government might do on the 1st November, after a no deal Brexit, but that doesn't mean that the EU would offer us zero percent trade on import tariff, this GATT XXIV discussion, I think the only person whose given that any credibility has been Boris Johnson, I think every other expert in that field has said that's not true!
Samantha: Because it requires agreement, doesn't it …
David: Exactly.
Samantha: … from our trading partners and we can't bank on much?
David: Indeed, exactly, so we have to face up to a hard Brexit, or a no deal Brexit means there will then be a hard border and that means there will be tariffs, there will be delays on the border and it's not just tariffs and delays of the transport, it's all the documentation you suddenly start needing, which will also cause delay and admin costs for businesses, it will become harder and, therefore, if you're a business that relies on that, like automotive, food, aerospace, which are the ones that were mentioned this morning, it will have a negative impact on you.
Samantha: Yeah, you quite rightly mentioned those industries and they are the ones that are talked about a lot, particularly those with the 'just in time' supply chains and they also employ many, many people in the country but we are primarily a service based economy, aren't we, what about for services?
David: Well, of course, yeah, one of our biggest service industries is the Financial Services sector, you you know, a massive tax take for the country, but coming out of the European Union puts a massive barrier on them trading across the European Union, so, yes, this just creates barriers wherever you go.
Samantha: I suppose part of what is worrying some people about no deal is that with no deal there is by definition no transition, do you think that with a transition period we could respond very well, what do you think, how important is that transition period?
David: A transition period is essential for business. At the moment, most businesses don't know what's going to happen and, therefore, aren't planning to do anything on the 31st October. If we knew, in six or 12 months' time there will be a hard Brexit, a no deal Brexit, at least businesses can get ready and make sure that we don't have the shock that will happen, so that will make it less risky, less damaging but it will still be damaging.
Samantha: You say there 'most businesses are not doing anything', I mean, the Bank of England survey suggests that actually the majority of them feel that they have prepared as much as they can, are you saying that because they don't know what they're preparing for, that preparation is potentially as good as useless?
David: It's not quite useless. I think where we are now is much better than a year ago, where I think most businesses hadn't really given much serious thought at all to the impact and I think most decent businesses have at least thought about it, identified where the issues are, worked out contingency plans, so we are in a better place but that doesn't stop in the hard deal, or no deal, Brexit suddenly there being port delays at Dover, they will happen even if people have routed stuff elsewhere. So there is a limit to what people can do and a big problem is end of October is the build up to the Christmas season, so anyone who has their peak business period in that period, such as retailers, are already stocked up, ready for Christmas, as it is, without being able to hold further stocks, so actually you've heard Tesco and Sainsburys, I think, saying that it's about the worst time of the year to have an exit from the European Union.
Samantha : Yeah, indeed, I mean, we saw the problems with warehousing when we had the original date postponed, didn't we? As a lawyer, what, briefly, if you can on this, what is your general advice to your clients when they're preparing for one of very many different scenarios?
David: It's just, 'Work out where your trade-flows are', many businesses, a year ago, hadn't really done that at all, it's really important you know where the problems are going to be, so that you're not surprised by them, I think that's the key aspect. Many businesses don't look very far down their supply chains and so can't see the pinch points, it's really important you do that, so you're not surprised.
Samantha: Alright, David, very good to talk to you, thank you for your time on Sky News.
David: Thank you.