Coronavirus (COVID-19): the case for extending the Brexit transition period

Conclusions

In this document, we have set out how the COVID-19 crisis has radically altered the priorities for governments' actions, across the world. When an event as important as the COP 26 climate conference later this year has had to be cancelled - an event on which literally the future of mankind and our planet depends - it is simply not credible to treat Brexit as an exception and plough on regardless.

As we have explained, there are economic, practical and democratic reasons why the Brexit process cannot continue on its current timetable. The UK Government should immediately, and in any case by the end of June, seek the maximum two-year extension of the negotiating period, as provided for in the Withdrawal Agreement.

In Section 1, we have presented economic analysis that confirms how a failure to extend the transition will exacerbate the already huge damage caused to the economy by COVID-19. Recovery from the COVID-19 crisis should start to happen in Q4 2020/Q1 2021, but that is exactly when the risks associated with end of Brexit transition period will fall if there is no extension.

We have also explained the practical difficulties faced by the public and private sectors in the absence of an extension. The EU-UK negotiations themselves have been disrupted. The need to deploy staff to work on COVID-19 means that government readiness for the end of 2020 cannot possibly be adequate, for example in arranging new systems for customs, immigration, export certification, and intra-UK frameworks. For businesses, ending the transition period in December would require them to cope with thousands of new administrative and regulatory obligations when they are already struggling to recover from, or in some cases simply to survive, the impact of the COVID-19 pandemic. Even if they had scope to begin their preparations, it is simply not possible at this stage to prepare properly for new arrangements which have not even been negotiated yet between the UK and the EU. By the time the outcome of the negotiations is known, it will be too late. In other words, extending the Brexit transition period is absolutely essential.

We have also set out how the breathing space created by an extension should be used to review future strategy, given that the world will never look the same again as a result of the COVID-19 crisis. Nations will learn from their COVID-19 experience and revisit their strategies and business models, as will organisations in both the private and public sectors.

The UK government's 'global Britain' strategy, which did not stand up to serious scrutiny even before the COVID-19 crisis, looks even more hollow as a result of it.

We need to have a much clearer sense of the new global context before throwing away the advantages of our trade arrangements with the EU itself, and of the EU's trade agreements with other countries.

Time is running out. As the Scottish Government our responsibility, indeed our duty, is to protect Scotland's interests in the Brexit process. We are fully aware of the extent to which the UK government has staked reputational capital on exiting the transition period at the end of 2020, but there are far more important things at stake than that. This is the time for the UK government to live up to its responsibilities and do the right thing, by securing an extension to the end of 2022. We call upon it to do so.