News | Published January 23 2020

Watford based business Aonyx’s no-deal Brexit preparations in 2019 to remain relevant in 2020

Prior to the original October 31 Brexit deadline, smart home installation firm Aonyx discussed some of the steps it had taken to mitigate for a no-deal departure from the EU with James Cowen of the Watford Observer. However, with a new Withdrawal Agreement in place negotiated by Boris Johnson, the UK’s leaving date set back to January 31, and much left hinging on a free-trade agreement that is yet to be negotiated, the need to mitigate may well arise once again.

Discussing how Aonyx had been preparing in-house ahead of October 31, managing director Richard Reid told the Watford Observer: “We contacted all our suppliers that provide equipment coming in from Europe and where we have had issues with them coming in. We have pre-ordered them and brought stock in early to make sure we have what we need to fulfil our orders.

“Our smaller products are affected the most which is why we have pre-ordered them ahead of October 31.

“A no-deal will be painful for three to six months as no one knows what will happen. But I believe with the products that we use and what we have done, I think we have mitigated the effects of no-deal as best as we can.”

Reid had told The Parliamentary Review that the first six months of 2019 had been among the busiest that the firm had experienced, but conceded that Brexit had affected the sector due to project slowdown and funding shortages.

Reid said: "Brexit has not directly affected our business but it has affected the sector as a whole. Projects have slowed down and funding has dried up.

“These inconsistent developments have impacts across the industry and we are trying to make sure that we are able to balance this alongside our professionalism and the standard of our work. Ironically, the first six months of this year have been some of the busiest we have ever had and although Brexit has impacted project timelines, the effect we have seen is very much stop-start in build cycles.”

The UK government is pursuing a free-trade agreement with the EU this year in order to preserve frictionless trade with the bloc. However, should such a deal not be in place by December 31 2020, the cut-off point for the Brexit transition period, then UK-EU trade would fall back on World Trade Organisation terms, essentially the equivalent of a no-deal Brexit with regards to trade.

Prime minister Boris Johnson and his cabinet are in confident mood that a deal will be in place by the end of the year, but the EU perspective differs.

During a recent visit to the UK to meet with Johnson at Downing Street, newly appointed president of the European Commission, Ursula von der Leyen, indicated that a comprehensive trade deal would be “impossible” to finalise by the end of the year.

Johnson has also insisted that the transitional period will not be extended any further, which has left the country and its businesses facing another potential cliff-edge.

Only once the UK leaves the EU on January 31 can talks regarding the future relationship commence, meaning that there is an 11-month window to secure an agreement.

Without an extension to the window, von der Leyen has hinted that one “cannot expect to agree every single aspect of our [the UK and EU’s] new partnership”.

Von der Leyen has previously expressed her hopes that the new trading relationship between the UK and the bloc would be based on "zero tariffs, zero quotas, zero dumping”, yet conceded that “without the free movement of people you cannot have the free movement of capital and services.”

In addition, von der Leyen also hinted that “the more divergence there is the more distant the partnership will be”, comments which have been given added weight this week after chancellor Sajid Javid told the Financial Times that the UK will seek to diverge from a number of EU rules after Brexit, without specifying which.

Javid said: "There will not be alignment, we will not be a ruletaker, we will not be in the single market and we will not be in the customs union - and we will do this by the end of the year.”

All of this means, therefore, that with the possibility of defaulting to WTO terms, UK firms such as Aonyx will have no choice but to make preparations associated with a no-deal Brexit once again, and that previous measures taken are likely to remain relevant throughout the course of the year. Whether the free-trade agreement that the government and EU are pursuing can be agreed before December 31 will become clearer in time. Yet, whichever way one may look at the situation, it is still a "very tight" window, in von der Leyen's words.

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Authored by

Scott Challinor
Business Editor
January 23 2020

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