UK Environment Secretary Michael Gove (L) listens to farmers and shepherds about Brexit at the National Centre for the Uplands at Newton Rigg College, near Keswick, on March 26, 2018 in Keswick, United Kingdom.

  • Michael Gove's environment department is set to a hold an emergency meeting with business leaders on Tuesday.
  • They will discuss emergency no-deal Brexit plans after the government confirmed last week that it does not have enough pallets - structures used to transport goods - for UK companies to export to the EU in a no-deal Brexit.
  • The extraordinary admission left affected industry leaders baffled.
  • Theresa May is under intense pressure to take no-deal off the table.

LONDON - The UK government is due to hold emergency talks with industry leaders after discovering that the country doesn't have the right pallets to continue exporting goods to the European Union if it leaves without a deal next month.

Pallets are wooden or plastic structures which companies use to transport large volumes of goods. Under strict EU rules, pallets arriving from non-member states must be heat-treated or cleaned to prevent contamination, and have specific markings to confirm they meet a series of standards.

Most pallets currently used by British exporters do not conform to the rules which non-EU countries or "third countries" adhere to, as EU member states follow a much more relaxed set of regulations.

The Department for Environment, Food and Rural Affairs last week told business leaders that the UK will not have enough EU-approved pallets for exporting to the continent if it leaves without a Withdrawal Agreement next month.

This means that UK companies would be in competition for a small number of pallets which meet EU rules, while those that missed out would be forced to wait for new pallets, which could take weeks to be ready.

DEFRA has arranged for a conference call with various figures to take place on Tuesday morning to discuss the alarming pallet shortage, with just 31 days until Brexit day on March 29.

"It is the tiny, procedural, mundane-seeming stuff that will absolutely trip people up," one industry figure briefed by Theresa May's government told BI, adding that the country was "not even remotely ready" for no-deal.

Affected industry figures who were scheduled for talks with the government said they were baffled as to why it took ministers so long to realise the dearth of pallets, given that they are such a basic feature of cross-border trade.

One business figure told BI: "The point of transition was that it provided the two years we needed to get ready. Now we are trying to get ready in a few weeks. What sort of lunatic would do that?"

They added that DEFRA Secretary Michael Gove had recently "tried to rally" other government ministers to realise the myriad problems posed by a possible no-deal scenario, with new issues arising for manufacturers on a daily basis.

The UK government has not responded to BI's request for comment.

A forklift truck moves wooden pallets at the Port of Southampton on February 10, 2019 in Southampton, England.

Senior figures in the UK's food and drink industry have warned that one-in-eight companies could go out of business if the UK leaves the EU without a Withdrawal Agreement and defaults to World Trade Organisation rules.

Best for Britain supporter Labour MP and Best For Britain supporter, Virendra Sharma MP, told BI: This is the kind of ludicrous lack of thought that has been the norm since 2016."

He added: "The people who said we'd be a global trade powerhouse after Brexit were intentionally misleading. They knew the best way to sell their twisted ideological fantasy was to talk it up without having a clue of its pitfalls.

"No deal is clearly harmful. The prime minister must take it off the table as soon as possible."

May is under intense pressure to guarantee against no-deal by extending the Article 50 negotiating period and delaying the UK's exit from the EU. Senior EU figures are reportedly considering a delay of up to 21 months.

On Wednesday, swathes of Conservatives MPs, including some Cabinet ministers, are set to vote for an amendment which would give MPs the power to force an Article 50 extension if May doesn't have an approved deal by March 13.

The prime minister on Monday said she was "focused" on leaving the EU on March 29 as planned.

"A delay in this process doesn't deliver a decision in Parliament [and] it doesn't deliver a deal," she said at a meeting of world leaders in Egypt.

"What it does is precisely what the word delay says, it just delays the point in which we come to that decision."

However, reports later in the day suggested that the prime minister was preparing to present the House of Commons with a clear opportunity to stop no-deal and delay Brexit, amid threats of mass ministerial resignations.

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