- The UK Department for Environment, Food, and Rural Affairs is set to hold an "emergency" meeting with business leaders on Tuesday.
- They are expected to 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 European Union in a no-deal Brexit.
- The extraordinary acknowledgment left affected industry leaders baffled.
- Government sources denied that it was an emergency meeting.
- Labour criticised the "incompetency and lack of forward planning."
- Prime Minister Theresa May is under intense pressure to stop the UK from leaving the EU without a deal next month.
LONDON - The UK government is due to hold emergency talks with industry leaders on Tuesday 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.
Under strict EU rules, pallets - wooden structures that companies use to transport large volumes of goods - arriving from non-member states are required to meet a series of checks and standards.
Wood pallets must be heat-treated or cleaned to prevent contamination and the spread of pests, and have specific markings to confirm that they are legal in EU markets.
Most pallets that British exporters are using do not conform to these rules for non-EU countries, or "third countries," 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 would not have enough EU-approved pallets for exporting to the continent if it leaves without a withdrawal agreement next month.
That means UK companies would be competing for a small number of pallets which meet EU rules, and those that miss out would be forced to wait for new pallets which could take weeks to be ready.
DEFRA arranged for a conference call to take place on Tuesday morning to discuss the pallet shortage, with 31 days until Brexit day on March 29. Attendees described it as an "emergency" meeting.
A DEFRA source insisted that it was not an emergency. "These are official led discussions with key representatives from the food and drink industry, building on the weekly meetings we have held for some time," they told BI.
"It is the tiny, procedural, mundane-seeming stuff that will absolutely trip people up," one industry figure briefed by Prime Minister Theresa May's government told Business Insider, adding that the country was "not even remotely ready" for a no-deal Brexit.
Affected industry figures who were scheduled for talks with the government said they were baffled about why it took ministers so long to learn of the dearth of pallets, given that they are a basic feature of cross-border trade.
"The point of transition was that it provided the two years we needed to get ready," one business figure told Business Insider. "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 acknowledge the myriad problems posed by a possible no-deal scenario, with new issues arising for manufacturers on a daily basis.
Labour's shadow DEFRA secretary, Sue Hayman, urged May to "take a disastrous no-deal off the table."
"Everything about this government's handling of Brexit has been a shambles, so this news sadly comes as no surprise," Hayman said. "The level of incompetency and lack of forward planning demonstrated by government has created risk and uncertainty for some of the UK's largest manufacturing sectors, including the food, drinks, and chemicals industries."
A DEFRA representative said the government would seek a reciprocal arrangement on pallets with the EU.
"We have been meeting weekly with representatives from the food and drink industry for many months to help prepare for all scenarios as we leave the EU," they said.
"As part of those meetings we have discussed a range of issues relating to the import and export of our goods, including pallets. We have already committed to retaining our current pallet import approaches post-exit, and we hope the EU will confirm that it will reciprocate our commitment."
Senior figures in the UK's food and drink industry have said 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 Organization rules.
Virendra Sharma, a Labour MP who supports the anti-Brexit "Best For Britain" campaign, told Business Insider that "this is the kind of ludicrous lack of thought that has been the norm since 2016."
"The people who said we'd be a global trade powerhouse after Brexit were intentionally misleading," he said. "They knew the best way to sell their twisted ideological fantasy was to talk it up without having a clue of its pitfalls."
Sharma added: "No-deal is clearly harmful. The prime minister must take it off the table as soon as possible."
May is under intense pressure to prevent a no-deal Brexit by extending the Article 50 negotiating period.
The prime minister on Tuesday announced that MPs would have the chance to vote for an Article 50 extension in mid-March if she didn't have a Brexit deal approved by Parliament.
Swathes of Conservatives MPs, including some Cabinet ministers, had threatened to resign if the prime minister didn't make an explicit commitment to giving the House of Commons a vote on delaying Brexit.