The UK’s public spending watchdog has warned that UK trade volumes with the EU has been affected by Brexit and that businesses have faced higher costs, more paperwork, and border delays since Great Britain’s withdrawal from the EU’s customs union and single market at the end of 2020.
Although the Public Accounts Committee’s report noted that it was difficult to separate the effects of Brexit from those of the Covid-19 pandemic, it observed “that EU exit has had an impact, and that new border arrangements have added costs to business”.
‘Much work’
PAC committee chair, Meg Hillier, said “there is much more work that government should be doing in the short term to understand and minimise the current burden on those trading with the EU”.
In particular, the government needs to address “the immediate delivery and readiness risks in introducing import controls, and to have a border in place which is operating effectively without further delays or temporary measures”.
Summary conclusions
The 27-page report made the following recommendations and conclusions:
Exports
- Controls for the movement of goods from Great Britain to the EU have created additional costs for businesses and affected trade flows. The government must identify additional costs and opportunities to minimise them
Imports
- Full controls on imports from the EU are being introduced in phases across 2022. However, with these controls already delayed three times last year, the PAC committee wants the government to clarify its systems and infrastructure plans, plus the new charging regime at government-owned inland sites
- On compliance, the government should provide an assessment of the fiscal and regulatory risks for imports from EU-GB and set out how it will minimise any potential gaps in the temporary arrangements it intends to operate until all its planned permanent infrastructure is in place
- Although readiness among UK hauliers, logistics companies and traders for controls has improved, more needs to be done to improve the lower level of readiness among those across the EU
- Despite the provision of support for SMEs, more could be done to ensure they are prepared to face the additional costs and administration caused by new border requirements
Northern Ireland Protocol
- The government should continue its efforts to resolve the challenges and ensure that departments are ready to put any negotiated outcome into operation, as well as contingencies if an agreement cannot be reached
2025 border strategy
- PAC questioned the readiness of the UK government’s overall plan to have the ‘world’s most effective border by 2025’, particularly in relation to IT delivery. It wants to see a timetable for the planned programme of work and the key risks it will need to manage
Passenger movements
- The new border arrangements have yet to be tested with normal passenger volumes and may be further challenged when the EU introduces biometric passport checks this summer. The government must set out its planning and modelling for passenger volumes in 2022 and clarify how it will manage them
Long border delays at peak times are becoming the norm for hauliers the Guardian reports, quoting Rod McKenzie, executive director for policy and public affairs for the Road Haulage Association that post-Brexit border checks “mean friction where none existed”.
The introduction of biometric controls at the border this summer could lead to more problems, according to Logistics UK.
Sarah Laouadi, the organisation’s head of European policy, said the forthcoming Entry/Exit System (EES) could see ports could “grind to a halt”, with independent modelling projected queues of up to 29 miles, reports the FT.
According to Politics.co.uk, PAC said that cross border passenger volumes have been at a fraction of normal levels because of Covid, and recovery in 2022 could see “potential for disruption at the border”, especially at ports like Dover where EU officials carry out border checks on the UK side.
Slow recovery
UK exports have been slow to return to pre-Covid levels, according to Reuters, which says it took until November 2021 to see its goods exports surpass their 2018 average level, making Britain the last G7 nation to recover
Meanwhile, a government reshuffle has seen Jacob Rees-Mogg assume the position of minister for Brexit opportunities, reports the BBC.