Nine months on from the end of the Brexit transition period, the government has, once again, delayed the introduction of full checks on EU imports to Great Britain. With the government concerned that new checks will exacerbate current supply chain problems, ministers can say that the decision has kept imports moving and eased the strain on supply chains, as well as arguing that the UK has taken back control of its border.

However, delay only postpones the inevitable disruption that full import checks means for the UK’s trade with the EU – and the government’s decision only gives the impression that it is ducking the difficult economic consequences of Lord Frost’s Brexit deal.

It is unsurprising that the government has delayed checks again

With most customs controls still due to be introduced from January, and the government confident that traders – and key HMRC IT systems – are on track, this delay is focused on the more onerous requirements for imports of animal and plant products. Most requirements – including export health certificates and physical checks at border control posts – are now set to be introduced in July, rather than January.

Ministers blamed Covid [1] and it is true that some firms – particularly EU businesses exporting to Great Britain – are unprepared. Supply chains are also under strain from a range of factors, including Covid shutdowns and a shortage of EU labour under the UK’s post-Brexit immigration policy. With pressure only set to increase in the run up to Christmas, business groups such as the CBI [2], Cold Chain Federation [3] and British Chambers of Commerce [4] have begrudgingly welcomed the delay, accepting that it will relieve pressure on firms that are already struggling to keep the shelves full.  

But it is far from clear that the government was prepared the introduction of new checks either, with key border infrastructure still at the planning stage and reports of shortage of veterinary or port health staff to implement full controls. [5]

Delays on border checks must not go on forever

While excuses can be made for the latest delays, kicking the can down the road is not a long-term solution. Ever-moving deadlines send a message to firms that full checks may never come, stymying preparations and creating more disruption when (or if) full controls are eventually introduced. Businesses that have invested millions in preparing for checks are angry, with the Food and Drink Federation arguing that the latest delay “undermines trust and confidence among businesses”. Its CEO Ian Wright told a recent IfG event that many firms have already hired staff that would now be “surplus to requirements” and that “most members who have done the preparation would prefer those who haven’t aren’t rewarded”.

The delay also risks embedding a competitive advantage for EU firms over their British counterparts. While businesses sending goods from Great Britain to the EU have had to comply with full EU import controls since the start of the year, their EU competitors can send goods to Great Britain without the same bureaucracy and paperwork. The Food and Drink Federation argue that this asymmetry partly explains why UK exports of food and drink to the EU were down 27% in the first half of this year, compared to the same period in 2019. [6] Having refused to extend the Brexit transition period last spring, the government has effectively done just that at the border, albeit in a way that favours EU imports over UK exports.

It is also not clear how long the government can continue to treat EU imports more preferably than those from the rest of the world, without inviting a legal challenge under WTO rules.

Repeated delays undermine government commitment to ‘taking back control’ of the border

When checks were last delayed I argued that the government should use the extra time ensure that it and businesses prepared properly. But even preparation doesn’t mean that businesses, especially smaller ones, will be able to sustain the higher costs of full import controls. Business groups such as the CBI have called on the government to revisit its trade deal with the EU and negotiate a veterinary agreement that would streamline some health checks and lessen the burden on firms – with the added bonus of helping to resolve some of the most difficult outstanding problems with the Northern Ireland Protocol. But the government argues that this threatens the UK’s regulatory freedom and ability to strike free trade deals around the world.

This border purgatory is unsustainable. It robs firms of the certainty they need to plan, creates an unlevel playing field for traders and damages the government’s relationship with business. When the latest deadlines arrive, the government will need to make good on its promise to introduce controls, or come clean that it does not want to do so.  

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  1. https://questions-statements.parliament.uk/written-statements/detail/2021-09-14/hcws285
  2. https://www.cbi.org.uk/media-centre/articles/our-response-to-new-border-control-delays/
  3. https://twitter.com/ColdChainShane/status/1437746408052994049
  4. https://www.britishchambers.org.uk/news/2021/09/bcc-welcomes-delay-to-import-checks-but-says-much-more-work-is-needed
  5. https://www.reuters.com/world/uk/britain-delays-implementation-post-brexit-trade-controls-2021-09-14/
  6. https://www.fdf.org.uk/globalassets/resources/publications/reports/exports-reports/exports-snapshot-h1-2021.pdf

 

Original source – The Institute for Government

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