Despite the effects of the COVID-19 pandemic it is “clear that EU exit has had an impact, and that new border arrangements have added costs to business”, states a report published on Wednesday (9 February) by the UK Parliament’s Public Accounts Committee.
Since the UK left the EU’s single market on 31 December 2020, UK trade volumes have been suppressed by the impact of COVID-19 and the pandemic’s knock-on effect on economic activity.
However, the report by UK MPs warns that if cross border passenger volumes recover as expected during 2022 “there is potential for disruption at the border”. These disruptions risk being exacerbated by “further checks at ports as part of the EU’s new Entry and Exit system” and especially at ports like Dover where EU officials carry out border inspections on the UK side.
While the EU introduced customs checks on goods arriving from the UK at the end of the post Brexit transition period in January 2021, the UK government has delayed introducing its own controls on EU goods three times and now intends to introduce them in phases between January 2022 and November 2022.
Boris Johnson’s government has promised that the UK will have the “world’s most effective border by 2025”.
“One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy – even more desperately needed now on the long road to recovery from the pandemic. Yet the only detectable impact so far is increased costs, paperwork and border delays,” said Meg Hillier, the Labour MP who chairs the Public Accounts Committee in the UK Parliament.
“The PAC has repeatedly reported on Brexit preparedness and at every step there have been delays to promised deadlines. It’s time the government was honest about the problems rather than overpromising,” she added.
On Tuesday, Prime Minister Boris Johnson appointed Jacob Rees Mogg to the newly created post of Minister for Brexit Opportunities. However, the UK is set to stick to most EU regulations after the government surprisingly decided last week to scrap plans to introduce a Brexit Freedoms Bill designed to ‘reform, replace and repeal’ EU legislation.
45% of British firms reported difficulties adapting to changes in rules for buying or selling goods brought about by the UK-EU Trade and Cooperation Agreement, according to a survey published in December by the British Chambers of Commerce.
Businesses reported that the greatest new burdens were caused by extra paperwork caused by the Northern Ireland protocol, VAT requirements, customs checks and rule of origin requirements.
The cross-party committee added that it had “repeatedly raised concerns about the impact of changes to trading arrangements on businesses of all sizes and we remain concerned”.
“In our view, 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, 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.”
The new border arrangements may be further challenged when the EU introduces requirements for biometric passport checks later this year.