Brexit trade slump: Gov should cut burden on traders before full border arrives
The government needs to cut the burden on traders at the UK-EU border to ease a post-Brexit trade slump, a report from the National Audit Office (NAO) has said today.
While the Government’s handling of the new border with the EU was “largely successful”, it has relied on temporary measures that are “not sustainable”, the UK’s audit watchdog added revealing that the UK has spent £1bn on border management.
Queues backlogged at the border emerged in January this year amid a raft of new import controls that followed the end of the Brexit-transition period and the winding impacts of the pandemic.
Supply chains naturally slowed as businesses adapted to the freshly imposed EU import controls, administrative costs and leaving the bloc’s single market.
Trade between the UK and the EU plunged 23 per cent in the first quarter of the year but recovered slightly in the second quarter in comparison with the last few months of 2020.
However, trade still amounted to 13 per cent less than in 2020’s final quarter and in the second quarter of 2021 trade with the EU stood at £17bn below 2018 levels.
“We recognise the significant achievement of government, departments and third parties in delivering the initial operating capability needed at the border for the end of the transition period,” NAO boss Gareth Davies said.
“However, this was done in part by using interim measures and by delaying the introduction of full import controls. Much more work is needed to put in place a model for the border that reduces the risk of non-compliance with international trading rules, does not require any temporary fixes, and is less complicated and burdensome for border users.”
The Government has delayed the introduction of full import controls three times, with firm’s now awaiting the period between January and July 2022 for the new measures to be put into force.
Though the decision to postpone the import controls has eased some of the pressure traders have been faced with amid the transition – the NAO said there is a significant risk that firms will still be underprepared.
On the Northern Ireland Protocol, the NAO said the situation was “inherently challenging” and called on the Government to implement any deal reached with the EU on changing the protocol “quickly”.
In terms of what the Government should tackle soon – the NAO concluded that preparedness from traders and hauliers needs to be addressed, as well as supporting their adaptation and streamlining border processes accordingly.