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New checks at the British border for EU imports were scheduled to be implemented on 1 July 2022, but have been delayed for the fourth time, putting a strain on British businesses’ trust in the government to implement Brexit.
Instead, the government has stated an intent to implement the delayed checks at the end of 2023, in line with its plans for a new digitized border control strategy.
The minister for Brexit opportunities, Jacob Rees-Mogg, has announced that the delay was agreed in businesses’ best interests as the cost-of-living crisis and sky-high inflation rates threaten smaller importers’ recovery.
He explained, “Today’s decision will allow British businesses to focus on their recovery from the pandemic, navigate global supply chain issues and ensure that new costs are not passed on to consumers.
“It’s vital that we have the right import controls regime in place, so we’ll now be working with industry to review these remaining controls so that they best suit the UK’s own interests.
“We want the process for importing goods from the EU to be safe, secure and efficient and we want to harness innovative new technologies to streamline processes and reduce frictions. It’s precisely because of Brexit that we’re able to build this UK-focussed system.
“The UK Government is committed to ensuring the process for importing goods remains safe, secure and efficient and will harness innovative new technologies to streamline future processes and reduce frictions.”
Dominic Goudie, head of international trade at the Food & Drink Federation (FDF), said the move brought “welcome clarity” because supply chains were already facing “significant” disruption due to the long-lasting effects of Covid and the war in Ukraine.
Similarly, William Bain, head of trade policy at the British Chamber of Commerce, believes it was a sensible move from the government. “With food prices rising, the extra costs from new checks on meat, fish, dairy and other products would fuel inflation – hitting the pockets of both business and the British public.”
Retailers were ready
The next target deadline for these checks to be imposed is now the end of 2023, with a promise that the measures implemented then will underpin the UK’s “world best border on our shore” as part of its 2025 Borders Strategy.
Ian Worth, customs director at Crowe, argues the further delays could negatively impact some small businesses as he explains, “The repeated failure to implement controls delivers nothing more than an erosion of confidence from businesses who have been led down a very costly garden path too many times already.
“For some UK importers, [the delay] may be welcome news and could offer some relief from the spiralling cost of living increases impacting them. Other businesses, however, have spent considerable time and money in preparing for these changes, which had already been pushed back three times.”
This is something the British Retail Consortium is also conscious of, as Andrew Opie, director for food and sustainability, explains. “Retailers have been working with their European suppliers for many months to help prepare them for the incoming border checks in July.
“The staggered introduction of checks proposed was workable, provided UK ports were ready, and exporting suppliers received the support needed to complete the required checks. While any delay is welcomed by retailers, given the added costs to the supply chain and the level of friction anticipated, the postponement of border checks will only prolong the inevitable.
“Retailers are ultimately ready for the implementation of checks in July and recognise that July is the most opportune time to introduce these checks, as fresh and perishable food imports are at the lowest.”
Exports are growing
On the other side of the coin, the FDF has reported that food and drink exports across the UK are recovering from the challenges of the pandemic with manufacturers taking advantage of new trading relationships across the world.
The FDF’s UK Food and Drinks Exports report shows that Scotland, Wales, the West Midlands and the North East of England had the strongest export growth, reflecting encouraging recovery from the supply chain problems caused by Covid and that businesses are adapting to the new UK-EU trading relationship. This growth is an important sign that the food and drink industry can play a vital role in post-Covid recovery for the entire country.
Karen Betts, chief executive at the FDF, commented, “It’s very encouraging to see exports starting to recover across many parts of the UK, with companies starting to pull out of COVID-related disruption and adapting to the UK’s new trading relationships with countries around the world. Every product we export is rooted in our culture and our communities, and it’s great to see that our food and drink is sought out by consumers all over the world.
“Our report also shows the vital role that food and drink manufacturing plays in every community across the UK’s four nations, and how central our sector is to prosperity at home as well as in driving exports overseas.”
Mike Freer, the UK minister for exports, added, “It’s brilliant to see food and drink companies from every corner of the UK selling their products to the world, growing our economy and supporting jobs across the country.
The report stated that the share of exports to non-EU markets is increasing, with strong growth in London, as companies take advantage of the opportunities to increase exports through the UK Government’s new global trade deals.
However, more can be done to improve the implementation of the UK-EU trade agreement, to help companies recover exports in the EU alongside growing market share in other global markets.