The “only detectable impact” of Brexit on British businesses so far is “increased costs, paperwork and border delays”, says the chair of a prominent parliamentary committee.
Just over a year since the UK’s departure from the EU’s trading structures, the Public Accounts Committee paints a less than rosy picture of the Brexit so vaunted by Prime Minister Boris Johnson — and warns that new border controls mean further disruption is likely.
Its report on UK-EU trade was published just hours after a minor government reshuffle saw prominent pro-Brexit MP Jacob Rees-Mogg appointed to the new role of “Minister for Brexit Opportunities”.
“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,” said committee chair Dame Meg Hillier of the opposition Labour Party.
“Yet the only detectable impact so far is increased costs, paperwork and border delays.”
The post-Brexit trade deal the UK struck with the EU preserves market access for goods free of tariffs and quotas — but the UK’s decision to leave the EU’s Single Market and Customs Union has brought extra bureaucracy and costs for traders.
“It is clear that EU exit has had an impact, and that new border arrangements have added costs to business,” says the MPs’ report, acknowledging that trade volumes have also been suppressed by the coronavirus pandemic and “wider global pressures”.
The committee, which monitors public spending, warns that higher passenger numbers resulting from the recovery from the pandemic, as well as new checks at ports, bring the potential for more border disruption. Long queues of lorries approaching Dover have increased in the first few weeks of 2022.
A new EU Entry/Exit System (EES), expected to become operational in September, brings “a risk that it will take longer to process passengers travelling from the UK to the EU”, the report says. Even without Brexit however, the new automated IT system for travellers from non-EU countries would have applied to the UK as it was outside the EU’s Schengen Zone.
The UK has yet to introduce full import controls from the EU, the committee notes, adding that “much remains to be done” to ensure that traders and hauliers across the EU are ready as the controls are phased in.
The EU introduced full import controls on goods from Britain when the Brexit transition period expired at the end of 2020.
More could be done to help small and medium-sized businesses (SMEs) cope with new border costs and red tape, the MPs say. They claim that barely a third of a £20 million (€23.7 million) support fund to ease the transition was actually paid out.
Arrangements for checking goods arriving from the EU are “untested and could be exploited, increasing regulatory and fiscal risks”, the committee says, citing delays putting in place new infrastructure.
Until 2023, goods selected for checks when they come into Dover are sent nearly 100 kilometres inland. “The further the inland sites are from the ports, the greater the risk that goods could be offloaded on the way,” the report says.
Government plans to create “the most effective border in the world” by 2025 are ambitious but “optimistic, given where things stand today”, the committee says, adding that it is “not convinced” there is a “detailed plan to deliver it”.
