Delaying Brexit border checks solves some problems but creates others

The government has announced that it will further delay the introduction of full border checks on goods imported to Great Britain from the EU, in most cases for another six months. This is a delay upon the delay, with the UK already playing catch up after initially deciding to phase in checks in three stages between January and July 2021 to allow businesses (and the government) more time to prepare for new paperwork, build additional infrastructure and update IT systems. In contrast, the EU introduced full import checks on the 1 January.

Delay will help businesses struggling to adjust to the new trading relationship. But deciding to delay, once again, risks deferring, rather than confronting, the consequences of the  Brexit deal agreed by the government.

Delay was necessary – for both business and government

The government’s reason for the delay was that “disruption caused by Covid has lasted longer and been deeper than we anticipated” and businesses needed more time to prepare. Reports also suggested that ministers were particularly concerned that poor preparation could disrupt food imports, just as the hospitality sector looked to open back up after lockdown.^[1] January's trade figures show that imports to the UK fell less than exports, in part reflecting the fact that the phased approach to border checks has meant importers have faced fewer hurdles than exporters. Imposing a host of new import checks on poorly prepared firms could have seen imports hit harder from April and July – possibly hitting the agri-food sector particularly badly. In January agri-food exports to the EU – which faced full checks – fell 65%, whereas more lightly checked imports only fell 20%.  

The move has been broadly welcomed by industry: the British Ports Association described the decision as ‘excellent news’.^[2] It is true that many firms – still coming to terms with new trade frictions and buffeted by Covid – were not ready for additional checks.

But the government’s own delays in providing support hasn’t always helped matters. A £200 million public fund to help ports build new border infrastructure was only allocated on 17 December and has been significantly over subscribed, while reluctance among ministers to be clear about the trade-offs involved in the Brexit deal – both during and after negotiations – has hindered business preparations.

The government claims its preparations were on track for the original April and July deadlines, but it will clearly benefit from the delay as well. Shane Brennan, chief executive of The Cold Chain Federation, said he ‘did not have confidence’ that systems and infrastructure needed would be in place. ^[3] Key government border sites are not complete; decisions on where facilities in Wales would be located have not even been confirmed, and construction is yet to begin. The delay also gives the government more time to stress test its new border IT systems – key to keeping lorries flowing across the border.

Buying more Brexit time is not without cost  

But the delay will not be welcomed by everyone. In his statement to MPs, Michael Gove recognised that “many in the border industry and many businesses had been investing time and energy to be ready on time”, but money has also been wasted on efforts to hit the July deadline. The UK Major Ports Group, which called the delay ‘unnecessary and disappointing’, said it was seeking urgent talks with the government about contracts signed and costs already sunk to meet the July deadline. ^[4] Frustration over the U-turn is understandable: it was only last month that a senior government official spoke of “complete certainty” over the original timeframe. ^[5]

Extending the time without full import checks also increases the risk of criticism from other international trading partners – who may feel the UK’s special treatment of EU imports falls foul of WTO rules, which require countries to treat their trading partners equally in the absence of a clear scientific justification. The government is confident that the move is legally watertight, and in any case, disputes at the WTO can take years to resolve, by which point the UK should have introduced full checks.

The new timeframe also means that British exporters will continue to face greater barriers trading into the EU than their EU counterparts have exporting to Great Britain, while the decision to delay safety and security declarations could have security implications, given the government has argued this new paperwork will help counter cross-border organised crime. ^[6]

Aspects of the delay could also store up compliance problems in future. The government had already given firms the option to defer import declarations for six months – and has now extended this to most goods imported until the end of 2021. But there are already concerns that some firms have misunderstood what this means, and some could be importing without keeping the internal records needed to comply at a later date. Extending the period during which declarations can be deferred could make this problem worse – with which could cost money in lost customs revenue. The OBR estimated that the original plans alone would have cost £200 million. ^[7]

The government must make sure extra time is not wasted

Delay is the right call now, but it should not become a habit. And the government should use the time it has created to ensure businesses continue to prepare for the new timetable. If not, it could find that it has simply put off, rather than prevented, the disruption it hopes to avoid. Over the next six months it may need to spend more to help private ports and the customs sector prepare – with lessons to be learned from earlier funding rounds to ensure that money is well-targeted and delivered in good time.

The government will need to manage expectations on two fronts. Having pushed back on its timings once, the government may find it harder to convince firms that next time is for real. And despite pitching the extension as providing more time for preparation, it is already facing calls to use the time to reopen negotiations and fix ‘structural problems’ with the deal. ^[8] 

Twice now, ministers have decided that businesses, and seemingly government, are not ready for the full force of the new import checks which are an inevitable consequence of the deal the UK negotiated. Given the real risk of disruption, the choice to delay may have been necessary. But while this government is no stranger to moving immoveable Brexit deadlines, it cannot run from them forever.