A senior Tory minister caused outrage on Tuesday by claiming businesses have their “heads in the sand” about preparing for the end of the
Brexit transition period.
Lord Agnew’s comments were seen as the latest in a string of attempts by ministers to blame anyone but themselves for failings.
Experts do not doubt that businesses are not ready for the transition to end on December 31, with government statistics showing just 24% are prepared and Michael Gove warning of lorry queues 7,000-deep in Kent.
But they also believe it is “unfair” to blame firms as they grapple with
Coronavirus and are focused on surviving the winter rather than spending cash on things like customs agents.
Meanwhile, the government has refused to extend the transition period despite the pandemic, meaning the
UK has to prepare for a raft of new trade and border checks and requirements.
And it looks set to miss Boris Johnson’s own October 15 deadline for securing an outline trade deal - and therefore clarity on the actual rules firms will face.
Moreover ,the prime minister is trying to sell Brexit as a huge opportunity while simultaneously warning businesses they face a “nightmare” mountain of red tape.
There are also several areas where the government itself is not yet prepared, leaving businesses with many questions about what they actually need to do.
With the help of the Institute for Government (IfG), here we set out how ministers, like businesses, are not yet ready for Brexit either:Crying wolfThis is not the first time businesses have been asked to prepare for a Brexit which could end in mountains of red tape and border chaos.
They have of course been here before, when the UK was scheduled to leave on March 29 and October 31 2019.
Both times, the government ended up extending the deadline before finally leaving on January 31, which left many firms out of pocket after spending money on Brexit preparations like warehouse storage for stockpiles which ended up being useless. According to government stats, the experience has left 43% of businesses thinking the government will simply extend the deadline again - this time for the end of the transition - despite clear commitments not to.
Anand Menon, director of UK In a Changing EU, said: “There is a eral case of the boy who cried wolf about this.
“And we often forget that the boy gets eaten in the end.”No trade deal, yetPerhaps the biggest obstacle to businesses getting prepared is that they simply do not know the full terms they will be trading under come January 1.
The government is right to say that many preparations will be so-called “no regrets” actions that will apply whether there is a deal or not, because the UK is leaving the EU single market and customs union and new checks and requirements will apply whatever the deal is, or isn’t.
But there are many fiendishly complicated outstanding issues to be resolved by the trade talks - including whether firms will need to prove the origin of products they are exporting to the EU, how data law applies, what rules apply to financial services and whether visas will be needed for short-term work.
Yet talks are widely expected to drag beyond the October 15 deadline Johnson set precisely to allow time for businesses to prepare.
Border infrastructureThe most obvious physical manifestation of Brexit preparations are the 10 lorry parks the government is having to build around the country to create space for HGVs in case they get backed up on roads due to delays at border ports.
We have already seen coronavirus test centres closed to make way for lorry parks, and there are still plenty to be built.
Five sites are needed by January, and all are under construction, according to the IfG.
Meanwhile, there are also likely to be checks on trade between the UK mainland and Northern
Ireland (more on this later), but senior official Denis McMahon told the NI Assembly last month that expanded facilities for checks on agri-food will not be ready in time.Northern IrelandThere is huge uncertainty about the requirements on businesses trading between
Northern Ireland and the UK mainland.
The issues were meant to have been sorted in the withdrawal agreement (WA) Johnson signed with the EU earlier this year.
But many have not been clarified despite months of negotiation in the so-called UK-EU joint committee that was supposed to iron out the details.
It’s been further complicated by the prime minister introducing his law-breaking Internal Market Bill, which would give UK ministers the power to renege on key aspects of the WA on trade with Northern Ireland. "Yes, this [new legislation] does break international law in a very specific and limited way," says Northern Ireland Secretary Brandon LewisOn Wednesday, the government will publish new legislation on customs rules in Northern Irelandhttps://t.co/bvsv5puvijpic.twitter.com/O2j5w3fcdI—
BBC Politics (@BBCPolitics) September 8, 2020The government has also launched a trade support service to help businesses trading across the
Irish Sea with customs declarations and other paperwork, but the contract has only just been awarded and it is not clear the customs sector has capacity to be ready in time.
Businesses will also need to comply with regulations around agri-food, but the system has not been set up, according to the IfG.PersonnelA total of 50,000 customs agents are thought to be required to help businesses process all the new paperwork required because the UK is leaving the customs union.
But trade bodies like the Road Haulage Association have expressed deep concerns that nowhere near enough will be recruited and trained in time for January 1.
This is because the demand for, and therefore supply of customs agents has been low in the UK since it joined the European single market in 1975 and trade with the continent became largely seamless.ITGovernments over many years have struggled with IT, and many systems are not yet ready for January 1 - just over two months away.
Firstly, there is the Goods Vehicle Movement Service (GVMS) customs IT system, which will allow businesses to log customs declarations before moving goods to Northern Ireland from January.
There is said to be confidence that the system will be ready although testing only began last month, with plenty still to complete.
A big step up in capacity will also be required for it to be used in trade with the EU, envisaged from next July.
Meanwhile the government’s smart freight system has been spectacularly rebranded: Check an HGV is Ready to Cross the Border Service.
The government is said to be confident that it will be ready in time, but the issue is that traders need time to learn how to use it and iron out any kinks.So are businesses to blame for a lack of preparedness?The IfG’s Maddy Thimont Jack believes the government is right to recognise business preparedness as one of the biggest problems leading up to January 1.
But she questions whether ministers’ expectations are fair when many companies are focused on surviving the winter in the face of increasingly harsh Covid restrictions, and when the government has much to do itself.
Thimont Jack told HuffPost UK: “Information on what businesses need to do has been late coming – the government has only just published an updated border operating model and it still needs to test systems.
“Some details are still wrapped up in the negotiations, for example on rules of origin.
“But even where information is available, it is unfair to say that businesses have had their head in the sand.
“Like government, they have been grappling with the impact of the coronavirus pandemic – most businesses just don’t have the cashflow or bandwidth to prepare.”
Brexit expert Jill Rutter believes the government has created a fundamental problem for itself: trying to sell the benefits of Brexit while warning businesses of a mountain of red tape to come.‘Check, change, go’ sounds like what we have to do with our daughter now she’s not wearing nappies anymore. pic.twitter.com/sAJiiMd8HM— Tiernan Douieb (@TiernanDouieb) July 13, 2020She likens it to ministers “trying to present doing your tax return as the opportunity of a lifetime”.
Rutter, senior research fellow at UK In A Changing Europe, said: “The advertising campaign made it sound as if Britain’s new start was the best thing ever, that was the message you were putting out all summer.
“It was “check, change, go” - all these people staring into the middle distance at all these great opportunities - where is that giving the message about what a nightmare businesses are about to encounter.
“This has been the government’s problem all along - the big hgh level political message, which is that Brexit is worth it, it’s great, it opens all sorts of new opportunities, is completely incompatible with the message which should be ‘even if we get a deal you’re not going to believe the amount of red tape we’re about to dump on your guys’.”Related...
Minister Claims Firms Have 'Head In The Sand' Over Brexit As UK Heads For December Cliff-Edge
Brexiteer Prue Leith Gets Hammered For Urging Britons To 'Back Our Farmers'
Exclusive: Child Refugee Resettlement Plummeted After
Boris Johnson Became PM