Just as everyone thought the final stages of Brexit were finally upon us, another postponement threatens to throw any progress off once more.
The first tranche of border checks on incoming EU goods as part of the government’s Border Target Operating Model (TOM) were due to roll out in October, after being delayed five times over the past two years.
But a recent Financial Times report suggests the deadline is being pushed back to January next year amid fears the financial toll of the requirements on traders – including costly vet-signed health certificates – would fuel inflation and push up grocery prices.
The fact Brexit red tape brings added costs across the supply chain, which are inevitably passed to the consumer, is not news. A recent London School of Economics study found Brexit had pushed up household bills by an average £250 a year.
But this latest postponement would be “the clearest ‘public’ admission thus far from the government that Brexit is making our lives more expensive”, EU deli goods importer Kamil Shah told The Grocer this week.
Many have taken the government’s silence on the matter as confirmation of the reports, and the delay has largely been welcomed by industry, which has been sounding the alarm over Brexit costs and unviability of the tight timeline for months.
The decision allows businesses and port authorities much-needed extra time to prepare, says Fresh Produce Consortium CEO Nigel Jenney, not least because ministers have not yet even signed off on a final version of the border strategy.
According to a recent Cold Chain Federation survey, 39% of EU food producing companies that supply goods to the UK were not even aware of the new rules and timeframes proposed by the UK earlier this year.
The British government is “also not ready” CCF CEO Shane Brennan argues. “Three months out they still don’t have the final version of the operating rules, IT systems have still not been fully tested, and the awareness levels among affected businesses in the EU are alarmingly low.”
Timeline changes
The October health certification requirements are now expected to come into place at the same time as physical checks, which Brennan thinks will be fairer despite the pressure it will inflict on the UK’s ports.
“This is how the EU brought in the rules on 1 Jan 2021 - it risks some hold-ups but at least it is fair,” he says, arguing the two-stage model “would have meant some businesses could just ignore the rules for at least a further three months” because of a lack of real enforcement at the border.
“There was no obvious way that a business that either didn’t comply at all, or only complied partially, would be prevented from entering the border”, Brennan points out, which would be unfair to those that made every effort to understand the rules and invested money in being fully compliant.
The post-January regime will be better at catching non-compliant businesses, he says, because there will be a more stringent enforcement of all requirements once designated border control posts for post-Brexit checks start working then.
Christmas disruption
The postponement also avoids major disruption during the Christmas trading period, Brennan says. “There is no amount of preparation that will prevent these rule changes causing harm to the supply chain and so it’s better to wait until at least after the Christmas trading window to bring in economically harmful measures.”
However, there is an argument the decision is unfair to British exporters, as it continues to give a free pass to continental rivals, while they have had to endure checks on all fresh food exports to the bloc for the past two years.
“We appreciate the need to protect consumers from rising food prices, but it is vital we introduce proportionate, light-touch checks on all our food imports that keep costs for importers to a minimum while properly managing biosecurity risks,” NFU director of trade Nick von Westenholz told the FT.
Farmers’ Union of Wales president Ian Rickman says: “We should not be in a situation where we are limping from extension to extension because of a lack of planning and foresight by the UK government, while UK businesses are suffering unfair competition as a result.”
Some industry sources are sceptical that the TOM will be implemented by the current government at all. “If the Tories fail to bring this in before the election, then it is a live issue that Labour has to deal with,” one noted. In that case, Labour would be obliged to follow through with its promise to negotiate a veterinary agreement with the EU that could significantly reduce red tape and border friction both ways. “That is not guaranteed by any stretch, but it is possible,” according to the source.
Waiting game
The uncertainty is resulting in “lots of frustration” for traders, according to the FPC’s Jenney. “Many of our businesses have invested huge amounts of time and money to prepare for the requirements,” he says, including in IT, people resources and training.
The final list of products directly affected by the checks is also yet to be published. Without specific guidance, companies are struggling to adjust their procedures in preparation.
“Any delay just perpetuates the uncertainty businesses have been facing for years now over this and this stops them from planning effectively,” says Rod Addy, director general at the Provision Trade Federation.
A government spokesperson said: “The government remains committed to delivering the best border in the world. We are reflecting on the valuable feedback provided by a range of businesses and industry stakeholders and will publish the Border Target Operating Model shortly.”
Meanwhile, traders want clarity. “The UK government’s credibility with our industry and traders in Europe is at an all-time low,” says Jenney. “They fail to advise correct information and then there are delays all the time.
“We don’t want to keep arguing border checks. We just want to develop an efficient border to be able to expand our international trade capabilities.”
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