London, UK: The main impact of Brexit on UK firms has been “increased costs, paperwork and border delays,” according to the Public Accounts Committee
But it warns things could worsen this year as new import controls come in. The Public Accounts Committee said it was concerned about what will happen when passenger traffic across the UK border returns to normal levels as the pandemic subsides.
The report says trade volumes have been suppressed by the impact of Covid-19, and wider global pressures in supply chains, since the UK left the EU customs union and single market.
But it is clear, the report adds, that leaving the EU will also increase the bureaucratic burden on businesses. “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 the chair Meg Hillier.
“Yet the only detectable impact so far is increased costs, paperwork and border delays.” There is potential for further disruption during the course of this year as more people start travelling again, and passenger volumes at key ports like Dover increase.
New border systems have yet to be tested with traffic back at what were normal levels, before the pandemic struck. There is also a significant risk of more delays later this year when the EU introduces biometric passport controls under its new Entry and Exit System.
The Cabinet Office told the committee that discussions are underway with French officials about how this might work in practice at busy ports like Dover, where – says the report – “it is important that checks that apply to HGV drivers do not delay the throughput of lorries”.
Another big test identified by the committee will be the phased introduction of controls on imports into the UK, which began on 1 January. Physical checks on the import of food products are due to begin in July, and the British Port Authority told the PAC it needs greater clarity about the precise arrangements, including the percentage of products which will be checked.
The MPs also raised concern about the potential for smuggling before new border infrastructure is completed close to Dover. Lorries arriving at the port will have to travel 60 miles to Ebbsfleet, if their consignments need to be physically checked by customs officers. That increases the risk, the committee warns, that goods could be offloaded on the way. HM Revenue and Customs has said it will look at what surveillance might be necessary to manage that risk.
But there is a lot more the committee wants done. And it is calling for more transparency from government about the problems businesses are facing. Meg Hillier says the committee has repeatedly reported on Brexit preparedness, and there have been delays to promised deadlines at every stage. “It’s time the government was honest about the problems rather than overpromising,” she said.
In particular, the committee wants the government to do more to help small firms prepare for the extra burdens they are having to deal with, and to consider further support. It says only £6.7m of the £20m offered under the SME Brexit Support Fund was paid out, because narrowly defined criteria meant many businesses missed out on funding.
