Boris Johnson’s officials are urgently working to avert a major border crisis when the U.K. leaves the European Union’s trade regime, amid warnings vital government IT systems may not be ready in time.
According to a leaked document, ministers are asking hauliers and other industry groups for help to avoid chaos at the border when the Brexit transition period expires at the end of the year.
But with just four months to go, the government’s preparations still have “critical gaps” while some parts of blueprint are “unmanageable,” the document said.
The warnings are contained in a government official’s note of a meeting with representatives of the logistics industry, who set out their grave concerns over the dangers ahead.
The memo, circulated by the Cabinet Office’s Border and Protocol Delivery Group, lists 13 key risks to be flagged to ministers, including a lack of contingency planning in case things go wrong, and inadequate time to prepare. High on the list of concerns were the proliferation of new IT systems and the fact some of these are still being developed with just four months until they’re needed.
“There are up to 10 new systems that haulage firms and freight forwarders will have to navigate from Jan. 1, including at least three being designed now,” the memo said. “This is completely unnecessary and unmanageable with duplication and overlap.”
In a sign that Michael Gove, the minister responsible for the U.K.’s Brexit preparations, is growing increasingly worried about the threat of border disruption, his team is setting up meetings with logistics experts to address the issues raised by the industry.
On Wednesday, the Road Haulage Association and other lobby groups wrote to Gove seeking an urgent round-table not just with him, but with Chancellor of the Exchequer Rishi Sunak and Transport Secretary Grant Shapps to press their concerns.
“We have visibility of the current state of preparedness which as it stands has significant gaps,” the trade groups wrote. “If these issues are not addressed, disruption to U.K. business and the supply chain that we all rely so heavily on will be severely disrupted.”
A U.K official acknowledged there are problems raised by the industry that need to be solved. In a statement, the Cabinet Office said it has worked closely with the the sector to develop its plans and will continue to do so. The government also said it is spending more on infrastructure and training intermediaries needed to handle the hundreds of millions of extra customs declarations that are expected to be required each year.
“This is the latest example of Tory incompetence and raises real concerns about the risk of border chaos in four months’ time,” said Rachel Reeves, the Labour Party’s shadow minister for the Cabinet Office. “Four years on from the referendum and there is still an absence of the details and solutions which many firms need.”
The possibility of border trade disruption threatens to become a winter crisis for the prime minister, as he tries to negotiate a new trade accord with the EU. Whether or not the U.K. manages to strike a free-trade agreement with the bloc, from Jan. 1 it will have to apply customs controls on goods moving to the EU, which accounts for about half of all Britain’s imports and exports. With the government ruling out any delay to the U.K.’s departure, the pressure to find a solution is building.
As many as 10,000 trucks a day pass through ports such as Dover, delivering goods ranging from fresh food to medicines and automotive parts. About four-fifths of the food imported by U.K. supermarkets comes from the EU, according to the British Retail Consortium.
Delays in processing the paperwork needed after Brexit could throw those supply chains into chaos, threatening traffic jams at ports and heaping more economic damage on a country still reeling from the coronavirus.
“The fact that the whole system, the whole flow of our trade through the border, is based on the functioning of some IT systems that are yet to be built is a huge risk,” said Shane Brennan, chief executive officer of the Cold Chain Federation, which represents specialists in moving frozen and chilled goods. “My biggest worry is that there isn’t a proper awareness out there in the industry about how precarious things are.”
Officials worry that trucks traveling to the EU from the U.K. will arrive at ports without key documents such as customs declarations and will be held up or turned away by EU border staff. This would disrupt the circular flow of freight, with traffic jams on one side of the border discouraging hauliers from making deliveries, threatening supplies of fresh produce and roiling factories relying on parts arriving just-in-time.
The U.K.’s proposed solution is the so-called Smart Freight System, a web portal that will allow truckers to check whether they have the documents required to enter the EU, and grant them a permit to proceed to a port. If they attempt to drive to a dock without that chit, hauliers will be fined 300 pounds ($402). The government is also building dedicated lorry parks to process trucks without the right paperwork to avoid major traffic jams on roads, and this week granted itself more powers to start construction across England.
The freight industry warned the design of the SFS needs to be finalized as soon as possible and companies need to be given enough time to train their staff.
“This growing shambles raises many questions,” said Naomi Smith, chief executive officer of Best for Britain, a lobby group which campaigned for the U.K. to remain in the EU. “If this is not sorted, and sorted promptly, we face food and medicine supply interruptions, and Britain will be set for an extremely bleak midwinter.”
The memo also includes a warning of the situation in Northern Ireland which, unlike the rest of the U.K., will effectively remain in the EU’s customs union after Dec. 31. The government is yet to set out detailed plans for companies trading with the province from next year.
“The lack of an Operating Model for the Northern Ireland Protocol, coupled with missing information on the location of inland checking points and even which systems particular ports will be using, needs to be addressed now,” the memo says.
The Cabinet office said it is setting up a trader support service which will help companies fill in any new forms required.
(Updates with further details, reaction from eleventh paragraph.)
For more articles like this, please visit us at bloomberg.com
©2020 Bloomberg L.P.