UK manufacturers urge government to work with EU in preventing costly border delays
British-based manufacturers, including confectionery, snacks and bakery operations, have called on the government to work with the EU to urgently resolve critical border delays caused by complex paperwork brought about by Brexit, writes Neill Barston.
According to sector trade body Make UK, a total of 60% of companies are experiencing significant disruption to either imports or exports since the start of January, with further study from the organisation noting that 61% of firms are grappling with supply chain disruption.
While the 11th hour trade deal struck between the UK and EU has avoided direct additional tariffs being placed on a broad range of goods, consumers and businesses have experienced additional costs due to rules of origin coming into effect in sales of European goods travelling to Britain, and vice versa, which had previously been swept aside as scaremongering by those behind Brexit.
The studies from Make UK found that 32% of British businesses have found a negative impact on supply chain in both directions, with companies said to be struggling to prove the UK origin of their goods in order to qualify for zero tariff access.
This was highlighted by a report featured in the UK’s Guardian newspaper, which found that sweets were among products that are set to be notably impacted by new trading arrangements – with the case of British retailer Marks & Spencer being noted in that the business buys popular Percy Pig confectionery (below) made in Germany, imported to the UK, that will in turn be re-exported to Ireland (which is still in the EU), which would make them liable for import tax.
As Make UK asserted, customs paperwork urgently needs to be simplified on both sides of the border, so it can be completed and checked quickly before haulage journeys begin and companies can be reassured that their goods have a clear run to the end customer. According to the organisation’s findings, the new systems at border controls (including a newly created lorry checkpoint at Ashford in Kent), has led to substantial delays for trucks, with many left stranded across the Continent because of incorrect paperwork.
Significantly, Make UK said that many businesses have already taken the hard decision to put a hold on importing and exporting from the EU in a hope that things improve, but this is having a serious commercial impact on companies already struggling to survive the current COVID crisis. In its view, the government should fast track the training of good quality customs agents to smooth the flow at the border. Furthermore, it believed that in tandem with this, exporters and hauliers should be encouraged by Government to work with industry to smooth out the current problems as much as possible.
Another significant concern has emerged surrounding the additional red tape is also being heaped on business as they struggle to prove origin of their goods to qualify for zero tariffs. Some companies are reportedly finding the burden of proving origin so onerous, they are choosing to pay the tariffs rather than spend the additional time and money attempting to qualify for tariff free access, with serious financial ramifications.
Speaking recently the trade deal, Ian Wright, chief executive of the UK’s Food and Drink Federation, noted that cooperation on both sides of the border would be urgently required as a result of Brexit trading complications. The organisation has warned of potential major disruption to ‘just-in-time’ logistics chains between the UK and Europe, which many businesses have expressed concern of being majorly impacted under new paperwork-heavy arrangements.
Wright said: “We welcome the prospect of a more constructive approach to enforcing new rules, on both sides of the border. We hope for a much more collaborative relationship between London and member states with the minimisation of disruption at the border due to new trade frictions introduced as a priority.”
Stephen Phipson, CEO Make UK, the manufacturers’ organisation believed that urgent action was required to solve a situation that has caused considerable concern for many UK businesses engaged with export.
He said: “Government needs to move quickly to get around the table with the EU to sort out ongoing delays at the border and Rules of Origin issues which are making business unworkable on both sides of the channel.
“We are encouraged by recent constructive contact with Government to tackle these issues and that they looking to boost the number of customs agents. But finding a way to simplify customs declarations would mitigate against delays while an agreement on cumulation between the UK and the EU would mean that parts imported from regions outside the EU and the UK – like Japan and Turkey – can be counted towards local content. This would provide a much needed boost for industry as many more goods would qualify for zero tariff access.
“The deal as it stands also fails to provide for mutual recognition of professional qualifications which will pose a very significant problem for many industries as movement of key personnel to carry out work in the EU will much more restricted. If a company wants to send a service engineer to repair a piece of equipment delivered from a UK company as part of the maintenance contract, they may not be able to carry out the service, as his/her UK qualifications won’t be recognised. There is also complex paperwork to be filled in to allow business travel.”