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Businesses have 'head in the sand' over Brexit preparation

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·4-min read

Watch: What are the consequences of a no deal Brexit?

Businesses that trade with the EU have their “head in the sand” over Brexit, according to a government official working on preparations.

Lord Agnew, a minister of state working on Brexit preparedness at the Treasury and HMRC, said too few companies were ready for the extra paperwork necessary when Britain leaves the EU transition period.

“The bit that worries me the most is trader readiness,” Lord Agnew told MPs on the Treasury Select Committee on Tuesday. “The traders are not as ready as they should be.”

Britain is set to leave the EU transition period on 1 January 2021. Both sides are still negotiating a potential trade deal but businesses will face extra paperwork regardless of whether the UK leaves with or without a deal.

Each lorry passing through Dover must present a customs declaration for entry into France every time they cross the border, for example — something that is not required under single market rules.

Lorries line up at Frontier control barriers for departure inside the Eastern Dock of the Port of Dover is where the cross channel port is situated with ferries departing here to go to Calais in France on the 29th of September 2020, Dover, Kent, United Kingdom. Dover is the nearest port to France with just 34 kilometres (21 miles) between them. It is one of the busiest ports in the world. As well as freight container ships it is also the main port for P&O and DFDS Seaways ferries.  (photo by Andrew Aitchison / In pictures via Getty Images)
Lorries line up at Frontier control barriers for departure inside the Eastern Dock of the Port of Dover. Photo: Andrew Aitchison / In pictures via Getty Images

Lord Agnew said many businesses were taking a “head in the sand approach”, in part due to fatigue from past Brexit deadlines, COVID-19, and a recession in the UK.

“It is their businesses that are at stake from the first of January and they really must engage in a more energetic way,” Lord Agnew said.

An estimated 250,000 businesses that trade with the EU must sign up for an EORI number — an Economic Operators Registration and Identification number, which is required for all customs declarations.

READ MORE: Brexit economic disruption 'unavoidable' with the worst to come

HMRC has set up a 100-person call centre to reach businesses and Lord Agnew said “several thousand calls a week” were being made to encourage them to get an EORI number.

Around 210,000 businesses have signed up for one so far. The 40,000 companies without one are thought to be micro-businesses that are difficult to reach.

“Ultimately, the government can only do so much,” Lord Agnew said. “If businesses haven’t engaged in the process and understood the processes from the 1 January, that has to be their responsibility.

“What I’m trying to do is get businesses to wake up and realise that they have only 80 or so days left to do it.”

An aerial picture shows St Mary's Church in the foreground as construction continues at a site of a lorry park being built between the villages of Sevington and Mersham, near the M20 motorway near Ashford in Kent, south east England on October 6, 2020, which will have the capacity to hold nearly 10,000 vehicles in the event of a no-deal Brexit. - Queues of up to 7,000 heavy-goods vehicles could develop in southeast England from January if Britain leaves the European Union without a Brexit trading deal, the government forecast last month. In case of a no-deal Brexit, Britain's government is developing giant lorry parks in Kent to prevent gridlock on the road system leading in and out of London. (Photo by BEN STANSALL / AFP) (Photo by BEN STANSALL/AFP via Getty Images)
A lorry park being built between the villages of Sevington and Mersham, near the M20 motorway near Ashford in Kent, which will have the capacity to hold nearly 10,000 vehicles in the event of a no-deal Brexit. Photo: BEN STANSALL/AFP via Getty Images

The government this week launched an app that allows traders to check if they are prepared to continue trading with the EU post-Brexit. The app is “in beta” and available to just a select group of traders, Lord Agnew said, but should be rolled out more widely in the coming weeks.

Those businesses that don’t prepare could face delays at the border and fines. The government has set up lorry parks in Kent to house vehicles that don’t have the correct paperwork at the border. Lord Agnew highlighted a facility at Manston Airport, which can house up to 4,000 lorries.

“To be brutal about it, how many times is a lorry driver going to drive into Kent, take a £300 [$391] fine and then park up in Manston for 36 hours while he gets his paperwork sorted?” Lord Agnew said. “I hope to goodness they won’t do that more than once.

“That is the consequence of not being ready. You turn up, you get a fine, you get parked in a holding bay while they sort your paperwork out, there will be congestion and they might get sent home because they can’t sort the paperwork out.”

Watch: What are freeports?

Under a worst case scenarios, the UK government has said queues of up to 7,000 lorries could form at the boarder and cause delays of up to 2 days.

“What we are simply asking businesses who trade with the EU is to get ready,” Lord Agnew said.

The Institute for Fiscal Studies wrote in a report published on Tuesday: “Deal or no deal, substantial economic disruption in early 2021 is now likely unavoidable.”