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UK firms not ready for Brexit transition as fears of border chaos grow

Tom Belger
·Finance and policy reporter
·4-min read
A line of lorries is seen during a trial between disused Manston Airport and the Port of Dover of how road will cope in case of a "no-deal" Brexit, Kent, Britain January 7, 2019. REUTERS/Toby Melville
Cabinet Office minister Michael Gove acknowledged border queues of up to 7,000 trucks are possible in a 'reasonable worst-case scenario.' Photo: Toby Melville/Reuters

Britain’s businesses have “significant unanswered questions” about the end of the Brexit transition period, while around half of firms have done nothing to prepare, according to a new survey.

The British Chambers of Commerce (BCC) is warning firms report having “little cash or information to plan” for the impact of significant changes in UK-EU trade from the end of the year.

With informal UK-EU trade talks ongoing but Downing Street itself warning time is running out to strike a deal, the government is now under mounting pressure over likely disruption.

Cabinet Office minister Michael Gove acknowledged border queues of up to 7,000 trucks are possible in a “reasonable worst-case scenario,” while firms have warned government systems and customs preparations are not ready.

Meanwhile the Road Haulage Association claimed plans announced on Wednesday for a new Kent Access Permit for hauliers to enter the county en route to the border were “pointless and probably counter-productive.”

READ MORE: No-deal Brexit would hit UK ‘three times as hard’ as COVID-19

The BCC is now urging the UK government to be “honest” with firms about the complexity of the new rules, and to issue stronger warnings that businesses need to prepare.

The business lobby group has published a list of the 35 key questions asked by member firms, alongside its own summary of official guidance. The BCC says only partial answers are available from government for 19 questions, and there is too little information to act at all for a further seven questions.

Key problems include:

  • A lack of official guidance on potential new “rules of origin” requirements for exporting to the EU and elsewhere, which specify how products must be made and declared to qualify for lower tariffs. This prevents firms from planning, and could create “unprecedented new administration and costs.”

  • “Very limited guidance” on the movement of goods from Great Britain to Northern Ireland, and “no clarity” on how food and drink for sale in the EU and Northern Ireland will be labelled.

  • “No information” or consultation on the Shared Prosperity Fund promised by the UK government, which will replace EU structural funds used on economic development projects across Britain.

A new survey by the BCC suggests just 38% of firms have completed a Brexit risk assessment, and only around half have taken any of the government’s eight recommended steps to prepare for changes.

The lobby group says firms are already struggling to cope with the coronavirus crisis, suffering from weak demand, ongoing government curbs and sustained cashflow problems.

Business chiefs also highlight “deadline fatigue” after several Brexit trade cliff-edges that were eventually delayed over the past two years.

“With just 98 days to go, business communities face the triple threat of a resurgent coronavirus, receding government support schemes, and a disorderly end to the transition period,” said BCC director general Adam Marshall.

“Significant unanswered questions remain for businesses, and despite recent public information campaigns, base levels of preparedness are low. Many firms say they've heard talk of deadlines and cliff edges before, and others are still grappling with fundamental challenges as a result of the pandemic and have little cash or information with which to plan.

READ MORE: UK factories demand Brexit deal and furlough extension as output falls

“The ‘Check, Change, Go’ campaign gives the impression that Brexit-related changes are like getting an MOT — whereas the reality is that for many businesses, they’re more akin to planning a moon landing.”

Labour’s shadow business secretary Ed Miliband backed calls for more support for firms. “The government promised an oven-ready deal, but their incompetence is plain to see,” he told PA.

“They must stop prevaricating, focus on getting the deal they promised and giving businesses the answers they need, and ensure all preparations are in place for the end of the transition period.”

But a Cabinet Office spokesman said: “With fewer than 100 days to go it’s vital that we all prepare for new rules that will come into force at the end of the year.

“Over the coming weeks we will be intensifying our engagement with Business Representative Organisations like the British Chambers of Commerce and their members, so that they can hit the ground running on 1 January 2021 and seize new opportunities.

“To help businesses get ready, we have launched a major communications campaign in the UK and EU, committed to investing £705m ($898.6m) in jobs, infrastructure and technology at the border and provided a £84m support package to boost the capacity of the customs intermediary sector.”