UK delays Brexit checks as one in five business give up on EU

Saleha Riaz
·4-min read

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The UK government has delayed the introduction of full border control processes by six months to enable businesses to focus on their recovery amid the pandemic.

The development comes as a survey found that one in five directors of companies trading with the EU said they have stopped doing so in January after the Brexit trade deal was announced.

Institute of Directors (IoD) survey of 900 directors published on Thursday found around 20% of companies have halted their trade with the EU.

"The government has listened to businesses who have faced an unprecedented challenge during the pandemic and will now introduce full border control processes on 1 January 2022, six months later than originally planned," the Cabinet Office said.

It explained that this will provide businesses with more time to prepare for changes at the border and minimise disruption as the economy gradually reopens, recognising the challenges businesses have been facing in adjusting to the new requirements, at the same time as dealing with the impacts of COVID-19.

“This is a positive step as it recognises what everyone in business has known for weeks now: UK-EU trade has faced, and continues to face, significant disruption and difficulty," said Adam Marshall, director-general of the British Chambers of Commerce.

But he said this can only be a temporary solution and "what businesses want to see is an end to the damaging political rhetoric from both sides, and a focus on improving border flow for the long-term. The UK and the EU must get back around the table and thrash out the remaining structural problems in the Trade and Co-operation Agreement."

Andrew Opie, director of food & sustainability at the British Retail Consortium, said: "With many of the key Border Control posts currently little more than a hole in the ground, the six month easement comes in the nick of time."

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"We welcome the government’s decision, which will ultimately reduce the impact on consumers from 1 April, who might otherwise have seen empty shelves for some products," he said, adding that the government "must not rest on its laurels, and the next six months must be used to establish and communicate the new systems with UK retailers and EU suppliers.”

The government also said that the latest management information shows that overall freight volumes between the UK and the EU have been back to their normal levels since the start of February.

The IoD report, meanwhile, found that companies that have halted trade with the EU were narrowly split between those that indicated they had stopped trading temporarily and those who said the decision was permanent.

IoD head of policy Roger Barker said the findings “should serve as a call to action for government. While still a minority, the hit to trade with our largest and nearest market needs to be addressed to ensure it does not become a permanent dent in our global ambitions.”

Those in financial services were far more likely to be permanently stopping EU trade.

Businesses said they are clearly focused on the more immediate challenges still posed by the impact of the end of transition.

About 62% said they see no opportunities arising out of Brexit, while 23% said they do and 15% said they don't know, reflecting the degree to which the UK is still early on in the adjustment phase, the report said.

Chart: IoD
Chart: IoD

Among the 77% of IoD members who trade internationally in some form, just over a quarter indicate they have actively increased or plan to pursue more opportunities with non-EU markets in light of Brexit.

A third said they were doing this regardless of the UK’s exit, while 40% say Brexit will have no impact on their wider trade.

“Engagement with the EU to smooth and enhance our new trading arrangements is urgently needed. Now that the UK is independently sovereign, proactive cooperation on an equal footing must be the priority," said Barker.

“Business wants to see a twin-track approach to stabilising and repairing our trade with the EU, while robustly pursuing new deals with other countries that will unlock new markets and cut costs to trading with old friends," he added.

Earlier, it was reported that three in four UK manufacturers are facing export delays due to Brexit.

Make UK, the industry group for the manufacturing sector, said 74% of its members had faced delays in the past three months and many were still struggling to get goods through ports.

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