Leaver or remainer — and let’s face it, it’s irrelevant now — it’s hard to dispute that elements of the UK’s departure from the European Union haven’t fared well upon contact with political or business realities.
And so it remains. The government is considering a fourth delay to imposing full import checks on products coming from the EU — which were supposed to come into effect on July 1 — the most problematic of which are inspections of food.
On the one hand, this would be a pragmatic move when war in Ukraine has stretched supply chains to breaking point. Politically (and sensibly), Downing Street is determined to avoid shortages on shelves or exacerbating the cost of living crisis.
But make no mistake: this issue, as they say, is a feature not a bug.
Two years ago, the government was insistent that full checks were essential, to keep “our borders safe and secure” and to “ensure we treat all partners equally” in trade.
Now, not so much. Concerns about changes are real: past introductions of less intrusive controls came with six to eight weeks of disruption mitigated only by a feather-light touch to enforcement. There may also be a bandwidth issue: “the government isn’t ready for any of this stuff”, is the verdict from one person involved.
The backdrop is renewed focus on trade. Chancellor Rishi Sunak this week conceded that the UK’s weak trading performance “might well be” related to Brexit. Where the trade intensity of other countries’ economic output has rebounded after the pandemic, the UK’s has not.
What’s really going on isn’t entirely straightforward. Exports have been weak. But goods going to the EU, subject to full checks since January 2021, haven’t underperformed exports to the rest of the world, notes Thomas Sampson at the London School of Economics. Imports from the EU, with less onerous procedures, have suffered more.
One possible explanation is, frankly, EU businesses have other options and don’t fancy sucking up the cost and hassle of UK checks. UK exporters currently don’t have a level playing field in terms of trade bureaucracy, nor do they have a big, friction-free market to which to pivot their sales.
There is, though, a particular problem in food. Within the headline figures, so-called groupage shipments, bundling together small volumes from different suppliers, have collapsed, says Shane Brennan from the Cold Chain Federation. You can’t impose third-party trade checks, including physical inspections and veterinary certificates, on to an integrated food supply chain without disruption, he argues. It just doesn’t work.
As ever when trying to square the Brexit circle, there are no obvious good answers. Some multinationals and port operators, having invested and hired staff, would rather take the pain and get on with it.
Others, including it seems the food and agriculture department, want checks in place but see scope to minimise disruption by exempting lower-risk categories from inspection, and dialling down the frequency elsewhere. The question then is whether that amounts to a phased introduction, or a redesign of the UK system on the fly.
Others are calling for a longer-term delay. Post-hoc rationalisations — such as Brexit negotiator Lord Frost’s suggestion that the freedom to limit border checks was all part of the plan — should be treated with suspicion.
Of course the EU food standards regime is a known and trusted quantity. (The fact that they run such a very tight ship is part of the problem when it comes to the flow of goods from Great Britain to Northern Ireland). But the effective outsourcing of food safety to Europe would be an odd outcome and one that only flies politically until there is any hint of a scandal.
Similarly, the idea that border digitisation will alleviate all this in 2025 is, at best, premature. Ditching paper forms, and consolidating processes into a single point of contact, would be a win.
But you can’t magic away the need for physical checks on meat and dairy, say. Unless, that is, you strike a deal with the EU on food and hygiene standards, which is a no-no for Brexit hardliners. Or you fundamentally overhaul how we enforce food safety, shifting to a ‘trusted trader’ scheme with officials in-country inspecting and monitoring standards at source.
All of which suggests an outcome based on well-known British pastimes and produce: can-kicking or fudge.
helen.thomas@ft.com
@helentbiz
Source: Economy - ft.com
