Collapse Of Trade With EU To Continue ‘Into Summer’

Industry groups have warned the collapse of the UK’s trade with the EU will continue into the summer following the failure to recruit as many as 30,000 customs agents, despite government assurances that normal service has resumed.

Delays and confusion at Britain’s ports, resulting in 40pc of lorries crossing the Channel with empty containers, threatens to put hundreds of small and medium exporters at risk of going bust and cost the Government millions of pounds in lost trade tariffs. The warnings follow the largest monthly fall in exports from the UK to the EU since records began 20 years ago.

Exports collapsed by around 41pc as thousands of lorries were unable to gain entry to the EU, mostly as a result of customs delays caused by a lack of suitable paperwork. Additionally, businesses have reported that the shortage of customs agents means they are unable to fulfil orders from customers based in the EU or find their goods returned at huge cost to themselves.

In January, the first month of trading since the UK left the EU on terms agreed by the Conservative Government, official data revealed that the export of goods to the 27-member bloc fell by an astonishing £5.6bn, at the same time as imports fell by around 30pc, or £

Michael Gove, the Cabinet Minister, delayed a previously agreed time table for imports, in response to critics of the UK’s failure to prepare for border checks. Under a new scheme, controls on animal product imports will be postponed from April to October and checks on the majority of other goods will occur only at UK ports from next January.

However, Brussels has demanded that UK exporters comply with EU rules on imports, which will require many British firms to employ a customs agent and a vet to certify that animal products are safe to enter the EU.

30,000 more customs agents needed

Richard Burnett, CEO of the Road Haulage Association (RHA), said the sheer volume of exporters needing help to complete paperwork means customs agents are turning work away. The delay to import checks, he said, although welcome, is not a universal fix, and the organisation cannot be confident that operators will even be ready on 1 October. This is because the number of experienced customs agents and vets across the EU still falls far short of what is required.

Richard Ballantyne, head of the British Ports Association (BPA), said most ports had seen an increase in shipments over recent weeks, although the delay to import checks had kicked the problem into the long grass rather than resolved it.

Rod Mckenzie, the RHA head of public affairs, said shipment numbers failed to show the full impact of new Brexit-related red tape at UK borders, with 40pc of containers travelling empty to the EU. The recruitment of customs agents, he said, needed to increase by 30,000 to around 50,000 to cope with the extra regulations, adding that delays and loss of exports would continue until more customs agents were trained, causing trading problems until the summer at least.

Small and medium businesses are likely to be hardest hit by the shortage of agents who play a vital role in handling the flood of new paperwork being imposed on firms that wish to continue to trade in Europe.

‘Exporter support scheme’ urged for traders

Alex Altmann, partner of accountants Blick Rothenberg and head of the firm’s Brexit advisory group, said while there is no quick fix to this problem, what is needed is an ‘exporter support scheme’ to help British companies.

Although ministers have asked local chambers of commerce to train new customs agents, the process is said to be hampered by a lack of information and training for chamber staff to pass on.

Altmann pointed out that the low pay afforded to customs agents meant recruitment was difficult. Extending the customs easements at the UK border, he added, until the end of 2021, amounts to a confession by the Government that the border operating model is not working.

A spokesperson for HMRC said the Government has made over £80m available to support the customs intermediary sector to deal with EU trade. The grant scheme was designed to be flexible, to increase capacity as firms see fit, whether this involves recruitment, training or purchase of new IT systems.

The British Chambers of Commerce (BCC) has told ministers the difficulties faced by businesses on the ground ‘go well beyond just teething problems’ and disruption to UK-EU trade flows had persisted into March.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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