Companies alarmed as Gove warns Brexit border checks 'inevitable'

Tom Belger
Finance and policy reporter
Signs in Calais as firms are warned they face border checks. (Aurelien Meunier/Getty Images)

A government minister has warned UK firms they will “inevitably” face new customs paperwork and border checks on trade in goods with the EU.

Business groups reacted with alarm after Michael Gove set out the new barriers facing importers and exporters, bringing an end to the current system of largely seamless trade. There are fears the changes could mean new costs and delays for firms, and even “significant disruption” to fruit and vegetable supplies in the short term.

The British Retail Consortium (BRC) urged the government to “move fast” in its preparations for when the Brexit transition period finishes at the end of the year. Trading arrangements currently remain the same as when Britain was in the EU, as the UK agreed to stay aligned with EU rules.

Gove, chancellor of the Duchy of Lancaster, said anyone importing or exporting goods to or from the EU would have to submit customs declarations forms. Different arrangements are expected be announced for trade between Northern Ireland and the rest of the UK and Ireland.

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Products could also face new checks at borders, such as health and safety checks or to ensure the right paperwork, VAT, customs or excise duties have been paid.

Firms will need to apply for a special registration number to be able to trade, and many are expected to need to hire customs agents to handle potentially complex paperwork.

The government also announced it had extended the deadline for firms to apply for funding to prepare for the customs changes, with £7.5m ($9.7m) still available.

Gove said in a speech at an event on Monday: “The UK will be outside the single market and outside the customs union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow.”

Andrew Opie, director of food and sustainability at the BRC, said: “Without the necessary infrastructure up and running from day one, consumers in the UK will see significant disruption, particularly in the availability of fresh fruit and vegetables.”

He said firms needed detailed advance information on how controls would work, “or it will be consumers who suffer on 1 January.”

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Elizabeth de Jong, UK policy director at the Freight Transport Association, also feared IT systems would not be ready for some years.

“We are naturally disappointed that the promise of frictionless trade has been replaced with a promise that trade will be as seamless as possible but not until 2025, with a more realistic but costly ‘make do and mend’ approach to be employed until then,” she said.

The European Commission’s chief Brexit negotiator had warned earlier this month there would not be “business as usual” even if Britain and the EU struck a “best-in-class” trade deal this year.

He said checks were the “automatic” consequences of Britain’s choice to leave and pursue a looser free trade deal with the EU, outside the customs union and single market. “Businesses must adapt to this reality,” he said in a speech.