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New Brexit border checks to cost business £320mn a year

Planned new post-Brexit border controls on animal and plant products imported from the EU will cost businesses an estimated £330mn a year in additional red tape charges, the government has admitted.

The confirmation from Cabinet Office minister Baroness Lucy Neville-Rolfe in a letter to a Labour MP follows repeated warnings from the logistics and food industry that the new border checks would drive up food prices.

“It will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regimes. We estimate these new costs of the model at £330mn p.a [per annum] overall, across all EU imports,” she wrote in the letter, seen by the Financial Times.

From January European businesses exporting animal and plant products to the UK will be required to submit additional paperwork — export health certificates — with physical checks costing up to £43 a time being introduced from April 2024.

The checks are one of 20 new major policy changes between now and the end of 2024 that will impact British companies that trade internationally, according to a report last week published by the Institute of Export & International Trade.

The government has said the new border checks, which have been repeatedly delayed since the EU-UK Trade and Cooperation Agreement came into force in January 2021, will add 0.2 per cent to inflation over three years.

In her letter to Stella Creasy, the chair of the Labour Movement for Europe, the minister said that checks were required because the lack of a border since Brexit has “made it more challenging to intervene to combat threats to animal, plant and human health”.

In contrast to previous Conservative governments that have delayed introducing a border, Neville-Rolfe added that the new border was essential to protect against diseases such as African swine fever that are prevalent in parts of the EU.

“It would be dangerous to underestimate the huge costs both to lives and livelihoods that an outbreak of these diseases could cause to the UK,” she added. 

The letter cited estimates that “around half” of the £330mn annual additional cost was accounted for by export health certificates, but adds that the decision earlier this year to introduce a lighter-touch border meant that the figure represented a “saving” for business of £520mn from the original border plans.

Creasy said the controls represented additional costs for businesses as a result of Brexit, not a “saving” and urged the government to urgently rethink its approach. “British companies struggling with border paperwork to import food will have little choice over these charges meaning it’s likely British consumers will have to pick up the bill,” she said.

Labour has promised that it will seek a veterinary agreement with the EU if it wins power at the next election, which trade experts have said could reduce the levels of paperwork and border checks in both directions if it was based on sufficiently close alignment with EU rules.

But Sam Lowe, trade expert at Flint Global, said the EU and the UK would need to agree to a dynamically aligned “Swiss-style” vet deal — where the UK automatically followed EU rules and submitted to elements of EU legal oversight — in order to remove the need for export health certificates.

Veterinary groups and farmers have welcomed the introduction of the new border, arguing it will protect UK biosecurity but also create a level playing field for British exporters who have faced full EU border checks since January 1 2021.

However, trade and logistics groups said the border would drive up costs in the short, medium and long term, adding that the £330mn estimate did not represent the full costs to the industry of the last three years of Brexit uncertainty.

Shane Brennan, chief executive of the Cold Chain Federation, said: “It is a shame that it has taken so long to just admit this candidly. What is not included in this original estimate is the cost of confusion, delayed deadlines and ongoing uncertainty.” 

Peter Hardwick, trade policy adviser for the British Meat Processors Association, an industry body, added that even with the simplified certificates there would be a “massive increase” in the amount of work UK border control posts will have to do. 

“Much play is made of the physical checks being reduced and risk-based [under the revised border model], but the paperwork checks alone will slow things up,” he said.

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