Up to a dozen inland customs centres similar to the controversial planned lorry park in Ashford, Kent, are to be built to deal with the expected additional bureaucracy at ports caused by Brexit, it has been revealed.
The plans emerged as it was confirmed that the UK government expects businesses to complete an additional 400 million import and export customs declarations as a result of Brexit, at a cost previously estimated by HM Revenue and Customs at anything up to £20 billion a year.
Long-awaited details of the new operating processes for the UK’s borders were finally released by the Cabinet Office less than six months before they are due to come into force at the end of the year, amid warnings from business that many firms will not be able to prepare for them in time.
The Brexit bureaucracy burden will be imposed whether or not Boris Johnson succeeds in reaching a free trade agreement (FTA) with Brussels by the end of 2020 - though if he crashes the country out without a deal there will be additional costs from tariffs on European goods and checks on the origin of UK exports.
The CBI said that securing an FTA remains “paramount” as the majority of firms are “less prepared than ever” for a trading cliff-edge at a time when many are struggling to keep from going under due to the cost of the coronavirus crisis.
“A good deal is the only way to minimise the impact,” said CBI deputy director-general Josh Hardie. “Many small firms will not be able to prepare for new border processes, restrictions and added bureaucracy while trying to keep their business from going under.
“So progress towards an ambitious deal is paramount at a time when every job and every pound of investment is precious. As negotiators focus on the detail of a new deal, compromise and common sense is required from both sides to get an outcome which minimises disruption and protects livelihoods during this precarious time.”
And Conservative former cabinet minister Stephen Dorrell, now chair of the European Movement, said: “Last November Boris Johnson said that there would be ‘no forms, no checks, no barriers of any kind’. Today, the grim reality is laid bare.
“When the prime minister said ‘no forms’ he meant to say ‘400 million additional forms each year’. That is to say 400 million additional costs. 400 million barriers to trade. 400 million reasons why Britain will be less competitive in its primary overseas market. 400 million reasons why British unemployment will rise further than necessary next year. The government’s new slogan is ‘let’s get going’; it should be ‘let’s start filling in the forms’.”
HMRC has previously estimated the cost of each of the 400m customs declarations at £15-£56, depending on the complexity of the consignment, meaning that the overall cost for this item of paperwork alone is likely to outstrip the UK’s annual contribution to EU budgets as a member.
Officials did not identify the locations for the new inland sites, which will deal with the overspill of form-filling and checks from ports which have insufficient space.
It is understood that no contracts have yet been completed for any of the 10-12 centres - including the 27-acre site earmarked for a processing park for 10,000 lorries at Ashford - but a number are expected to be located in Kent and others near to roll-on/roll-off ferry ports elsewhere in the country.
Cabinet Office minister Michael Gove set out the new “border operating model” in a statement to the House of Commons, in which he said he aimed to have a “fully operational border” by the end of the Brexit transition period on 31 December and “the world’s most effective and secure border in the world” by 2025.
However, his announcement did not cover Northern Ireland, where the UK government has been trying to back out of the agreement for a customs border in the Irish Sea which Mr Johnson signed up to last year.
And a survey by the Institute of Directors found that only a quarter of UK business leaders believe their companies are fully prepared for the end of the Brexit transition, when the UK will cease to be a member of the EU’s customs union and single market.
The government believes that around 70 per cent of large companies and 30 per cent of small and medium-sized enterprises have made preparations, such as taking on a customs agent to deal with paperwork, arranging direct debits for customs charges and applying for international driving permits and export registration numbers.
A drive is being launched to contact 12,000 companies which export only to the EU and are not familiar with bureaucratic procedures which previously applied only to the rest of the world but will now be required for imports and exports with the UK’s closest neighbours.
Industry figures estimate that an extra 50,000 private-sector customs agents will be needed to process Brexit paperwork, and the government has already spent more than £80 million on training them.
Mr Gove yesterday announced the government was spending more than £700 million on new infrastructure, technology and border officials to deal with the additional bureaucracy generated at ports by Brexit.
Under today’s border operating model, traders importing controlled goods, like alcohol and tobacco, will be required from January to complete full customs declarations and there will be physical checks on high-risk live animals and plants. From April, all products of animal origin and all regulated plants and plant products will require pre-notification and health documentation.
In a bid to minimise disruption at the borders on Brexit transition day, the UK has agreed to defer full customs declarations and tariffs for most imported goods until July next year.
The chief executive of the British Ports Association, Richard Ballantyne, said: “The publication of the border operating model really brings homes the breadth of new processes that goods being transported between the UK and EU will be subject to.
“Borders infrastructure of course means there will be some impact on freight and potentially flows of traffic. We are therefore pressing for the pragmatic enforcement of such processes so that trucks and cargo are not held up at our ports.
“Of course there is still a huge amount to prepare for and operators across the freight and logistics sectors will need to understand what will be required and what this will mean for their businesses.”
Best for Britain chief executive Naomi Smith said: "Communication on how the UK's borders will operate in the New Year is welcome, if extremely late.
"With guidance having been published with less than six months from the transition period ending, there's a risk that firms rush these vital changes and find themselves unable to trade into their largest market.
"At a time when British businesses are experiencing severe cashflow problems, it's unclear how these struggling firms will front the cost of operational changes so soon, let alone survive the loss of income from incorrectly completing exporter forms.”
Liberal Democrat leadership contender Layla Moran said: “These rules will mean additional time and financial burdens for firms and the new arrangements are likely to pose major headaches for companies.
“Every family and company are worrying about coronavirus and this is just added worry, added pressure and added concern right at the time we just don’t need it.”
Mr Gove said: “The publication of the Border Operating Model is an important step which gives business the certainty and direction they need to prepare for the end of the transition period when the UK becomes an independent trading nation for the first time in nearly 50 years.
“We are committed to working closely with businesses and the border industry to help deliver not just a fully operational border at the end of the transition period, but also the world’s most effective and secure border in the world by 2025.”