Global Britain’s cheerleaders may have to live with lasting damage to exportsSeptember 21, 2021
Kicking post-Brexit import controls down the road for a second time puts UK goods at a disadvantage
It came as a little surprise to anyone in the UK’s logistics industry or at its ports when the government announced its decision to delay – for the second time in a little over six months – the introduction of post-Brexit import controls on goods arriving in Great Britain from the EU.
New checks on food and animal products imported from the continent will now not be brought in until 1 July 2022, a full year after they were originally intended to begin. The introduction of other requirements, including the paperwork that accompanies imports of food and animal products, has also been delayed from 1 October to next year.
Logistics firms, already suffering from a shortage of workers –including HGV drivers – and supply chain disruption, breathed a sigh of relief at the offer of more time. Particularly because the original implementation of extra controls on New Year’s Day would probably have piled further pressure on what is already shaping up to be a difficult Christmas season for traders, fraught with stock shortages and logistical challenges.
Yet there is a certain irony to the UK government’s decision, given that it turned down pre-Brexit requests from several business groups for a longer transition period, to allow firms to adapt to new trading requirements. Ministers blamed the pandemic for the postponements, but the required border control infrastructure – which in some cases the government itself is responsible for – is well behind schedule and wouldn’t have been ready on time.
The construction of inland border control posts, in places such as Dover and Holyhead, where there isn’t space for a checkpoint next to the terminal, is being overseen by the UK government, along with devolved administrations in Wales and Scotland. Plans for a huge customs clearance park on fields at the White Cliffs site on the outskirts of Dover have recently been significantly downgraded, while building work won’t begin until next spring. Meanwhile, the planning application for the inland border facility at Holyhead on Anglesey – a key staging post for trade between the Irish Republic and Britain – hasn’t yet been approved by Welsh government ministers.
Port operators building their own border facilities have roundly criticised the government’s handling of the funding process for the multimillion-pound infrastructure projects, where financial allocations were confirmed only a fortnight before Brexit. Many would argue there’s little point in implementing import checks before the required facilities are ready. After all, it is entirely in the UK’s gift to decide when to introduce them.
This raises the question: do delays to import checks matter?
Goods arriving from the EU, including food, still meet the same standards as when Britain was in the bloc, which means they haven’t suddenly become unsafe. That said, trade experts don’t consider it a sensible long-term policy to have a relatively open border, which could be targeted by smugglers.
Yet not all have welcomed the further delay, and one industry body, the Food and Drink Federation, came out swinging. It criticised the postponement, stressing how businesses had invested time and money to prepare for new procedures, only to see them kicked down the road.
Meanwhile, exports to the EU from the UK have been subject to controls since 1 January this year. British produce travelling to the EU risks being stopped at customs, and any paperwork mistakes could result in a shipment being turned back. This will not happen to goods travelling the other way, which would put UK goods at a disadvantage.
UK food and drink exports to the EU tumbled in the first six months of the year, and there has also been a fall in shipments of other goods including medicinal and pharmaceutical products. Some fear the complexities of post-Brexit trading with the continent may lead to firms permanently stopping EU exports, a fall that is unlikely to be offset by trade with countries such as Australia and China.
Brexit minister Lord Frost last week announced plans to overhaul legislation automatically transferred to the UK after Brexit, including rules on genetically modified farming, medical devices and vehicle standards.
Regulatory changes are promoted as “Brexit opportunities” by the government, but may make it even harder for British firms to sell their goods to their closest neighbours.
A lasting reduction in exports is surely not the goal of the proponents of “global Britain”, but it’s one that they may find themselves having to accept.
Energy crisis shows that going green is vital for business, too
The British economy still has fossil gas pumping through its veins. The consequences of this are expected to be laid bare this winter as the effects of the global gas crisis start to spread through homes, businesses and industry. Last week was a first taste of the financial pain that threatens to cripple Britain’s recovery.
Steelmakers have begun suspending work during the hours when energy prices have surged to successive record highs, and fertiliser factories employing almost 600 workers in the north of England have shut down altogether. More are expected to follow suit as colder weather drives energy markets higher, making it impossible for heavy industry to turn a profit or compete with rivals overseas.
For energy-intensive industries, the fallout of record energy prices has been swift and merciless. However, within months this financial pain will seep through the businesses that make up the wider economy, and into the homes of millions of consumers.
“I hope you have some candles,” remarked one well-regarded market analyst. It may have been a wry reference to the tabloid blackout cliches that last did the rounds in the middle of the last decade, but experts and industry leaders have never been more serious about the risks facing the UK this winter.
In the short term the government should follow the lead of governments across Europe that are already taking action to help hard-pressed households. In Spain, this has included a €3bn (£2.6bn) tax raid on the energy companies that stand to benefit from record prices.
In the long term the government needs to end its reliance on the global gas markets by investing more in homegrown low-carbon electricity and green hydrogen. Going green has never made more financial sense.
Fast-fashion chains look to slip into something more sustainable
The climate crisis has ratcheted up the pressure on big fashion industry players to mend their ways, and last week Primark and Asos, which both sell clothes by the truckload to young shoppers, announced plans to clean up their respective environmental acts.
It is not before time. For years MPs and green campaigners have been banging on about the environmental harm that is caused by the carbon emissions, water use and chemical and plastic pollution from a fashion industry that produces 100bn new items of clothing every year.
Asos has now set a target of net zero carbon emissions by 2030, by which point all its own-brand clothes would be made from recycled or more sustainable materials; that rate stands at just 30% today.
By 2030, all Primark clothes will be made from recycled or more sustainably sourced materials (today just a quarter are) and the low-price fashion chain is also promising to make them last longer.
The retailers’ ambitions are to be welcomed, although one suspects they are being driven by the responsible investing trend in the City rather than by shoppers’ appetite for greener clothes. Just look at Boohoo, whose customers have been all too willing to turn a blind eye to allegations of poor working conditions in clothing factories in the UK when they have needed a wardrobe fix.
But it is getting harder to ignore the elephant in the room. In an age where the mantra is sustainability, the fast fashion model – which requires people to keep buying clothes when they have a wardrobe full of stuff at home, seems dangerously anachronistic.
Asos chief executive Nick Beighton said: “The responsibility for a sustainable future lies with all of us, and businesses must lead the way.”
That’s true. At this juncture the industry’s famous creativity needs to be ploughed into drawing up the innovative supply chains and fabrics that will make it fit for the future.
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