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05th Nov 2021

Brexit red tape has knocked £17bn off UK trade with EU in just three months

Charlie Herbert


Over eight months, exporters were forced to fill in 48 million customs declarations

New costs and red tape introduced because of Brexit has cost UK trade an estimated £17 billion.

The National Audit Office (NAO) found that firms have had to fill out a staggering 48 million customs declarations and 140,000 export health certificates in the eight months after the UK left the single market and customs union on January 1.

The report also warns the UK could face action for not “complying with international trading rules” after the government delayed introducing import controls set to come into place in January 2022.

At the same time, the NAO warns that some of the 41 ports needing upgrades may not have been ready if the controls had been introduced this year as planned.

The report states that there are “extra burdens” both at the border and “elsewhere in the supply chain.”

Whilst acknowledging that it is impossible to establish how much of the trade slump is also down to Covid, the NAO concludes that the UK’s withdrawal from the EU explains the drop in trade across the Channel between April and June this year.

“Total trade in goods between the UK and EU was 15 per cent (£17bn) less in Q2 when compared with the equivalent quarter in 2018,” the report reads.

The UK’s trade with the rest of the world was up 1 percent (£1bn) in the same three-month period.

It continues: “Between January and August 2021, traders have made around 48 million simplified and full customs declarations on goods movements between GB and the EU and between the UK and the rest of the world.

“Between January and June 2021, certifying officers have signed off 140,000 Export Health Certificates (EHCs) for the movement of goods from the UK to the EU.”

The report warns that once the planned import controls are introduced in July next year, traders will face even more declarations and checks.

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Hilary Benn, the Labour MP who co-heads the cross-party UK Trade and Business Commission, said the report confirms “what we have been hearing this year from businesses”.

He continued: “Far from creating opportunities, Brexit has burdened firms with increased costs and labour shortages, as well as mountains of red tape and pointless form-filling.”

The slump in trade had been reported by the Office for National Statistics in August, but this is the first time an actual cost has been calculated.

The NAO concluded that border preparations were “largely successful” in avoiding queuing chaos in Kent, but added that was partly due to pre-Brexit stockpiling, reduced trade because of Covid, and the import control delays.

Gareth Davies, the head of the NAO, said: “Much more work is needed to put in place a model for the border that reduces the risk of non-compliance with international trading rules, does not require any temporary fixes, and is less complicated and burdensome for border users.”