No-deal Brexit could mean freight delays and more fraud, says NAO
Oct 17 2019 / Hellenic Shipping News Worldwide
The government has conceded there could be freight delays, more crime and fewer checks on migrants in the event of a no-deal Brexit, a critical report from Whitehall’s spending watchdog has found.
With just two weeks before the UK’s scheduled withdrawal from the EU, the National Audit Office has concluded there are significant, unpredictable risks which could lead to chaos at the UK’s ports.
The most significant dangers to the operation of the border remain the possibility of EU countries imposing controls, businesses not being ready for bureaucratic changes and problematic arrangements for the Northern Ireland-Ireland land border, the body concluded.
In a report released on Wednesday, auditors said the government acknowledged that the operation of the border would be “less than optimal” in the event of no deal.
“This could include delays for goods crossing the border, increased opportunities for tax and regulatory non-compliance and less information to inform checks of people crossing the border,” the report says.
Auditors confirmed previous claims that there could be an increase in criminal activity. “It is likely that organised criminals and others would quickly exploit any perceived weaknesses, gaps or inconsistencies in the enforcement regime,” the report says.
Couched in the cautious language of an auditor, the report manages to convey the unpredictability of what may happen if the UK leaves the EU without a deal.
“It is impossible to know exactly what would happen,” it says. “This includes supporting businesses and individuals in meeting their new obligations, mitigating risks of the border becoming vulnerable to fraud, smuggling or other criminal activity, and activating civil contingency plans if necessary.”
The watchdog found that, despite a targeted information campaign, a “large proportion” of traders and businesses would not be ready for new customs and regulatory controls if the UK leaves without a deal.
New figures show that as few as one in 10 of the traders who may need to make customs declarations on the first day of a no-deal Brexit have registered to do so as required by the government.
By 8 October, only 25,000 out of 150,000-250,000 traders who may need to make a customs declaration for the first time had signed up to the transitional simplified procedures, according to auditors. Less than 20% of small and medium-sized UK businesses have so far prepared for French customs.
The report acknowledges that the government has announced temporary arrangements for managing trade crossing the land border from Ireland to Northern Ireland, but says these are “not likely to be sustainable because there is still uncertainty about border arrangements that the Irish government would introduce”.
The report also discloses how civil service resources have been sucked into Brexit preparations. There were around 17,000 staff in EU exit roles, auditors said. The government plans to have around 25,000 staff in EU exit-related roles by 31 October and a total of around 27,500 by March 2020.
About 2,000 staff will be redeployed from Whitehall departments into other roles. In some cases, departments are recruiting further staff for 31 October, the report says. Since April, the government has recruited 500 more Border Force employees to carry out transit checks.
Meg Hillier, the Labour MP who chairs the public accounts committee, said the report showed that the government was not prepared for a no-deal Brexit.
“It confirms that many traders and businesses will not be ready for new customs and regulatory controls and that organised criminals and others could exploit gaps,” she said. “Issues around the land border between Ireland and Northern Ireland remain unresolved.
“Mitigating the risks could be outside of government’s control; I hope all my fellow parliamentarians read this report carefully.”
A government spokesperson said: “We are doing all that is necessary to ensure that, if we do leave without a deal, the transition will be as smooth as possible for people and businesses – which the NAO recognises. This includes simplifying import processes, upgrading IT systems, securing additional freight capacity and putting traffic management plans in place around our busiest ports.
“Many of the challenges that we may face if the UK leaves the EU without a deal require businesses and citizens to take action. That’s why we are running the largest communications campaign in recent UK history.”
HMRC announced on Tuesday that it had automatically enrolled a further 95,000 of those who are VAT registered to the transitional simplified procedures.
Source: The Guardian