Concerns remain as the UK prepares for new arrangements from 1 January, warns Committee

A cross-party report, agreed unanimously by the Committee on the Future Relationship with the European Union and assessing UK preparedness for the end of the transition period, warns of a potentially challenging start to 2021 as businesses, traders and citizens adjust to life outside the Single Market and Customs Union.

The report’s key findings include:

• Given the overall state of preparedness, the Government must have robust contingency plans ready for 1 January

The report acknowledges the complex work Government has done in developing the Border Operating Model. However, key decisions have been taken very late – including the announcement of the outcome of bids to the Port Infrastructure Fund and the location of inland facilities to serve the ports of Holyhead and Cairnryan. This has affected overall readiness as 1 January approaches, and makes it even more critical that the Government has robust contingency plans in place to deal with any disruption from 1 January.

• Late delivery of IT leaves little time for users to adapt

The report notes that whilst the Government appears to be on track to make the necessary changes to its own IT systems by 1 January, such as the HMRC’s Customs Declaration Service, they are being rolled out with very little time remaining.

Not all businesses and traders will be able to update their own systems that integrate with the HMRC IT systems, nor will they be fully trained on the new software at ports and in countries they are exporting to or importing from. This training is vital if new arrangements are to function smoothly, and late delivery makes this harder. There are also concerns that the systems have not been fully tested. The Government should therefore have a plan to swiftly address any problems that arise.

• The UK and EU should reciprocate on no-deal measures and phasing-in of goods controls

The Committee welcomes the European Commission’s no-deal contingency measures for road freight and road passenger transport, published on 10 December, and recommends that the Government ensures they can be enacted, if required, by reciprocating in full.

The report says that the Government decision to phase in controls on goods arriving from the EU over the first six months of 2021 was the right one. But it warns that July is not far off and urges that all necessary systems and infrastructure are put in place, and businesses made aware of what changes they need to make, as soon as possible. The report also calls on the EU to reciprocate the UK’s decision to phase in controls.

• Trained customs personnel must be in post, and business engagement ramped up

As well as IT systems and physical infrastructure, new trading arrangements will require trained customs agents if they are to run smoothly. Businesses and traders will be reliant on these intermediaries for assistance with paperwork; and ensuring they comply with new requirements, for example on plant and animal health, and food and feed safety. If the right people are not in the right place at the right time, businesses and traders will face an uphill task. The Government must therefore be ready to address any personnel shortages.

The report welcomes the Government’s efforts to engage with businesses about the changes that are coming, but warns that with so little time remaining, continuing uncertainty about the future arrangements, unclear guidance and the additional complexities created by Covid-19 restrictions, businesses have been constrained in their preparations.

• The UK needs to ensure its border is safe and secure

The report says that whilst the precise nature of future co-operation with the EU on law enforcement remains unclear, the UK’s safety and security must not be compromised. While UK law enforcement agencies are working hard to develop alternatives to EU databases such as the Schengen Information System II, the fall-back systems for information sharing are likely to be slower and more cumbersome. We still do not know if the UK will receive a data adequacy decision to enable data transfers from the EU to the UK, and a replacement for the European Arrest Warrant is unlikely to be in place by 1 January. The Government must closely monitor the speed and effectiveness of its fall-back systems.

The Government should also explore all available opportunities for countering cross-border crime in Northern Ireland, including bilateral arrangements, that build on current co-operation between the Police Service of Northern Ireland and An Garda Siochána.

• The Ireland/Northern Ireland Protocol must remain a priority

The Committee welcomes the agreement between the UK and EU about how the Protocol will work in practice, whilst noting the likely negative consequences of the agreement being reached so late for citizens and businesses. It also warns that even with an agreement, the early months of 2021 are likely to be difficult, with some problems deferred rather than solved. Northern Irish businesses and civil servants will face challenges, and if these are to be overcome, then all parties must show flexibility, creativity, and generosity of spirit.

To ensure that the Protocol is applied consistently and to avoid future disputes, HMRC should work closely with the Irish Revenue Commissioners and other relevant authorities. The Government should also, together with its devolved counterparts, put contingencies in place to minimise traffic disruption near affected ports.

Commenting on the report, Committee chair Hilary Benn MP said:

“With just seven working days until the end of the transition period, significant concerns remain. The Government still cannot provide businesses, traders and citizens with certainty about what will happen in all the areas affected by the negotiations, but as we leave the rules of the Single Market and the Customs Union, firms exporting to the EU will face more red tape, unfamiliar forms and extra costs from 1 January whatever happens.

“Some progress has been made. We welcome the agreement on the implementation of the Northern Ireland Protocol, for example. But we are worried about the consequences of trucks not having the right paperwork, traffic disruption around ports, and the UK’s security being affected by loss of access to EU law enforcement databases. It is also disappointing that an agreement on the Northern Ireland Protocol could not be reached before now and that some issues have been deferred.

“At this late stage, the Government must be ready to implement contingency plans where necessary to mitigate the effects of any disruption. Failure to do so would mean the worst possible start to the new year for many people and businesses who are already experiencing the toughest of times.”