NAO report on the UK border: preparedness for EU exit

Wednesday, 16 October 2019 00:01

There are risks to the UK border if the UK leaves the EU without a deal on 31 October 2019. Government departments have done a great deal to prepare, but the National Audit Office (NAO) has found that the most significant risks to the smooth operation of the border remain and resolving them is now, to some extent, out of government’s control. In its report, published today, the NAO has provided an independent assessment on how government departments have been preparing the...Request free trial

In its report, published today, the NAO has provided an independent assessment on how government departments have been preparing the border for a no-deal exit since the Article 50 deadline was extended from 12 April 2019.

It is impossible to know exactly what will happen at the border in the event of no deal. Government accepts the border will be “less than optimal”, which could mean disruption of goods crossing the border and queues for businesses and the public.

Government has prioritised security and safety; the flow of people and goods; and then compliance activity, including the collection of revenue. This comes with financial risks, as in the short-term it will not require EU traders to provide all the information at the border that it requires of non-EU traders. As the NAO has previously reported, it is also likely that organised criminals will quickly exploit any perceived weaknesses or gaps in the enforcement regime.¹

The government intends to apply temporary measures to give businesses more time to prepare and facilitate the flow of traffic. These include Transitional Simplified Procedures which allow registered businesses to delay submitting customs declarations and payment of customs duties on imports from the EU to the UK. As of early October 2019, approximately 25,000 of the 150,000 to 250,000 traders that may need to make a customs declaration on day one in the event of no deal had registered.

In preparing for a no-deal exit, government has put in place new systems, upgraded existing systems and made other extensive changes to minimise potential disruption. Since April, departments have strengthened aspects of their preparations including testing whether key systems will operate and integrate as planned on day one. They have secured and developed three more sites to deal with the expected increase in goods entering the UK under transit arrangements.²They are also recruiting more staff, including around 500 more Border Force staff in 2019-20 to carry out transit checks.

However, despite government’s efforts, there is still work to do and little time to resolve any issues which may emerge. Government has also not been able to address the most significant risks relating to the border, although it has tried to minimise the impact of these.

Government’s reasonable worst-case planning assumptions state that the flow of goods across the border could initially be reduced to 45-65%, taking up to 12 months to flow normally. In forming this estimate it assumed that 30-60% of hauliers travelling to the EU border won’t have appropriate documentation. Therefore, government plans to introduce mandatory readiness checks on lorries to identify and divert hauliers who are not ready for French customs to reduce queues building up on the approaches to Dover and Eurotunnel. There is limited time to get the necessary infrastructure and staff in place to undertake these checks, finalise how they will operate in practice, and inform hauliers ahead of 31 October.

The UK government has announced temporary arrangements for managing trade crossing the land border from Ireland to Northern Ireland, in the event of no deal, but it acknowledges these are not likely to be sustainable. There is still uncertainty about border arrangements that the Irish government would introduce, including what checks it would impose or where they would take place.

The government is once again preparing to activate its civil contingency plans to manage short-term, severe impacts of no deal, known as Operation Yellowhammer. Work is also underway to enable the continued supply of essential goods and medicines, and to manage queues of traffic in Kent (Operation Brock).

Many border arrangements for a no deal are temporary and not sustainable in the longer-term. In the longer-term, government will need to balance enabling the flow of traffic across the border with introducing appropriate measures to minimise risk of non-compliance or criminal activity.

Gareth Davies, the head of the NAO, said today: “Preparing the UK border for EU exit with or without a deal is extremely complex and has required a huge amount of work from many government departments, agencies and third parties such as traders. Despite their efforts, significant risks remain which may have consequences for the public and businesses.

“Government will face new challenges in monitoring and responding to any disruption that may ensue following a no deal exit, and will need to replace temporary measures with sustainable long-term solutions to ensure the border is fit for purpose.”

- ENDS -

Key facts

150,000 to 250,000

traders, estimated by HM Revenue & Customs (HMRC), who would need to make a declaration for the first time in the event of no deal

30% to 60%

estimated proportion of heavy goods vehicles travelling via the short Channel crossings that will be ready for French customs, under the government's reasonable worst-case scenario

45% to 65%

assumed flow rate, as a percentage of current flows, at the short Channel crossings on day one under the government's reasonable worst-case scenario

228.5 million	The number of tonnes of freight which crossed the border between the UK and the rest of the EU in 2018, not including an unknown amount that crossed the border between Northern Ireland and Ireland
270 million	HMRC's revised estimate of the annual number of customs declarations it may be necessary to process if the UK leaves the EU without a deal, compared with current volumes of 55 million
Approximately 25,000	The total number of traders registered for Transitional Simplified Procedures, of the 150,000 to 250,000 traders who may need to make a customs declaration for the first time in the event of no deal, as at 8 October 2019
5 to 20%	The government's estimate of the number of small and medium-sized enterprises who will be ready for French customs, under the government's reasonable worst-case scenario
Up to 1,000	The number of additional staff for whom Border Force has been allocated funding since April 2019, including around 250 staff to support the increase in transit checks from day one
£42.4 billion	Estimated tax and duty collected in 2018-19 from border transactions

Notes for Editors

National Audit Office report (October 2018): The UK border: preparedness for EU exit
This involves using the transit procedures that are common to countries which are members of the Common Transit Convention (CTC). When the UK leaves the EU, it will become a member of the CTC in its own right. Under the CTC, traders only need to make an import declaration at the start of their journey and an export declaration at the end. They do not need to make additional declarations when moving goods across borders within a customs area, which reduces the administrative burden on them. Moving goods under transit arrangements also allows traders to pay their customs duties only when the goods reach their final destination.
This is our fourth report covering the UK border since the EU referendum in June 2016. Our previous reports were: The UK border (October 2017); The UK border: preparedness for EU exit (October 2018); and The UK border: preparedness for EU exit update (February 2019)