Thousands of exporters not ready for 1 January move to new rules, MPs told.
A government minister has sparked a backlash from businesses after accusing them of a “head-in-the-sand” failure to prepare for Brexit, and warned their companies may be at stake as a result.
With just 80 days to go until the UK completes its transition to post-Brexit arrangements and no trade deal agreed with Brussels, Lord Agnew told a Commons committee that thousands of exporters have still not registered for the crucial EORI trading number needed to keep selling to the EU.
The Treasury and Cabinet Office minister said that there “seems to be a lack of urgency on the part of too many traders”.
But the chief operating officer of the Food and Drink Federation, Tim Rycroft, retorted: “I don’t think it’s accurate or helpful for ministers to assert that traders have not engaged in Brexit planning.
“If any traders have their head in the sand it’s because, after many frustrating months awaiting critical answers, they probably think it’s more likely they’ll find those answers in the sand than they will from the Government.”
The policy director of freight hauliers’ trade body Logistics UK, Elizabeth de Jong, said: “Rather than ignoring the UK’s upcoming departure from the EU, Logistics UK has been proactively urging its members to make sure that they and their customers prepare as much as possible for the new trading conditions we will face."
And CBI deputy director-general Josh Hardie said: “Businesses are doing all they can to prepare for Brexit. But firms face a hat-trick of unprecedented challenges: rebuilding from the first wave of Covid-19, dealing with the resurgence of the virus and uncertainty over the UK’s trading relationship with the EU.
“More than three-quarters of businesses want a deal that will support people’s jobs and livelihoods amid these incredibly uncertain times. The best way to help preparations is to agree a deal in the coming weeks."
Lord Agnew told the Treasury Committee that firms which fail to prepare their paperwork risk having lorries turned back at the ports and then forced to wait 36 hours in a holding truck park such as Manston airfield while red tape is processed.
The peer said that customs arrangements were “in a reasonably good shape” for the move to post-Brexit conditions on 1 January, with new computer systems “largely ready”, though he voiced concern that the French side of the Channel “won’t be as ready as we would like”.
But he said that smart freight app to allow drivers to process paperwork via their phones had only been “released for beta testing” this week.
And he told the cross-party committee: “The bit that worries me the most is the trader readiness.
“There’s been a head-in-the-sand approach by traders which has been compounded by what I would call the quadruple-whammy of two false alarms – two extensions at the very last minute – then followed by Covid and now followed by the recession.
“The traders are not as ready as they should be.”
Lord Agnew said he hoped his comments would “send another shot over traders’ bows to warn them that it is their businesses that are at stake from 1 January and they really must engage in a more energetic way.”
The committee heard that 250,000 UK exporters do not sell outside the EU and have no experience of the new red tape which will be required following Brexit. Of these, at least 40,000 have not yet applied for an EORI number, which is a basic requirement for them to keep exporting.
Lord Agnew said it was hoped that the smartphone app will be ready for rollout in November, but described it as the “icing on the cake” of the new border system.
But asked whether failure to deploy it in time would cause “a major problem with traders descending on Dover”, he replied: “You have, you’re absolutely right.”
The government minister indicated that hopes of clearing gridlock at the big Channel ports would depend in part on companies learning from the painful experience of lengthy delays and fines for not having the right paperwork.
He said: “To be brutal about it, how many times is a lorry driver going to drive into Kent, take a £300 fine and park up at Manston for 36 hours while he gets his paperwork sorted?
“I hope to goodness that they won’t let them do that more than once. That’s the consequence of not being ready - you turn up, you get a fine, you get parked in a holding bay while they sort your paperwork out, there will be congestion and they might send you home because they can’t sort your paperwork out.
Lord Agnew said that the 4,000-truck holding centre at Manston was “not in a particularly good geographic position” for taking traffic from Dover and was only “85 per cent ready to go”. The MPs were told that other inland sites were being setting up, including at Ebbsfleet and Ashford in Kent.