Thirty-Sixth Report - EU Exit: UK Border post transition

Select Committee

Public Accounts Committee HC 746 9 February 2022

Report Status Government responded

Conclusions & Recommendations 31 items (9 recs)

Source View on Parliament website

Government Response (AI assessment · 16 of 31 classified)

Accepted 7

Deferred 4

Not Addressed 2

Recommendations

9 results

2 Deferred

The new controls in place over the movement of goods from the UK to the...

Recommendation

The new controls in place over the movement of goods from the UK to the EU have created additional costs for businesses and affected international trade flows. It is not yet clear to what extent the declines in UK trade … Read more

Government Response Summary

The government agrees but states that it will produce an updated estimate of business costs when it is able to collect more stable trade data less affected by the pandemic and supply chain issues.

HM Treasury

3 Not Addressed

More could be done by Government to ensure small and medium sized enterprises (SMEs) are...

Recommendation

More could be done by Government to ensure small and medium sized enterprises (SMEs) are prepared to face the additional costs and administration required by new border requirements. In preparing for the end of the transition period government provided a … Read more

Government Response Summary

This response is from a different committee report. It states the PAC conclusion: While we wait for the much-delayed SEND review, the support system continues to fail many children and remains financially unsustainable.

HM Treasury

4 Accepted

Government intends to introduce full import controls in phases from January 2022, but much work...

Recommendation

Government intends to introduce full import controls in phases from January 2022, but much work remains to be done. The UK originally intended to introduce import controls on goods entering Great Britain from the EU when the transition period ended … Read more

Government Response Summary

The government agrees and has sent a letter from the Cabinet Office setting out the further information as requested by the Committee, alongside the Treasury Minute.

HM Treasury

5 Accepted

There is more to be done to ensure that traders and hauliers across the 27...

Recommendation

There is more to be done to ensure that traders and hauliers across the 27 EU countries are prepared for UK import controls. Departments have consistently rated a lack of trader and haulier readiness for new border controls as a … Read more

Government Response Summary

The government agrees and has dedicated resources to helping EU traders get ready for import controls, including events, meetings, and translated webinars and communications.

HM Treasury

6 Accepted

Government’s arrangements for goods arriving from the EU is untested and could be exploited, increasing...

Recommendation

Government’s arrangements for goods arriving from the EU is untested and could be exploited, increasing regulatory and fiscal risks. Governments operate import controls for several reasons including: to ensure goods meet relevant standards; to prevent smuggling and illicit activity; and … Read more

Government Response Summary

Alongside this Treasury Minute, the government has sent a separate letter from HMRC setting out further information as requested by the Committee.

HM Treasury

7 Accepted

Government’s ambition for the UK to have the “world’s most effective border by 2025” relies...

Recommendation

Government’s ambition for the UK to have the “world’s most effective border by 2025” relies on cross-government digital programmes, in which it does not have a good track record. In December 2020 the government published its strategy to put in … Read more

Government Response Summary

The government agrees and will write to the Committee by October 2022 with a timetable and roadmap for creating the world’s most effective border by 2025, having committed over £1 billion to border transformation.

HM Treasury

8 Accepted

Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved.

Recommendation

Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved. Both the UK and EU have recognised that there are issues with the implementation of the Northern Ireland Protocol. The Cabinet Office told us that … Read more

Government Response Summary

The government agrees and has been in talks with the EU to resolve the challenges with the Northern Ireland Protocol, while preparing for any outcome and updating Parliament on progress.

HM Treasury

26 Accepted

Ahead of the end of the transition period departments focused on putting in place an...

Recommendation

Ahead of the end of the transition period departments focused on putting in place an initial operating capability at the UK border. The new IT systems, or changes to existing systems, required to provide this capability were all delivered as … Read more

Government Response Summary

The government will write to the Committee by October 2022 to provide an update on the work to create the world’s most effective border by 2025, and share the roadmap it has developed for transformation of the UK border.

HM Treasury

27 Accepted

Departments’ track record delivering IT projects is particularly relevant given that HMRC is still working...

Recommendation

Departments’ track record delivering IT projects is particularly relevant given that HMRC is still working on replacing its CHIEF customs system with a new Customs Declaration Service (CDS). CDS was originally supposed to be in use by all UK traders … Read more

Government Response Summary

The government will write to the Committee by October 2022 to provide an update on the work to create the world’s most effective border by 2025, and share the roadmap it has developed for transformation of the UK border.

HM Treasury

Conclusions (22) Observations and findings — click to expand

1 Conclusion Not Addressed

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office, the Department for Environment, Food and Rural Affairs (Defra), the Department for Transport (DfT), and HM Revenue & Customs (HMRC).1 We also took evidence from the British Ports Association, Dr Jerzewska …

Government Response Summary

The government's response relates to an entirely different recommendation regarding monitoring COVID-19 costs, and not the conclusion presented.

9 Conclusion Deferred

There is clearer evidence available of the impact of the UK’s new trading arrangements on UK businesses, which now face additional administration and costs when trading with the EU. For example, Dr Jerzewska told us that even though full import controls have not yet been introduced into the UK, the …

Government Response Summary

The government agrees but states that it will produce an updated estimate of business costs when it is able to collect more stable trade data less affected by the pandemic and supply chain issues.

10 Conclusion

In addition to the new customs requirements, some industries can find themselves subject to extra controls depending on the company’s individual supply chain and the industry they are in – some goods will find themselves much more regulated than others.23 Examples include: • Exports to the EU of live animals, …

11 Conclusion

In the run up to the end of the transition period, the government provided a range of support to help traders prepare. This included: running a communications campaign across multiple channels; writing directly to businesses to encourage them to get ready; and offering one-to-one support to the 10,000 GB businesses …

12 Conclusion

We heard from witnesses; in written submissions; and from cases in our own constituencies about some of the particular issues that smaller businesses have faced as they try to get to grips with new requirements. For example, ADS, which represents the UK’s aerospace, defence, security, and space industries, 95% of …

13 Conclusion

Smaller traders now also need to prepare for full import controls. HMRC told us that it put a lot of effort into reaching smaller businesses.37 However, it also told us that customs is a highly intermediated process which usually only larger businesses try to do 27 Q 45; C&AG’s report, …

14 Conclusion

The EU introduced import controls on goods entering the EU from the UK at the end of the transition period from 1 January 2021. The UK government originally planned to introduce full import controls on the same date but has subsequently delayed introducing these controls three times.40 It now intends …

15 Conclusion

Although government told us about the good progress that it has made in putting in place the systems, infrastructure and staff required for the introduction of import controls, we note that government still needs to deliver further changes.43 For example, Defra still needs to ensure that the Import of Products, …

16 Conclusion

The British Ports Association, who represent the UK ports, told us about areas in which ports need new information from government to inform the business decisions they need to make as private commercial entities.49 It wanted government to outline the charging regime that will be in place at the government-run …

17 Conclusion

The most significant risk to the operation of the border from 1 January 2021 was that traders and hauliers would not be ready. Despite carrying out a significant programme of work to encourage traders and other border users to get ready, in December 2020 the Border Protocol and Delivery Group …

18 Conclusion

Concerns over readiness have led to the government delaying the implementation of import controls three times and departments’ focus is now on improving UK and EU readiness for the implementation of UK import controls.56 Logistics UK told us that improving readiness across 27 member states is significantly more challenging than …

19 Conclusion

HMRC told us that its main trader concerns related to small businesses. It had a high level of confidence that large traders, which are responsible for about 85% of the value of imports from the EU to the UK, would be ready for January 2022.60 Its focus was therefore on …

20 Conclusion

Rather than trader or port readiness, HMRC told us that the readiness of EU hauliers was now the main risk ahead of the implementation of UK import controls. HMRC told us that while EU haulier readiness is improving, it is coming from a lower base and accordingly it is writing …

21 Conclusion

The government needs to introduce import controls for several reasons, including: to ensure imported goods meet the relevant standards in areas such as food and product safety and disease control; to prevent smuggling and illicit activity; and to comply with international obligations.64 We heard that traders will need to notify …

22 Conclusion

Defra told us that it had learned from experience of checks being introduced by the EU and that starting with pre-notification before introducing checks means that people would have to get used to using the IPAFFS system.66 It told us that in the early days there would be the option …

23 Conclusion

The NAO report notes that, since the end of the transition period, the UK government has chosen to prioritise the flow of goods over compliance, but that, after the introduction of import controls, departments will no longer be able to prioritise flow to the same extent and will need to …

24 Conclusion

We were interested in the potential implications for compliance of the requirement for departments to undertake some checks away from the ports at which goods arrive. HMRC acknowledged that it is ideal to have infrastructure at a port and the goods controlled at that port but that it was just …

25 Conclusion Acknowledged

In December 2020, the government published its 2025 UK Border Strategy, which set out the government’s vision to have the “world’s most effective border” by 2025.77 This set out how the government would improve coordination between government departments and agencies at the border; reduce duplicative asks for data; and make …

Government Response Summary

The government outlines its 2025 UK Border Strategy and six key transformations designed to reduce costs and administrative burdens, focusing on enhancing data collection, enabling upstream compliance, and making border documentation digital.

28 Conclusion Acknowledged

The Northern Ireland Protocol came into operation from 1 January 2021, with grace periods delaying the requirements for some checks and preparations.87 Government told us that the requirements of the Protocol had had a significant impact on Northern Ireland trade including causing considerable diversion of trade.88 For example, trade between …

Government Response Summary

The government has been in intensive talks with the EU since October 2021 to resolve the challenges with the Northern Ireland Protocol, though remain some distance apart in reaching a negotiated outcome, and will continue to work to prepare for whatever outcome is reached.

29 Conclusion Deferred

HMRC told us that it had introduced the Trader Support Service as a free to use service to make customs declarations on behalf of affected businesses and is planning to spend £360 million on this over two years. HMRC stated that the majority of businesses moving goods from Great Britain …

Government Response Summary

Response duplicates the response to ID 16376.

30 Conclusion Acknowledged

The Cabinet Office told us that, having seen considerable diversion of trade and, due to the lack of support for the Protocol among parts of the community in Northern Ireland, the government had proposed changes to the European Commission to how the Protocol operates. It also told us that it …

Government Response Summary

The government has been in intensive talks with the EU since October 2021 to resolve the challenges with the Northern Ireland Protocol, though remain some distance apart in reaching a negotiated outcome, and will continue to work to prepare for whatever outcome is reached.

31 Conclusion Deferred

The UK government set out its proposals in a July 2021 Command Paper.96 The Cabinet Office told us that it wants to apply a risk-based approach whereby for most goods only those which are at risk of crossing from Northern Ireland into the EU customs area in Ireland are subject …

Government Response Summary

Response duplicates the response to ID 16376.