New post-Brexit border checks set to come into force in 2024 will cost UK companies at least £330m a year, Rishi Sunak’s government has admitted.
Additional red tape on food, animal and plant products imported from the EU had been due to be phased in from October – but was pushed back amid fears the extra costs will add to inflation.
A Tory Cabinet Office minister revealed the expected annual cost in an answer to a senior Labour MP, following warnings from industry it will push up prices and drive some small firms out of business.
Baroness Lucy Neville-Rolfe said: “It will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regimes.”
“We estimate these new costs of the model at £330mn p.a [per annum] overall, across all EU imports,” she wrote in the letter to Stella Creasy, chair of the Labour Movement for Europe.
Ministers were accused of “absolutely shambolic” handling of the rollout after the decision to delay the new model was reported back at the beginning of August.
The government announced a three-month delay to the health certificates required for imports, which will now brought in from 31 January. Sanitary and phytosanitary (SPS) checks on medium-risk food, animal and plant products come into force on 30 April.
A new charge of up to £43 per imported consignment comes alongside separate fees for customs agents and SPS inspections on the way.
The Cabinet Office minister said “around half” of the £330m annual cost was accounted for by export health certificates – but said it represented a “saving” for business of £520m from the original plans for checks.
But Ms Creasy insisted it was not a “saving”, adding: “British companies struggling with border paperwork to import food will have little choice over these charges meaning it’s likely British consumers will have to pick up the bill,” she said.
Shane Brennan, chief executive of the Cold Chain Federation, told the Financial Times: “It is a shame that it has taken so long to just admit this candidly. What is not included in this original estimate is the cost of confusion, delayed deadlines and ongoing uncertainty.”
It comes as Northern Ireland secretary Chris Heaton-Harris told the Tory conference in Manchester that there was too much “doom and gloom” about Brexit issues – insisting that economic prospects for the province were “unbelievably promising”.
Mr Heaton-Harris has been in the “final stages” of talks with the DUP, as he attempts to persuade the unionist party accept the Windsor Framework deal with the EU and restore power-sharing with Sinn Fein at Stormont.
The cabinet minister told the conference on Sunday: “There’s always been a lot of doom and gloom around this subject for too long. In reality, Northern Ireland’s economic prospects are unbelievably promising.”
Crucial parts of the prime minister’s Windsor Framework agreement with Brussels comes into effect on Sunday – including the green and red lane system for the movement of goods between GB and NI.
Mr Heaton-Harris said 1,600 new businesses have signed up to our new internal market scheme, claiming “more traders than ever want to do business in Northern Ireland”.