Former Brexit boss warns UK companies could ‘abandon’ imports under new rules

A former senior official responsible for Brexit planning has warned that some UK companies may ‘give up importing’ due to new rules implemented in the new year.

Philip Rycroft, who served as permanent secretary of the Department for Exiting the European Union (DExEU) between 2017 and 2019, said the changes that came into effect on January 1 would lead to “start-up problems” with some sectors being hit harder. affected than others.

The news comes as Boris Johnson has pledged to “maximize the benefits of Brexit” in 2022.

The Prime Minister, marking a year since the entry into force of the post-Brexit free trade agreement with the European Union, said the government would “go further and faster” to take advantage of “the enormous potential brought by our new freedoms ”.

But with the introduction of new barriers to trade with the bloc, Mr Rycroft said some companies might decide it “is not worth the trouble.”

Former senior official Philip Rycroft said new trade rules with the EU would cause ‘youth problems’ (Gareth Fuller / PA)

(PA wire)

The changes in effect from January 1 mean importers must make a full customs declaration on goods entering the UK from the EU or other countries.

Traders can no longer delay the completion of full import customs declarations for up to 175 days, a measure that was introduced to deal with the Brexit disruption.

There are separate provisions for trade with the island of Ireland.

Mr Rycroft told BBC Radio 4’s PM program that the new rules may be too onerous for some companies.

“The Federation of Small Businesses estimates that only about a quarter of its members are ready for this, which is a bit surprising in a way because they had obviously been well informed of what was to come,” he said. declared.

“But let’s not forget, they’ve had a pretty scorching year, most businesses, with Covid and everything, so a lot of businesses won’t be ready.

“There will be startup problems… but the big question is how many companies end up thinking, ‘Do you know what? Is it just too complicated and ditch the import? Just as some companies have already given up on exporting because it is not worth it.

He added: “Companies exporting to the EU from the UK have already faced these rules, obviously, for almost a year. It will therefore now be British companies importing from the EU (who) will have to deal with this new Brexit bureaucracy.

“This is what it means to take back control of our borders. It will hit some sectors harder than others. The rules are more complicated for animal products, especially food products that contain animal parts, because of all the requirements that come with it. “

Rules on country of origin documents have also become slightly stricter, with declarations to be made when goods arrive here.

Mr Rycroft said it would be “really complicated” for some products that “have a lot of different pieces or ingredients in”.

The big question is how many companies ultimately think ‘you know what, this is too complicated’ and give up importing?

Philip Rycroft, former permanent secretary of DExEU

When asked if the country is likely to see prices rise or empty shelves, he replied, “I wouldn’t overdramatize it. I think that there are new costs on the sidelines, which will ultimately have to be borne by consumers.

‘So HMRC estimates the total cost of these new systems will be around £ 13bn per year – that’s a lot of money spread over a large population like the UK, of course it’s increases low costs through the supply chain.

“But at the margin too, there will be companies, as I said before, (who) will think, ‘Do you know what? It’s not worth it.’ There will therefore be a reduction in choice at the margin as well.

“This is why the Office (for) Budget Responsibility estimates that the net impact of this agreement on our wealth as a country will be to reduce it by around 4% in the medium term.

“This is because trade between the UK and the EU will be much less free than it was when we were in the single market.”

DExEU closed in January 2020, with Brexit negotiations now being handled by the Foreign Office.

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