A SPOTLIGHT has been shone once again this week on the yawning gulf between what the Brexiters promised and the reality of their folly, with publication of a key report from the cross-party Public Accounts Committee.

Labour MP Dame Meg Hillier, who chairs the UK Parliament’s oldest select committee, summed the situation up well as its report concluded “it is clear that EU exit has had an impact” on UK trade volumes and that “new border arrangements have added costs to business”.

She said: “One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy – even more desperately needed now on the long road to recovery from the pandemic.

“Yet the only detectable impact so far is increased costs, paperwork and border delays.”

Dame Meg added: “The PAC has repeatedly reported on Brexit preparedness and at every step there have been delays to promised deadlines. It’s time the Government was honest about the problems rather than over-promising.”

Amid the “Brexit is done” narrative from the Leave camp, and especially given the bombastic approach of the Johnson administration, it is crucial the UK Government continues to be held to account for its actions and their impact on households and businesses. And Johnson and co. must heed and respond to the reality, presented in detail by the Public Accounts Committee and many others.

That said, we should not hold our breath waiting for this to happen. The Johnson administration seems to be carrying on regardless, in the style of the most British of farces, declaring this week that Jacob Rees-Mogg had been appointed Minister for Brexit Opportunities and Government Efficiency. These “opportunities” remain conspicuous by their absence. The negative effects of Brexit are, in stark contrast, plain for all to see. Or perhaps it would be better to say plain for those who want to see them.

Summarising what has occurred since the UK’s exit from the European single market, the committee says in its report: “The transition period ended on 31 December 2020. Since that date, trade volumes have been suppressed by the impact of Covid-19, EU exit, and wider global pressures. It may not be possible to separate out the impact of these individual elements on the UK’s trade with the EU, but it is clear that EU exit has had an impact, and that new border arrangements have added costs to business. We have repeatedly raised concerns about the impact of changes to trading arrangements on businesses of all sizes and we remain concerned.”

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This paints a crystal-clear picture of what is actually happening. Then again, with many Brexiters continuing to deny reality, it is unlikely to be taken on board by those smitten with the Leave camp ideology.

The committee is also clear in its report on what needs to be done on this front, declaring: “To minimise the costs to business as far as possible, government should: i) undertake a comprehensive exercise to identify and quantify the additional costs the business community and...stakeholders face as a result of new border requirements; and ii) identify opportunities to reduce costs and administrative burden to traders. Government should set out what progress it has made on these points.”

And those Brexiters who either will not or cannot recognise what is actually going on would do well to read the details of the increased costs for UK exporters doing business with European Union countries.

The committee says: “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...

“What is clear is that UK businesses face additional administration and cost when trading with the EU. For example, traders may have to pay an intermediary to help them complete customs declarations and traders in sanitary and phyto-sanitary (SPS) goods selected for physical inspections will have to pay fees to both government and the port. Traders may also need to pay tariffs if their goods do not meet ‘rules of origin’ requirements and there are internal costs associated with complying with the additional requirements.”

The committee’s views struck a chord with British Chambers of Commerce, which highlighted the feedback from its members about the greatly increased challenges of doing business with the EU following the UK’s departure from the single market.

 

The Herald: Opportunities from Boris Johnson's hard Brexit remain conspicuous by their absence Picture: Dominic Lipinski/PAOpportunities from Boris Johnson's hard Brexit remain conspicuous by their absence Picture: Dominic Lipinski/PA (Image: Dominic Lipinski/PA)

In its report, the Public Accounts Committee also concludes that “more could be done by government to ensure small and medium-sized enterprises are prepared to face the additional costs and administration required by new border requirements”. It observes in this context also the advent of full controls in the UK on imports from the EU, and HM Revenue and Customs’ acknowledgement that “it would be challenging for a small business to learn customs procedures and that most would be reliant on an intermediary”. And the committee declares “it is important that SMEs are not deterred from exporting because of the difficulty of complying with regulation”.

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Setting out its recommendation on this front, the committee says: “Government should identify what issues businesses are facing in relation to the new border requirements and in particular determine how they can provide SMEs with additional support, both through existing mechanisms, including customs intermediaries, and new methods of targeted support. Government should write to the committee, within six months, to provide an update on what measures have been taken to support SMEs.”

British Chambers, in the wake of the committee’s report, reiterated its own plea for action from the UK Government and highlighted the difficulties faced by firms.

William Bain, head of trade policy at British Chambers, said: “This report reflects the lived experiences on EU trade that more than a thousand small and medium-sized firms have shared with the BCC over the past six months. Sixty per cent of firms told us last autumn that getting goods over to EU customers had become more difficult since January 2021.

“We welcome the recommendation that the UK Government should identify opportunities to reduce border costs and burdens upon traders and provide measures to financially support SMEs.”

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Of course, as shown by the Theresa May government’s own forecasts, it is inevitable that the Boris Johnson administration’s hard Brexit will cause huge damage to the UK economy over the long term. That is what happens when you leave the world’s largest free trade bloc and give up frictionless trade with the EU. And when you end free movement of people between the UK and EU.

However, it is quite simply not good enough for the UK Government to behave as if Brexit is done, when its effects have only just begun, albeit they have already been huge.

It has a duty to help businesses which are having to bear the costs and deal with the difficulties of its Brexit odyssey. Boris Johnson and his colleagues should focus on this obligation rather than dreaming up peculiar new job titles for Cabinet posts, especially those which paint a picture of Brexit that is the opposite of the reality.