Recommendations & Conclusions
31 items
2
Recommendation
Thirty-Sixth Report - EU Exit: UK Borde…
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 with the EU since the end of the transition period …
Government response. 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government adopts an evidence-based approach to policy making and will continue to do so. With 2021 being a non-typical year of trading because of the pandemic and customs …
HM Treasury
3
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 range of support to help UK businesses prepare for new …
Government response. 4. 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
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 in January 2021. The government has delayed introducing these controls …
Government response. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 Alongside this Treasury Minute, the government has sent a separate letter from the Cabinet Office setting out the further information as requested by the Committee.
HM Treasury
5
Recommendation
Thirty-Sixth Report - EU Exit: UK Borde…
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 high risk to the operation of the UK border after …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The government has dedicated significant resources to helping EU traders get ready for import controls and will be announcing further engagements soon. Since April 2021, the government has delivered …
HM Treasury
6
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 to comply with international obligations. Defra is introducing pre-notification in …
Government response. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 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
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 place the “world’s most effective border” by 2025, this set …
Government response. 7.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2022 7.2 Delivery of the 2025 Border Strategy is well underway, and programmes and pilots will deliver tangible benefits to UK businesses over this year. The 2021 Spending …
HM Treasury
8
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 the results of its monitoring of the impact of the …
Government response. 8.1 The government agrees with the Committee’s recommendation. Recommendation implemented 8.2 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 …
HM Treasury
1
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 2. PAC conclusion: We are concerned that HM Treasury does not intend to adequately monitor and update the ongoing cost of COVID-19 to the taxpayer. 2. PAC recommendation: As part of its Treasury Minute response, HM Treasury should explain how, …
HM Treasury
9
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government adopts an evidence-based approach to policy making and will continue to do so. With 2021 being a non-typical year of trading because of the pandemic and customs …
HM Treasury
10
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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, …
HM Treasury
11
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
12
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
13
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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, …
HM Treasury
14
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
15
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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, …
HM Treasury
16
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
17
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
18
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
19
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
20
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
21
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
22
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
23
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
24
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 …
HM Treasury
25
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 2.3 The government set out in its 2025 UK Border Strategy six key transformations - all designed to contribute to a reduction in costs and administrative burdens for all border users. The greatest impact on administrative burden will come from …
HM Treasury
26
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 planned for the end of the transition period. The NAO …
Government response. 7: PAC conclusion: 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. 7: PAC recommendation: Government should write to the …
HM Treasury
27
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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 in January 2019, but the project has been delayed and …
Government response. 7: PAC conclusion: 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. 7: PAC recommendation: Government should write to the …
HM Treasury
28
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 8: PAC conclusion: Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved. 8: PAC recommendation: Government should continue its efforts to resolve the challenges of the Protocol and ensure that departments are ready to …
HM Treasury
29
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 8: PAC conclusion: Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved. 8: PAC recommendation: Government should continue its efforts to resolve the challenges of the Protocol and ensure that departments are ready to …
HM Treasury
30
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 8: PAC conclusion: Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved. 8: PAC recommendation: Government should continue its efforts to resolve the challenges of the Protocol and ensure that departments are ready to …
HM Treasury
31
Conclusion
Thirty-Sixth Report - EU Exit: UK Borde…
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. 8: PAC conclusion: Businesses have faced challenges operating under the Northern Ireland Protocol which need to be resolved. 8: PAC recommendation: Government should continue its efforts to resolve the challenges of the Protocol and ensure that departments are ready to …
HM Treasury