NAO report raises concern over government work on EU Exit

Date : 13 November 2020

The National Audit Office (NAO) has issued a new report on the government’s work in preparing for EU Exit, the latest in a series.

Based on the position as of 30 October 2020, the NAO acknowledges progress made in preparing for EU Exit, which has gone ahead in spite of the formidable challenge raised by Coronavirus.

However, work in many areas remains incomplete and NAO remains concerned that the UK will not be ready for the change to new trading arrangements on 01 January 2021. Many issues remain outstanding, including:

  • The Goods Vehicle Movement System (GVMS) needed to facilitate transit across the UK is incomplete and operator readiness to use it is thought to be low
  • Development of inland sites for processing vehicles and loads away from the border is unlikely to be completed in time
  • It is not clear that government and third-party IT will be fully integrated, tested and ready to go on 01st January 2021
  • Customs intermediaries – expert advisors who assist traders in moving goods over borders – are not thought to have sufficient capacity to cope with demand
  • Delivery of the Check an HGV IS Ready To Cross The Border system is incomplete and it is not certain that hauliers will be ready to use it properly
  • Trader readiness for EU border controls is thought to be low – 40% to 70% of outgoing vehicles are expected to be unprepared for EU border controls after Exit

Problems with transit (ie: moving goods across the UK en route to other markets) may be of particular concern to businesses in Ireland, since deliveries from Europe to Ireland often make use of Great Britain as a “land bridge”.

Delivery of the Northern Ireland Protocol (NIP) is seen as especially high-risk by NAO, due to the technical and political complexity. Negotiation of border arrangements here is ongoing, via the joint EU / UK committee (a separate body of work to the main trade talks). Issues include:

  • Technical difficulties implementing tax arrangements, especially the possible “dual-tariff” system
  • It will not be possible to deliver SPS checks on food arriving in Northern Ireland by 01st January 2021
  • Some elements of the NIP are dependent on the final deal with the EU, which increases uncertainty
  • Launch of the UK’s Internal Markets Bill has added to complexity and political tension
  • Little time remains to fully mobilise the Trader Support Service (TSS)

Looking beyond January 2021, implementation of UK border controls is expected to be complete by July 2021 but, again, NAO is concerned that meeting this deadline will be extremely difficult to meet.

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