What Idiot is Blocking Imports From the EU

You may recall being told that the EU was over-regulated but when we left, all that would be shed? In reality, our government is loading those over-regulated EU goods coming into the UK with a whole lot of our own. Allegedly to comply with World Trade Organization (WTO) rules, the UK is required to apply UK devised import controls on goods arriving from the EU in a way that is no more favourable than it does on goods arriving from the rest of the world. Imports are slowed, ports are blocked, bureaucracy is multiplied and the costs to British consumers are raised, compounding the inflation we are already suffering.   

Worse still, the out-of-control Whitehall bureaucracy cannot decide what controls it wants and is keeping everyone guessing. The 36th report of the Public Accounts Committee chastises the government for being unable to specify the new systems and paperwork, or even where inspections should take place, but they have missed the point.  Why do these goods need and import controls, delay, inspection and paperwork at all? 

The Committee cites evidence “that even though full import controls have not yet been introduced into the UK, the new formalities and costs that have [already] been introduced make it more expensive and complicated to trade between the UK and EU.” (para 9) “Office for National Statistics (ONS) data for the UK’s total trade in goods with the EU (exports plus imports) show there was a 23% and 13% reduction in Quarter (Q) 1 2021 and Q2 2021 respectively against Q4 2020.” (para 8) The potential Get Out of Jail card, i.e. allowing minimal blockages is if the “differences are justified by one of the exceptions to the Most Favoured Nation rule as set out in the WTO treaties.” (para 3) 

We were led to understand that the EU-UK Trade and Cooperation agreement (TCA) did establish the EU and UK as mutually “most-favoured-nations” but on re-inspection it may not do that. “Most-favoured-nation” is mentioned 65 times in the TCA but they seem to be more about mutually being “no less favoured” than being “most favoured” in which case the UK’s import bureaucracy for goods from the EU has to comply with bog standard WTO rules as distinct from genuinely free trade.  Whichever way you skin the cat, some idiot in Whitehall is responsible for either negotiating a TCA which is pointless and misleading us in the process or now failing to take advantage of the open borders to which our businesses are entitled and creating a wholly unnecessary bureaucracy. 

We cannot do anything much about the rules the EU creates for imports from the UK since that, ultimately, is their business.  But what happened to the sovereignty over our own borders we were told the UK would regain?  And since import bureaucracies benefit neither the EU nor the UK why do we not use the most-favoured-nation rules to trade them away even now, especially as the UK still have not set them up (Northern Ireland apart).  The truth seems to be that we are ruled by civil servants who just love making life difficult and expensive for those contributing to our economy. 

The Public Accounts Committee grumbles that the new UK import controls which should be in place by now have been postponed: “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 three times and now intends to introduce them in phases between January 2022 and November 2022.” (Conclusion 4)  Of course, January 2022 has come and gone, and no visible progress has been made.  “By October 2021, only 42 of 5,000 users had moved across.” (Conclusion 8) HMRC excuses itself on the basis that it not only has to train UK importers, but also the 27 EU member states exporting to the UK. No wonder no one in HMRC has time to answer the phone, or prevent billions of fraudulent takes from the Treasury, when they have to rush around Europe training foreigners. 

But that raises a more interesting point: these controls should have been in place over two years ago but we have managed without some of them and probably could have been better off without any of them.  That being the case, why do we not postpone all of them indefinitely? 

The answer, of course, is that we are ruled by idiots and those that should be ruling them are enjoying tea parties at Number 10. Let us hope that the appointment of Mr Jacob Rees-Mogg will bring sanity.  The simple truth is that products from countries with whom we have shared common standards for nearly 50 years no more need import controls, than imports from Wales into England. As and when significant differences emerge, special, targeted checks can apply but not the whole shebang. 

“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. This set out how the government would improve coordination between government departments and agencies at the border; reduce duplicative asks for data; and make greater use of modern, digital and simple processes.” (para 23) The government’s 2020 paper sets out six unworldly “transformations” of which the last is a good example: “Shape the future development of borders worldwide, to promote the UK’s interests and facilitate end-to-end trade and travel.” The world’s most effective border is not defined and the Committee clearly rightly regards the whole paper as a joke. It drily notes that the government’s track record on large IT systems is not good. What is “effective”?  The least burdensome border is no border at all but that is the very opposite of what the bureaucrats are trying to achieve. 

The one area where some form of border control is necessary is VAT. When the UK was part of the EU, each member state pocketed the VAT it collected and refunded what was due, no questions asked. No VAT was charged or refunded at borders. That is still true for goods moving between the Province and the EU as Northern Ireland is treated as part of the EU for VAT purposes. Goods now entering Great Britain from the EU (and the Province) pay import VAT and vice versa. Of course, the negotiators of the TCA should have allowed the old rules to continue as part of the TCA until VAT rates diverged materially, but…

Even if all these controls are necessary, the manner of their introduction is incompetent: the Public Accounts Committee says “We also note the potential [regulatory and fiscal] risks caused by delays putting in place the necessary permanent infrastructure: for example, until the Dover White Cliffs site becomes operational in 2023 trucks arriving in Dover that are carrying goods selected for physical checks will have to travel 60 miles to Ebbsfleet. The further the inland sites are from the ports, the greater the risk that goods could be offloaded on the way. HMRC agreed it would be ideal to have the infrastructure at the port itself and goods controlled at the port but said that it was not possible.” (Conclusion 6).  Traders are expected to comply with all these new rules by the end of the year but they do not know what they will be, still less how to comply. 

They should all be postponed five years to sift the necessary from the unnecessary with full trader consultation, publish the net requirement and then give traders time to adapt.