Preparing for the end of the Transition Period Contents

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2Trade in goods

The Border

Exporting to the EU

6.From 1 January 2021 the EU is expected to apply the Union Customs Code and implement all the required checks at the GB-EU border and, so far, there have been no legislative proposals to suggest otherwise.4 As Michel Barnier, the EU’s chief negotiator, told us in June:

Whatever happens, there will be a change. It will not be business as usual, whatever happens. This change is created by Brexit, so I suggest—this is what we will be doing on the EU side—that we need to step up our preparations for the change which, whatever happens, is going to come about on 1 January 2021, in particular in terms of checks on goods going from one side to the other.5

7.This is because the UK will be a third country outside the EU’s single market and customs union, just as the EU and its member states will be outside the UK’s internal market and customs rules. Irrespective of what happens in the negotiations on the UK’s future relationship with the EU, UK businesses and traders who want to export goods into the EU customs union will need:

• an Economic Operators Registration & Identification (EORI) number;
• the commodity code for the goods they are exporting - this identifies how much duty to pay and if they need an import licence;
• to declare the imports to EU customs (Entry Summary Declaration) - most businesses hire someone to deal with customs and to transport their goods from overseas;
• to pay VAT and duty–they will need to work out the value of the goods.6

8.The checks at the EU border concern:

• Customs declarations – UK export declarations and EU import declarations.
• Custom duties (tariffs) and VAT – if applicable, tariffs and import VAT will be payable at the time of import, unless traders are eligible to defer payments.
• Safety and security declarations – a UK exit summary declaration (or combined fiscal and safety and security declaration) and EU entry summary declaration will be needed.
• Checks required by international conventions – some goods are more likely to be associated with smuggling or organised crime and so are subject to additional border requirements, outlined in international agreements.
• Sanitary and phytosanitary (SPS) checks – live animals, products of animal origin and some plants and other agri-food products will have to enter the EU via Border Control Posts, where they will be subject to additional checks to ensure they comply with food safety and biosecurity regulations.7 A UK Export Health Certificate will also be required.
• Excise goods – such as on tobacco and alcohol, which will be subject to the rules applied by the importing EU member state.
• Other controlled goods – potentially hazardous goods, such as chemicals, firearms, nuclear material and pharmaceuticals are also subject to additional formalities, including certification and physical inspections.8

9.Although the EU is expected to apply all the required checks under the Union Customs Code, the European Commission has proposed unilateral contingency measures for road connectivity if there is no agreement on the future relationship. Along with measures concerning aviation and fisheries, on 10 December the European Commission adopted a proposal for a Regulation covering basic connectivity with regard to both road freight and road passenger transport for six months after the end of the transition period, so long as the UK Government makes reciprocal arrangements for EU hauliers in the UK.9 The European Commission has offered this with the intention of easing road traffic flows across the border. The European Commission has also stated it will work with member states to ensure that any possible future national contingency measures “do not fragment or undermine the Single Market”.10

Infrastructure

10.In July 2020, the Government published its Border Operating Model (BOM), giving details on the processes for moving goods between the GB and the EU after transition.11 It included information on the infrastructure needed at ports, airports and railway terminals, and Government support to ensure the infrastructure is in place. Where physical space was not available at the port, these would be built inland. The UK is phasing import controls over six months and so some physical structures and resources may not be needed until July 2021.

11.However, the BOM states that there will be infrastructure needed for January 2021, for certain compliance checks and issuing of documents relating to the Common Transit Convention, Carnet processes for temporary import/exports,12 CITES13 permits procedures, and “Traffic management processes–lorry holding capacity for use in the event of disruption”.14 Inland sites to be ready for 1 January 2021 include Ebbsfleet, Sevington and Waterbrook (both near Ashford), in Kent; North Weald, Essex; Warrington, Cheshire; and Birmingham airport. There are also plans to use Manston airport, in Kent, as a “back-up lorry holding facility” in the event of traffic disruption.15 The UK Government is working with the Welsh and Scottish governments to confirm the infrastructure requirements for Wales and Scotland. However, when representatives of the Scottish and Welsh Governments gave evidence on 15 September 2020, Mike Russell MSP, Cabinet Secretary for the Constitution, Europe and External Affairs, Scottish Government, told us that there had been no preparation put in by the UK Government at Cairnryan. He said that it had been impossible to get any information that would allow the Scottish Government to make sensible decisions and to see investment take place.16 Jeremy Miles MS, Counsel General and Minister for European Transition, Welsh Government, told us that in respect of Holyhead the Welsh Government were still awaiting the information they needed about traffic modelling across the UK and the most recent reasonable worst case scenario.17

12.As to whether the sites will be ready in time, on 23 November 2020, Duncan Buchanan, Director of Policy for England and Wales, Road Haulage Association, said that he understood that Sevington will be ready, although he offered a note of caution because “we are entering December and a lot of things could happen to knock that off. It also depends on what you mean by ready.”18 Mr Buchanan continued

There is another aspect about some of these sites. It is not completely clear how the customs processes will operate at the sites. Bear in mind that we are six weeks away from this actually happening. We should not be in a situation where there is lack of clarity about who will be doing what at the sites. That is not a sustainable position for very much longer. We need clarity about who will be working at the sites, what functions are going to be taken at each of the sites and what you do when something goes wrong. As sure as anything, things are going to go wrong.19

Tim Reardon, Head of EU Exit at the Port of Dover, said that it was important that there was “an array of sites across that network, not one or two in a couple of locations” to provide resilience in case one is unreachable on a particular day, that “Those sites are needed and they are needed soon”, and that

It is also important that every site is capable of handling every lorry, regardless of what is in it, and that hauliers are free to direct their vehicles to attend whichever site is convenient for the journey they are on. Clearly, one of the most important ways to avoid increasing congestion is to enable lorries to be attended to where they already are, rather than requiring them to drive even further on the road network to attend a site that is a significant diversion from their existing journey.20

In order to reduce the number of unprepared lorries entering Kent the Government has introduced the ‘check an HGV is ready to cross the border’ service (see section on IT below).21 This allows hauliers planning to cross the Short Straits to apply for a Kent Access Permit, without which they should not enter the county.

13.Apart from facilities to carry out compliance checks, the locations are part of the traffic management proposals to try and reduce pressure on the Port of Dover and Eurotunnel. Nick Harris, Operations Executive Director, Highways England, explained the plan for Kent if traffic started to build outside Dover and Eurotunnel, Operation Brock on the M20, diverting traffic towards Manston, and then:

The final phase, which gives us additional holding capacity, will be to use Manston and Sevington as holding areas for freight, Manston for Dover-bound traffic and Sevington for Eurotunnel-bound traffic. In total, that gives us capacity for more than 8,000 trucks across all those elements.22

14.Some of this planning relates to pre-existing plans to manage traffic in Kent because it has experience of temporary disruptions, including bad weather in the channel, high winds, and technical failures on the vessels.23 Tim Reardon, Port of Dover, said:

The issue as we look ahead to next year is a change to border processes that makes getting lorries through the port and out of the country more complex than it is now. The key challenge is to ensure that all vehicles, by the time they arrive at the border, have all the documentation and have made all the declarations they need to get through the border, and therefore do not create any disruption or congestion that might cause the activation of any of the existing traffic management processes.24

15.In addition, there will be a route—called “fish and chicks”—where hauliers carrying consignments of live/fresh fish and day-old chicks for export, can pick up a permit at Ebbsfleet in order to be prioritised to the port if there are queues near Dover.25 The fish and chicks haulier would still need a Kent Access Permit.26

16.As part of its preparations for the end of transition, the Government announced £470 million to fund the infrastructure necessary for new customs procedures. This included a £200 million Port Infrastructure Fund, in order that ports with the space to build new border infrastructure on site, can handle new customs requirements under the new BOM.27 In answer to a question about the Port Infrastructure Fund on 16 November 2020, Tim Morris, Chief Executive, UK Major Ports Group, said

The short answer is that it is too early to tell. The bids have gone in from the ports for the port infrastructure element of the fund, which was £200 million of the £470 million. We do not yet know whether they have been successful in their bids, and to what extent they have been successful, let alone laying concrete or putting spades into the ground. We cannot tell yet. An area of significant concern is the fact that we already know that that element of the fund is significantly oversubscribed. More ports have put in bids to a higher financial amount than the facility that is there.28

17.Tim Reardon, from the Port of Dover, said on 23 November that Dover had not received a response to their bid to the Port Infrastructure Fund. The bid was for infrastructure to accommodate changes to French passport and French customs controls as of 1 January 2021, and to enable a lorry to physically leave the port if it is rejected for either.29 He said

The sooner we receive funding from the Government to start building, the sooner the infrastructure will be ready. Clearly, major civil works will not be ready for 1 January next year, nor even for 1 July in the summer, but the sooner we receive the funding, the sooner the work can start and the sooner it will be finished.30

The National Audit Office (NAO) pointed out that it was difficult to know where to place resources until there was clarity on the number and location of inland sites and ports that need additional facilities, and that this is partly dependent on which ports have been awarded funds from the Port Infrastructure Fund. On 16 December 2020, it was reported that the £200 million Port Infrastructure Fund had been oversubscribed by bids totalling £450 million. This could mean some ports receive much less than they considered necessary and leaves little time to seek funding from elsewhere.31

18.We note the work the Government has done to develop the Border Operating Model and the steps it has taken to build some of the physical infrastructure needed for the Border Operating Model to work. This has been a complex undertaking requiring careful coordination and collaboration across departments and with local government, the devolved administrations, businesses and traders, and the logistics sector. The new infrastructure and accompanying traffic management plans are needed from 1 January 2021 whether there is an agreement on the UK’s future relationship with the EU or not. We are concerned that some decisions on infrastructure have been taken too late, such as where the inland facilities for Holyhead and Cairnryan will be located and decisions on bids to the Port Infrastructure Fund to enable ports to carry out the necessary building work. We are also concerned about the overall state of readiness. It is important that the Government engages fully with the devolved governments and has robust contingency plans to deal with whatever happens after 1 January. We welcome the European Commission’s proposals on 10 December 2020, in the event of no deal, for temporary rules on road freight and road passenger transport provided the UK reciprocates, and we urge the UK Government to do so.

IT systems

19.Leaving the transition period will require existing IT systems to be upgraded and new IT systems to be developed. According to the NAO, those required for 1 January comprise:32

20.Our witnesses were particularly interested in the Goods Vehicle Movement System (GVMS), and the ‘check an HGV is ready to cross the border’ service. Robert Hardy, Founder of Customs Clearance Consortium, was enthusiastic about the possibilities of the GVMS, stating:

I love it. It is really necessary, because it almost takes the driver and this wad of paperwork, with movement reference numbers, out of the frame. If he has a GMR, a Goods Movement Reference, created by the GVMS system, then he is good to go, basically, or at least he is good to go on one side of the border.33

However, as Dr Anna Jerzewska, Director of the Trade & Borders consultancy, noted:

The number of IT systems that need to be ready by 1 January in one way or another is quite concerning.34

21.Elizabeth de Jong, Director of Policy at Logistics UK, explained that the ‘check an HGV is ready to cross the border’ service (formerly known as the Smart Freight Service) was

… a self-declaration system. It is a series of simple questions for the driver. It is very important that they fill these in and they are confident they then have the paperwork in order to self-declare that they do [ … ] When you have filled it in, you will be either amber, red or green. Green means you can have an access permit should you be going to Kent, for example. That will allow you to be able to travel to the border without being stopped.35

22.Hauliers without a Kent Access Permit face a £300 fine. Using Driver and Vehicle Standards Agency data, matched with that from ANPR36 cameras on the M20 and the M2, the police and Driver and Vehicle Standards Agency enforcement officers will be able to identify those hauliers without a Kent Access Permit, and pull them over at strategic points in the network. Claire Nix, Strategic Commander, Operation Blythe (EU transition), Kent Police, said that “any enforcement will be done proportionately”.37 The Government is also developing contingency measures in the event that the ‘check an HGV is ready to cross the border’ service is unavailable, e.g. “due to post-deployment IT failure”.38

23.The successor to the HMRC CHIEF (Customs Handling of Import and Export Freight) system, called CDS (Customs Declaration Service), has been going through development in order to manage the expansion from 60 million declarations a year to an estimated 270 million declarations a year. As CDS is scaled up to be able to manage the increased volume, HMRC now plans to run CHIEF for Great Britain customs from January 2021, and CDS as its customs system for Northern Ireland.39 Many traders use commercial software that then interacts with the HMRC systems. On 11 November 2020, Stephen Bartlett, Chairman, Association of Freight Software Suppliers, told us:

We have been expressing our concerns to HMRC for some time now about the readiness for CDS for the beginning of next year. CDS will be the de facto system for all shipments to Northern Ireland. The problem we have is that a number of the changes and additions to functionality that we need to make it a workable system are being delivered to us by the end of November and the beginning of December. That gives us little to no time to test these interfaces and test that the system works, and even less time to actually deploy this and roll it out to all our customers. We are very worried because it is very much an unproven system.40

24.Government ministers and civil servants appear increasingly confident that these systems will be in place by 1 January. Alex Chisholm, Permanent Secretary at the Cabinet Office, told the Public Accounts Committee on 23 November that:

all the areas within the Government’s own responsibility that had been at red have now moved to amber, which means we think we will be ready for the end of the year. That applies not only to IT systems, [ … ] but to those key bits of infrastructure that, even a month ago, or when the NAO were doing their work, there were three cases where in our view inland sites might not have been ready by 1 January but, due to great efforts, we are now confident that they will be.41

25.This is in contrast to the NAO warning last month that “there is little time for ports and other third parties to integrate their systems and processes with new or changed government systems, and contingency plans may need to be invoked in some areas”.42 Ian Davies, head of UK port authorities for Stena Line Ports UK, which includes Holyhead, said

All ports and ferry companies on the Irish sea—we have a choice of operating model—operate the preboarding notification system, so at least we have the same system, but as yet of course those systems are not fully developed, are not fully integrated into the ferry companies’ check-in systems and have not been tested, so we are reliant on speed of development and integration. We feel that we are on track, but we are in the hands of the development. As a ferry and a port operator, we are looking at not only the UK systems, but we are having to look at the Irish and Dutch systems, to make sure we get integration into those as well. So from an IT resource, that is quite a drain on our business and, as yet, we have been unable to check those systems.43

26.Complex, large IT systems are always difficult to deliver, and getting Government IT systems ready for the end of the transition period was always going to be challenging. The need to develop some new systems has complicated matters. The Protocol on Ireland/Northern Ireland creates additional complexity; for example, it will require the use of the new Customs Declaration Service because it can handle two different tariff codes for the same product. We note that there is a reasonably high level of confidence that the changes the Government needed to make will be made on time, but we are concerned that some of these changes are coming so close to the end of the transition period that business and traders will not have had enough time to update their own in-house systems. They work with more than just the UK Government’s systems; they must be trained on and work with IT systems at ports and with those of the countries they are exporting to or importing from. We are aware that it will take time to train users on both the Government systems and changes to any in-house systems; this training is vital if the whole system for moving goods is to work. Late delivery of IT systems makes it difficult for this to take place before the end of the transition period. We are also concerned that there has not been enough time to test how well all the systems work together. The Government should have a plan in place now so that it can act early in the New Year to deal with any problems. We will watch to see how the situation develops in the first few weeks of January.

Importing from the EU

27.On 12 June 2020, the UK Government announced that, as the UK would have the autonomy to introduce new border controls and procedures from 1 January 2021, it would do so in three stages. We welcomed this announcement in our previous Report. The Government said that it recognised the impact that Covid-19 had had on businesses’ ability to prepare, and that this “flexible and pragmatic approach will give industry extra time to make necessary arrangements.”44 The full range of checks will be in place by the end of June 2021.45

28.The phased approach will allow extra time for the construction of any infrastructure needed for the UK to carry out the necessary import procedures, bearing in mind that there is not enough space at Dover for such checks.46 On 16 November 2020, Tim Morris, Chief Executive, UK Major Ports Group, said that

Where expanded facilities are necessary, the short answer is that we do not quite know yet whether the infrastructure will be ready in time.47

He said that the Government was expected to respond to bids to Port Infrastructure Fund bids at “the end of this month or the start of December” which would leave six and a bit months to actually build the border infrastructure, and he noted that “The last substantial Border Control Post that was built in the UK took about 11 months”.48

29.After Dover, the port of Holyhead is the UK’s second busiest ro-ro ferry port though which 1,200 lorries pass each day.49 This includes goods from the Republic of Ireland for GB market and some to use the land-bridge to continental Europe, but also goods moving to and from Northern Ireland.50 On the 1 October 2020, Ian Davies, Head of UK Port Authorities for Stena Line, said that “there is insufficient land to have all the required facilities at Holyhead port, so an inland facility is required” for goods to be checked,” but as yet those facilities do not exist and the site does not exist.”51 In its recent Report on Brexit and trade: implications for Wales, the Welsh Affairs Committee said:

We are deeply concerned that, so close to the end of the transition period, and with not much time left until the staggered controls take effect in July 2021, the decisions on the location of the inland facility for Holyhead Port and the equivalent facilities in South-west Wales has yet to be taken. Even with expedited planning permission, this leaves little time to build, and properly equip, sites which will need to be ready for potentially thousands of checks and processes per day. There is a significant risk that neither North nor South-west Wales will have appropriate inland facilities ready for July 2021, raising important questions about the level of contingency planning that is in place for such an eventuality.52

30.In a Report published on 6 November 2020, the NAO said:

The Government is planning to implement full import controls by July 2021 but there is uncertainty over where the infrastructure and resources will be located, and if they will be ready in time.53

31.The UK is phasing in new SPS procedures on imports from the EU in three stages.54 This may mean little will change at the border on 1 January—physical checks on all high risk live animals and plants will be carried out at the point of destination or other approved premises—but by July 2021, live animals from the EU will be subject to new import controls—including requirement for health certification, import pre-notification, and entry via an established point of entry with an appropriate Border Control Post.55

32.Holyhead has estimated that there could be “between 88,000 and 200,000 SPS checks for goods travelling through Holyhead” but that would depend on the trade agreement with the EU.56 That is not to say that the UK is necessarily fully prepared for changes that will take place on 1 April and 1 July, only that there is still more time for those preparations to be made.

33.The Government was right to phase in import procedures on goods arriving from the EU and, given our earlier recommendation on the UK reciprocating on the European Commission’s proposed no deal contingency measures on road freight and road passenger transport, we urge the EU to reciprocate on the phasing in of import procedures on goods in order to give businesses more time to adapt to the outcome of the very late running negotiations. Nevertheless, full implementation is now only a few months away and, as the last year has proved, new and unexpected challenges may well emerge. The Government must ensure that necessary systems and infrastructure are in place, and businesses are informed of the changes they must make, as soon as possible to ensure that the extra time is not wasted.

Staffing

Customs agents

34.Leaving the transition period will mean more customs paperwork for UK businesses. HMRC has estimated that 200 million additional declarations will be required each year, on top of 50 million that are currently made.57 This will add costs to businesses: Mr Hardy estimated the average cost of a customs declaration at £30.58 Rough industry calculations have suggested that 50,000 new private sector customs agents will be needed to help businesses process these declarations, a figure Mr Gove told us was a “guestimate”.59 Katherine Green, Director-General for Borders and Trade at HMRC, told the Treasury Committee that it was not a number HMRC “use or recognise” and while more agents were needed it was “not necessarily just about recruitment; this is about innovation and the use of technology”.60 Logistics UK said the true figure may be closer to 35,000, although that number could be further reduced by the use of technology.61 That is still a challenging target as we were told only 15,000 or so were in role a year ago, meaning even the most conservative estimates require a tripling of overall capacity.62 When the British International Freight Association, a trade body, surveyed its members in September, it found 64 % where not confident they would have enough staff to meet demand.63 This month Mr Gove told the House that “the latest survey by HMRC shows that there has been a fourfold increase in capacity”, although we note this is not a fourfold increase in staffing, but in “declaration processing capacity” based on industry estimates of demand.64

35.The Government has made £84 million in grants available to businesses to recruit and train new agents and invest in new IT equipment: the latest and largest tranche of funding—£50 million—opened to applications in late July.65 Much of this funding appears to have been distributed, although, in October, Lord Agnew, a minister in the Cabinet Office and Treasury, said it was not “enough” and exhorted businesses to move faster.66 Richard Burnett, Chief Executive of the Road Haulage Association, told us limits on state aid had caused problems for some firms, something Lord Agnew acknowledged.67 More generally, Mr Burnett said firms may find it hard to justify expansion at a time when global trade volumes were suppressed due to the pandemic and many of their existing staff were on furlough.68

36.A wider concern was whether more staff would solve the problem.69 Mr Hardy said:

training worries me. There is some very good customs training through the UK Customs Academy [ … ] but buying a cookbook does not make you a Michelin-starred chef. It just means you have a cookbook.70

Dr Jerzewska explained:

it takes years to train them properly. [ … ] Customs classification is such a complex issue. How do you prevent errors from taking place even on this very initial level within the first six months?71

Although other witnesses were more optimistic there would be plenty of roles that new recruits could perform.72

Vets

37.From 1 January UK exporters to the EU will require an Export Health Certificate (EHC) signed by an Official Veterinarian to transport animals, germplasm and products of animal origin.73 Aodhán Connolly, Director of the Northern Ireland Retail Consortium, told us Export Health Certificates could cost between £56 and £200 per item.74 This includes meat, milk and pet food as well as composite products like pizzas and quiches. Composite products are particularly complex and may require multiple EHCs. For example, a cheese and ham sandwich will require a certificate for both the cheese and ham to provide an audit trail of each individual ingredient. The British Veterinary Association told us they had concerns over insufficient capacity within the profession; the Migration Advisory Committee noted the vacancy rate had been increasing in recent years.75 The Government has provided £300,000 to support training and has reduced the number of vets needed by authorising ‘certified support officers’ to complete some paperwork, although it is still making contingency plans for state-employed vets to step in if necessary.76

38.Effective operation of the new Border Operating Model depends on more than IT systems and physical infrastructure. It needs people. Outside the Single Market and Customs Union, businesses and traders will be reliant on customs intermediaries to help them get their paperwork right. It will be impossible to comply with the requirements on plant and animal health, and food and feed safety without the vets and other professionals who are needed to carry out checks and certify goods. We are very concerned that any delays that arise because we have not got the right people in the right place at the right time will make it harder for UK businesses to trade with our European neighbours. The Government must stand ready to address any shortages in personnel that cause delays once the transition period has ended, i.e. in just over two weeks’ time.

Business readiness

Informing businesses and traders

39.In our first Report, we said that the Government’s objective should be to deliver certainty, stability, and predictability for businesses as the UK prepared to leave the transition period. A key part of this is communicating to businesses the changes that are to take place, and the steps they need to take. To this end the Government has launched a series of campaigns: July’s “Check, Change, Go”; September’s “The UK’s New Start” and “Keep Business Moving”, and October’s “Time is running out”.77 HMRC has also written to the 200,000 VAT-registered businesses that trade with the EU and published a new Hauliers Handbook, although this was not released until mid-November and further iterations will likely be required if and when the terms of the future UK/EU relationship have been agreed.78

40.Some witnesses expressed concerns about the efficacy of these campaigns.79 In September Mr Burnett said that the “campaign is not driving people to urgently look at the processes they need to pick up. [ … ] The customs brokers I am talking to are saying that there is certainly a sense of denial at the moment”.80 He later stressed the importance of reaching foreign hauliers: “probably 85% of the European haulage market”.81 A frequent criticism was that guidance lacked detail.82 Last month, Elizabeth de Jong, Director of Policy at Logistics UK, told us:

The information in it is around, “Something is happening at the end of the year and you need to be ready for it, and it may be too late,” but it does not have a call to action. The information that we need to be ready is very specific information—operational information—and it needs to be clear and in language for people who work in quite regulated environments.83

Preparing for new border processes

41.Any lack of business readiness poses a particular and immediate problem at the border, despite the UK’s decision to stagger the introduction of some new import checks. The NAO has warned that:

There is likely to be significant disruption at the border from 1 January 2021 as many traders and third parties will not be ready for new EU controls.84

42.This accords with the evidence that we have taken, much of which characterises the lack of preparedness as the key risk for the smooth operation of the border from 1 January 2021. The CBI told us that:

At the practical level, for individual firms, preparing for the end of transition has become much more difficult. The medium-term economic effects of coronavirus mean businesses will be dealing with the consequences of the pandemic into the end of the year, coinciding with the crucial period in which they will need to begin implementing for the UK’s new trading relationship with the EU in 2021.85

43.On 11 November, Elizabeth de Jong told us that:

there is a high risk. Earlier I spoke about the need for the driver to have the right paperwork and know what checks are required. Fundamentally, if that is not correct, then we will have the queues. In order to deliver that, we need the traders to deliver all the border documentation through all the new systems, we need the border industry to be ready, and we need the contingency arrangements—the systems information and the infrastructure—in order to prevent those queues. That is going to be very difficult.86

44.In September Mr Hardy told the Committee:

My biggest fear [ … ] and the fear of the Border and Protocol Delivery Group since day one is exports [ … ] The biggest absolute fear is that a truck is sent to Calais and they send it back.[ … ] The tools are there to get it right. The car park in Kent is because we have not got it right. It is of our making. If something arrives in Kent and it is not prepared, it is because we have not prepared it. It is nothing to do with the EU. This is our problem to solve and it has always been our problem to solve.87

45.Delays already take place at the EU’s other external borders. In evidence in 2018, the Committee on Exiting the EU was told that lorries can queue at the EU’s border with Turkey for 30 hours or even “a couple of days”.88 The Government has also acknowledged that business preparedness remains a critical problem. This concern is reflected in the Government’s Reasonable Worst Case Scenario for the post-transition border, published in September. Under this scenario, 40–70 percent of trucks travelling to the EU would not be ready for new border controls, including 30–50 percent of trucks crossings via Dover or the Eurotunnel. This could reduce flow rate to 60–80 percent of normal levels and lead to “queues of ~7,000 port bound trucks in Kent and associated maximum delays of up to two days”.89 The Report notes:

Disruption could be lower in the initial days of January but we would expect sustained disruption to worsen over the first two weeks as freight demand builds. There could be a significant drop in disruption and improvement in flow capacity within the first three months as fewer unready HGVs arrive at the border, although Schengen passport controls at the juxtaposed controls could continue to cause disruption until the French relax checks or add more capacity to undertake checks.90

46.On 8 October Emma Churchill, Director-General of the Border and Protocol Delivery Group at the Cabinet Office, told the Public Accounts Committee that “the critical factor is trader readiness [ … ] that is the single key factor as to whether we might see a disruption at the short straits.”91 In the same session, Jess Glover, Director General for the Transition at the Cabinet Office, said: “step one in getting ready is the understanding that you need to get ready. Right now [ … ] a third of businesses do not even understand that they need to get ready.”92 Lord Agnew was blunter, however, warning businesses they risked ruin if they didn’t abandon their

head-in-the-sand approach [ … ] compounded by what I would call the “quadruple whammy” of two false alarms, so two extensions at the very last minute, followed by Covid and, now, the recession.93

47.Most recently, on 23 November, Alex Chisholm, Permanent Secretary at the Cabinet Office, told the Public Accounts Committee that

It is also not surprising to me that, given there is a need for hundreds of thousands of other organisations—particularly in business—to make some changes, some of those have not yet completed their own preparations. But we are doing everything we possibly can as a Government to try to set out what it is that people need to do to be ready and to provide very active support to encourage and enable them to do so.94

48.While we welcome the Government’s attempts to communicate to businesses the changes that will take place on 1 January, results appear patchy at best. Little time now remains and, in making their preparations, businesses continue to be held back by restrictions imposed to control the spread of Covid-19, a lack of detailed guidance and continued uncertainty over the final terms of the UK-EU future relationship.