Govt delays post Brexit import paperwork checks due next month and in July... until October, and into next year
Govt: “we have not seen generalised disruption... however recognise scale and significance of challenges” in adjusting to Brexit changes at same time as Covid impacts:
* pre notification requirements/ export health certificates for animal origin not now required until OCtober
* deferred declaration customs extended Jan 2022
* Safety and Security Declarations Jan 2022
* physical agrioood checks on imports Jan 2022
* live animal checks March 2022
This will come as a huge relief to importing businesses... however some exporting businesses and hauliers were under the impression the threat of reciprocal checks would be used as leverage to get the EU to ease its checks. Won’t happen now until next year.
Government revealing a significant preference to continue to wave through imports that keep supermarket shelves stocked... exporters facing problems with post Brexit non tariff barriers, wont however have relief that their competitors from the EU face the same importing into UK.
Lord Frost: “We will now introduce border controls broadly six months later than planned to give traders time to focus on getting back on their feet as the economy opens up after a difficult year...” 1/2
Frost: “We are confident that this new timetable will allow import businesses to re-establish their trading arrangements after a difficult period due to coronavirus, in the most straightforward and lightest touch way possible.”
Government says its systems and infrastructure would have been ready for July, but it has delayed the checks at request of business recovering from Covid pandemic...
Government has also released the internal management data for February (that I reported on a month ago) to support its argument that UK port RoRo flows (though not necessarily actual trade) are “back to normal” meaning at or above February 2020 levels assets.publishing.service.gov.uk/government/upl…
Retail groups welcomed the move, though contradicted Government suggestion infrastructure would have been ready: BRC: “With many of the key Border Control Posts currently little more than a hole in the ground, the six month easement comes in the nick of time”
British Chambers of Commerce also welcomed the “positive step” but argued UK & EU should now get back around table to thrash out “structural problems” in the deal
Reasonable question about how, effectively, we have got to extra transition period for EU firms importing into UK, but not UK firms exporting to EU... Government’s argument has been that UK firms are now also adapted for global trade, and it can now freely legislate outside of EU
See there’s some chatter on here about whether this violates the UK-EU trade agreement - cant see how it does, and even if it did, sure the EU-based exporters would be delighted about a few months extra without any non tariff barriers, and a year with no checks.
Could be a case to answer if a third party could prove they are not being treated the same - in practice an extension of status quo for a few months during pandemic recession, at a time when the WTO bodies aren’t fully functioning, would seem ignorable...
Monthly figures can be erratic, and the Govt argued yesterday that some of this has normalised in port lorry flow data on February, but even taking all that into account that is still a significant fall. Important to see trend now over next few months.
ONS: “External evidence suggests some of the slower trade for goods in early January 2021 could be attributable to disruption caused by the end of the transition period. In addition, we also need to consider the stronger November and December stockpiling trade figures”
Made point before - issue was EU at first insufficiently protective of its own exports, possibly as a result of listening to some of the bigger pharma companies, not controlling for example even some of the first vaccines it funded... unlike UK with govt funded and brokered AZ-Ox
consequence however of political pressure EU under here - is next time, or if ongoing need for an EU originating vaccine/treatment/component - they’ll find a way to insist on domestic first supply, as UK has... thread from a few weeks back explaining:
In general though, in context of AZ-Ox being distributed via India around developing world at cost price, difficult to sustain argument that UK has been vaccine “nationalist”... perhaps initially vaccine protective....
EU firms have made billions from these exports to ROW.
Former top Treasury mandarin says test & trace “most wasteful and inept” public spending in history - and links acceptance of that in Govt to Bank of England effectively printing the money to fund it...
OBR’s updated traffic data confirm flow of lorries in Dover was in early Feb back to 2020 levels. “normal” says Govt (tho below 18/19 - 6,100 trucks a day) accords with Govt management data, shows worst case scenarios didnt materialise, but hit to actual trade yet to be revealed
But former PM Theresa May had some pretty sharp comments on the Budget -
“Every prospect Brexit will have continued impact in reducing the size of our economy”... expresses concern that the stimulus is entirely capital allowances not R&D tax credits “get on and do something..”
Former Chancellor George Osborne speaking to the IFG very interesting currently defending corporation tax cuts - really big revenue raising comes from VAT, NIC, income tax - “the idea you can raise C-tax with no consequence is a mistake...” before adding “if it does go ahead”...
Osborne revealing to IFG that Cameron overruled his suggestion to introduce an extra two bands of council tax for expensive houses and use the proceeds to cut higher rate of tax to 40p. DC did not want a mansion tax though, and thought 40p taking cuts too far....
Asked Osborne about Sunak turning around decades of orthodoxy on low C-tax rates raising revenue, he replies:
- Everyone assumes that low tax is the driving force of Conservative thinking, but its fiscal responsibility that is the driving force...
World (up 1.4%) and UK (0.9%) upgraded in back of vaccinations, US much more so on back of Biden stimulus (+3.3%)...
But medium term UK biggest hit by end of 2022 in G7...
USA expected to have bigger economy than 2019 projection:
Oecd high frequency data comparison - shows the significant hit from pandemic and lockdowns on UK weighing down the economy - but eg Germany too now about same down
UKs stimulus efforts much smaller vs US and Canada according to Oecd model but a bit bigger than Japan and Eurozone - this may not take latest budget into account, but can’t see that this would change table significantly: