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Brexit Bulletin - 11 October 2021
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The last few weeks have seen plenty of discussion around the impacts of Brexit and their political implications. Last Monday, Cabinet Office Minister Lord Frost issued a November deadline for the UK and EU to agree to changes to the Northern Ireland Protocol. He is currently seeking negotiations with the EU over the future of the Protocol, following on from proposals the UK published in July. More on this in the Northern Ireland update below.
Chancellor Rishi Sunak spoke at the Conservative Party Conference of the benefits he sees arising in a post-Brexit UK, including higher wages for workers and increased flexibility for businesses. However, his comments come against a backdrop of severe supply chain disruption, with the haulage industry blaming a combination of post-Brexit immigration policy and COVID-19 impacts. If you’ve been experiencing any problems or disruption, please see our In Focus below, and get in touch with our Senior Economist, Aimie Stone.
Last Tuesday, the European Parliament voted to approve the creation of a new joint assembly between British and EU lawmakers which is meant to help solve post-Brexit issues. The assembly, which will include 35 lawmakers from each side, will monitor the implementation of the EU-UK Trade and Cooperation Agreement and will be briefed on decisions by the Partnership Council, a supervisory body for the trade deal that is co-chaired by European Commission Vice-President Maroš Šefčovič and UK Brexit Minister David Frost. The joint assembly will also be able to make non-binding recommendations for amending the deal.
To keep up to date on the latest issues, please check out our Brexit Hub.
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Driver shortages
A Road Haulage Association (RHA) survey of its members estimates there is now a shortage of more than 100,000 qualified drivers in the UK. According to the ONS, this is owing to an estimated 16,000 fewer EU nationals working as HGV drivers in the year ending March 2021, than in the previous year. There is new bureaucracy preventing a return for EU drivers, including tighter immigration rules and tax changes making it more expensive for drivers from elsewhere in Europe to work or be employed in the UK.
The Government is attempting to address the problem by allowing more foreign workers into the UK from October, as well as bringing in Ministry of Defence examiners to increase the number of HGV driving tests. UK Government has also extended the relaxation on Drivers' Hours rules, which means drivers will be able to increase their daily driving limits until 31 October 2021.
Supply chain disruption
Pandemic border restrictions, distancing requirements and factory closures have all disrupted traditional supply chains over the last year and a half, and it has been speculated that disruption will likely continue through to 2022. Brexit has added to the disruption in the UK and the wider manufacturing sector is suffering from shortages of components and raw materials, hitting production.
Workforce shortages and movements
It has been reported that staff shortages are now affecting almost all parts of the economy. More than a quarter of firms polled on the issue have said that lack of staff was putting pressure on their ability to operate at normal levels. Businesses blamed the pandemic and Brexit for the shortage of overseas workers, impacting their ability to recruit much-needed staff. ADS has also had reports from members about difficulties moving employees between their UK sites and ones in EU member states, with different countries interpreting workforce movement rules in diverging ways.
If you are experiencing any issues related to HGV driver shortages, staff shortages, or the changes in workforce movement rules, please get in touch with our Senior Economist, Aimie Stone.
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Aviation Safety - Maintenance Annex
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ADS is aware of the importance of the UK Government negotiating an additional Maintenance Annex to the Trade and Cooperation Agreement (TCA) signed between the UK and the EU, which came into force following the UK’s exit from the EU. ADS is engaging with the Government and calling for the prioritisation of a Maintenance Annex ahead of the first meeting of the Special Committee on Aviation Safety, expected in November.
We will update ADS members on the progress of the development of a Maintenance Annex as it evolves, and if you have any further input into this topic, please reach out to our Aerospace Policy Adviser, Andy Phillips.
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Back in July the Northern Ireland Secretary of State Brandon Lewis MP delivered a statement on the Government’s approach to the Northern Ireland Protocol. With this was published a new Command Paper, which outlined the renewed balance that the UK Government was seeking that would be “to the benefit of all”. ADS posted a blog on the contents of the Command Paper which can be viewed online.
The EU response to the command paper initially, was to state that whilst conversations with the UK continue, they would not agree to a renegotiation of the Protocol.
In recent weeks, there has been a renewed political focus on the operability and functionality of the Northern Ireland Protocol following reports of business disruption and challenges with new systems.
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There has been speculation from Lord Frost that Article 16 could be invoked at any moment, to protect the UK from what it considers serious economic harm. As it stands, we await a formal response to the command paper from the EU, with hopes that there will be some resolution for businesses and consumers in Northern Ireland.
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Since our last Brexit Bulletin, there is a new Secretary of State for International Trade following a cabinet reshuffle in mid-September. Anne-Marie Trevelyan, the former international development minister, has taken up the role in DIT, replacing Liz Truss who has been promoted to the role of Foreign Secretary.
Negotiations are progressing in relation to the agreement between the UK and Australia with a deal potentially to be signed this autumn. The DIT team has an ongoing focus to pursue a trade deal with India and there was a consultation on priorities for an FTA that took place over the summer.
There is little to update on the UK’s ascension to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as the next steps require the UK to demonstrate compliance with the current arrangements. Talks continue and there is an ambition that negotiations will start properly before the end of the year.
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Customs and Border Update
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Import declaration delays
In September, the UK Government announced the delay of full customs controls on imports to the UK from the EU. Acknowledging the challenges that businesses have faced during the global pandemic and the adjustments that many firms have been required to make, the revised timetable is set to give businesses more time to adjust to new processes. Safety and security declarations on imports will now be required as of 1 July 2022 as opposed to 1 January 2022. There is a recent ADS blog post on this that goes into more detail.
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Good Vehicle Movement Service
At border locations operating a pre-lodgement model and using the Goods Vehicle Movement Service (GMVS) to control goods, pre-lodged declaration references will need to be linked together within a single Goods Movement Record (GMR).
Hauliers that move goods through ports that use the Goods Vehicle Movement Service, should now apply to use the Goods Vehicle Movement Service so that all parties involved are actively able to use the system. GVMS system is due to be in full use by January 2022. More information and a step-by-step guide can be found on gov.uk of how to register to create a Goods Movement Record and for GVMS.
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The Government has published new guidance on Horizon Europe funding, including an updated list of UK national contact points. To apply for most Horizon Europe funding, you must be a consortium, and this must usually be made up of at least three organisations from different countries. You can get in touch with your UK national contact point for advice on how to form a consortium and how to apply for funding.
You may be able to get funding for projects which:
- Involve ground-breaking research or new technologies.
- Create growth in sectors like advanced manufacturing, materials, and space.
- Increase private investment in research.
- Respond to challenges like climate change.
SMEs can also get help from a coach or mentor, for example to improve management skills, create a marketing strategy or raise finance. There are national contact points for a variety of sectors, including civil security and space. Find out more here.
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ADS has submitted a response to the Department for Business, Energy and Industrial Strategy’s consultation ‘Reforming the framework for better regulation’, which sets out five principles that will underpin the government’s approach to regulation to ensure it benefits the British people.
ADS welcomes the Government’s determination to reform its approach to regulatory interventions. Utilising new freedoms to tackle long-standing regulatory barriers will be welcomed by business. However, in many areas of regulation, for example data protection and aviation safety, it remains of critical importance for the UK to align with international and European regulatory standards to preserve the UK’s regulatory reputation, ensure continued global market access and minimise disruption for businesses. You can read the full response in our Members Area here.
ADS is also working on responses to the House of Lords European Affairs Committee’s inquiry into Trade in Goods and the Department for Culture, Media and Sport’s Data consultation. If members would like to give any input or feedback into these responses, please get in touch with our Senior Economist, Aimie Stone.
Members should also be aware of the latest Department of International Trade Consultation on a proposed trade deal with the Gulf Cooperation Council (The GCC comprising of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.) The link to respond to the consultation can be found here. At present ADS is not planning to respond to this unless there is significant member interest.
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HMRC is providing a range of support to customs and international trade customers. ADS has collated a series of slide packs provided by government as part of our useful resources page on the ADS Brexit Hub and gov.uk also has a page dedicated to webinars and videos for organisations that trade with the EU.
Customs & International Trade Helpline – 0300 322 9434
The helpline is the main route in for customers with general customs queries. Capacity has been scaled up following the end of the transition period.
- For GVMS – (details to be published online soon)
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