Imports to the UK plummeted following the end of the Brexit transition period according to official figures, while the government has announced the introduction of additional border checks will be delayed.
The developments come as trade body Make UK called on the government to address “crippling delays” at borders that are raising costs for half of manufacturers.
Goods imported to the UK plummeted by £8.9bn in January, including a £6.6bn fall from the EU, according to the Office for National Statistics (ONS).
The drop was largely seen across machinery, transport equipment, and chemicals, which contributed £2.6bn (30%) to the fall in imports from the EU.
UK goods exported to the EU fell by £5.6bn (40.7%).
The ONS highlighted factors such as disruptions due to the end of the Brexit transition period, consequences of stockpiling in November and December 2020, and reduced demand due to the ongoing impact of the pandemic and the UK national lockdown.
Businesses have been hit by long border delays since new border control rules came into effect on January 1, leading to major procurement challenges, including supply chain disruption and complexities due to the rule of origin.
In response, the UK government has delayed upcoming additional import control requirements, "as disruption caused by COVID has lasted longer than anticipated".
Introduction of new controls have been pushed back “broadly” six months later than originally planned. Most checks are now set to come into effect on 1 January 2022.
Cabinet Office minister Lord David Frost said this would “give traders time to focus on getting back on their feet as the economy opens up after a difficult year … and will allow import businesses to re-establish their trading arrangements”.
Alex Veitch, general manager of public policy at Logistics UK, said: “It is imperative that both government and industry use the extra time provided to ensure the entire supply chain is ready for the introduction of further border controls.”
Make UK said a survey it carried out revealed almost three-quarters (74%) of British manufacturers moving goods have experienced delays in the past three months.
Over a quarter (28%) had delays lasting between one and two weeks, with 51% facing increased costs, 35% losing revenue, and one in five missing out on potential future orders as a result.
Make UK said that “many container ships will not stop in the UK at present, due to delays at British ports… resulting in goods bound for the UK being offloaded in EU ports”. This has caused knock-on effects to production schedules and lead times, and costly reroutes of orders.
Stephen Phipson, CEO at Make UK, urged the UK government to meet with EU partners to mitigate disruptions and “iron out different interpretations of the rules for movement of goods in separate member states”.
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