Trade with the EU: Non-tariff Barriers

Cabinet Office – in the House of Commons on 25th March 2021.

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Photo of Alex Cunningham Alex Cunningham Shadow Minister (Justice)

What steps he is taking to support businesses subject to non-tariff barriers to trade with the EU.

Photo of Mohammad Yasin Mohammad Yasin Labour, Bedford

What steps he is taking to support businesses subject to non-tariff barriers to trade with the EU.

Photo of Jeff Smith Jeff Smith Opposition Whip (Commons)

What steps he is taking to support businesses subject to non-tariff barriers to trade with the EU.

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury

What recent progress he has made on securing frictionless access for UK goods to the EU; and if he will make a statement.

Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs)

What steps he is taking to support manufacturers subject to non-tariff barriers to trade with the EU.

Photo of Margaret Ferrier Margaret Ferrier Independent, Rutherglen and Hamilton West

What steps the Government are taking to simplify export procedures to the EU for UK manufacturers.

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

Our trade and co-operation agreement with the EU provides for 100% tariff-free and quota-free access to each other’s markets—the first trade agreement in the world to do so. We are working closely with business, including manufacturing, to minimise any potential disruption.

Photo of Alex Cunningham Alex Cunningham Shadow Minister (Justice)

I wrote to the Minister six weeks ago about my constituent Graham Leggett, who said his worst fears had come true, and shared the concerns of a local freight operator who said that Brexit

“is a far bigger disaster than the huge disaster that I predicted.”

Mr Leggett imports materials to sell across the UK and EU, but now finds it near impossible to arrange exports because he does not have a physical operation in the EU. The impact of paperwork—which he has in order—and extra charges has been catastrophic for his business, 60% of which is with the EU, and it appears that his and other businesses will go bust. This is more than a hiccup or teething problem. What message and help does the Minister have for Mr Leggett?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

I am sorry to hear that that business is having ongoing difficulties and that other businesses are too. Frictionless trade would have required regulatory alignment with the EU, which would have undermined our own autonomy in that area and our sovereignty as an independent trading nation. That was not a price that we were prepared to pay. However, we do recognise that these are ongoing difficulties. I would be very happy to look at the individual case. We will be bringing forward further practical measures to address these issues and to provide business with more support.

Photo of Mohammad Yasin Mohammad Yasin Labour, Bedford

Bedfordshire chamber of commerce is doing an excellent job helping businesses in Bedford and Kempston to cope with the significant challenges that the Prime Minister’s Brexit deal has imposed on them. Businesses are in shock, trying to overcome the new and complex operational challenges around rules of origin, unexpected tariffs, VAT implications and the vast swathes of logistical paperwork. The Minister needs to understand that these are not just teething problems. Will she attend a roundtable with Bedfordshire chamber of commerce to hear the real experiences of small and medium-sized enterprises that do not know whether they will survive this disruption?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

I thank the hon. Gentleman for that offer. I am always happy to meet businesses. My noble Friend Lord Frost and I are looking at ways that we can gather information more swiftly and in real time from businesses that are facing difficulties. I would be very happy to follow up with the hon. Gentleman after this session.

Photo of Jeff Smith Jeff Smith Opposition Whip (Commons)

Unicorn Grocery in Chorlton tells me that

“the notion that no tariffs means no problem is not the case at all. We still have to deal with agent fees, phytosanitary certificates and organic certificates. The admin fees are the same whether it’s a box of broccoli or a pallet of broccoli.”

These barriers are going to cost Unicorn £170,000 a year. What are the Government going to do to reduce the administrative burden, or support the small businesses that are disproportionately affected?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

We have already provided financial support to compensate sectors that are suffering particular issues. We have also put in place a framework whereby we are able to work through these problems. While we do that, we are obviously looking at what we can do to mitigate and reduce prospective burdens that other businesses might be facing, such as stretching out the timetable by which people would have to comply with other rules and regulations. Again, I would be very happy to look at any specific cases, and that offer is to all Members.

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury

At the last Cabinet Office questions, I mentioned that a lorry from my constituency was unnecessarily detained in France for 12 hours. The Cabinet Office took that up with vigour. The Chancellor of the Duchy of Lancaster really went about it; I thank him for that and congratulate him on that work. Is the Minister making assessments of any other lorries that are unnecessarily held up as they try to get their goods across the continent, since of course frictionless trade benefits not just this country but our friends on the continent as well?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

I thank my hon. Friend for his thanks and praise to the Chancellor of the Duchy of Lancaster. We look at and vigorously pursue all cases that Members raise with us to ensure that such businesses are being supported in every way. What this case shows is that, as well as some genuine issues that need to be worked through with our partners in the EU and with member states on a bilateral basis, there are some issues that are purely related to people not understanding the processes or implementing them incorrectly. That has caused a large share of the difficulties that we have seen, but those issues are being resolved. I am very pleased that we were able to help in my hon. Friend’s case.

Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs)

Like many on the Opposition Benches, I believe that Ministers must be held to account for the commitments they made to British businesses and industry during the Brexit negotiations, so can the Minister outline what discussions she has had with the Welsh Government about protecting the businesses and livelihoods in Newport West that are paying the price for this Government’s bad deal?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

I have had a very large number of discussions with the Welsh Government, and also with officials there, with regard to a whole raft of issues related to our leaving the EU, and I will continue to do so in my new role.

Photo of Margaret Ferrier Margaret Ferrier Independent, Rutherglen and Hamilton West

The Road Haulage Association has highlighted that UK exports to the EU will not recover until summer at the earliest due to a shortage of customs agents. The industry estimates that we need 30,000 customs agents for the whole of the UK, and we are presently well short of that target. Will the Minister delineate what steps are currently being taken to meet that target?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

The original assumptions that were made about numbers of people that we would need either in customs or of vets, for example, were overestimated, because having looked at it we now have a much clearer understanding of what is actually required. We have obviously, through securing this agreement, been able to mitigate a lot of those things. A great deal of these things are, as I say, about people not understanding how things should be implemented, so a large part of our work is about ensuring that businesses, agents and others understand how these processes need to be operating. With the problems that genuinely remain, we now have a framework in place where we can work through those things.

Photo of Jack Dromey Jack Dromey Shadow Minister (Cabinet Office)

The Food and Drink Federation reported this week that exports are down by 75%, salmon has collapsed by 98%, and beef is down by 91%. The industry is suffering a total loss of £750 million, and much of that collapse is down to the bundles of red tape introduced by the Government’s Brexit deal. Indeed, the British Meat Processors Association has said that the extra paperwork will cost its members £120 million a year. This is not what British business was promised by the Government. What do the Government now propose to do to help the industry though a crisis not of its own making but which threatens jobs, livelihoods and indeed businesses up and down our country?

Photo of Penny Mordaunt Penny Mordaunt Paymaster General

Our management information shows that overall ro-ro freight traffic between the UK and the EU is now back to normal levels for this time of year. That is, in very great part, due to the hard work put in by traders and hauliers to prepare for the end of the transition period and to work through the new things that they are having to do. I would point the hon. Gentleman to the deal that we secured and the framework that we have put in place to agree to trade facilitations going forward, including potential reductions in the frequency of import checks where that is justified. It is in both parties’ interests that we do that. That is how we will be resolving these remaining issues. Our track record since we left the EU shows that, where further support, either financial or in other ways, is needed for sectors, we will do that.