Friday 7 April 2023

BTOM and the WF

The government this week published a draft version of the Border Target Operating Model (BTOM) setting out how it intends to start imposing mandatory checks on imports into the UK this October.  Checks on goods coming in have been repeatedly put off since Brexit because of fears it would lead to even more disruption to highly integrated supply chains. The draft is issued for final consultation. 

It’s quite a polished document and, at 99 pages long probably close to the finished article. A lot of effort has gone into it. I know they have already consulted widely among various stakeholders.

The government has repeatedly delayed bringing in these checks which we are bound to impose on EU imports as we are to all other countries, according to WTO rules. BTOM will begin to take effect in October this year and will all be implemented by 31 October 2024, says the document.

I am convinced it will have to be delayed again. 

Remember this is only a draft, produced after a round of consultations. The final version will be published later at an unknown date when more feedback has been received. The ‘engagement period’ will run for 6 weeks until 19 May. 

Even if this current copy was the final version, it gives stakeholders on both sides of the Channel just six months to prepare, which is not very long. In practice, it’s going to be much less, probably under four months. All the disruption that UK exporters faced in 2021 will now be repeated for EU exporters and UK importers. 

It is billed as a simplified system which will save importers £400 million a year and I'm sure it is, but it's still an extra layer of complexity that hasn't existed for years. There's a handy figure on page 14 to describe it:


Big companies will manage it well. If you're a large EU exporter and the UK market is big and important enough, getting your head around Britain’s new system will be worth doing, even essential. But if you’re only a small company, with limited sales in the UK, you might take a different view.

For an insider's opinion, you should read what Shane Brennan, Chief Executive of the Cold Chain Federation, thinks of it. He's written a piece for UK in a Changing Europe, which includes this 

"If I am a producer of buffalo mozzarella in northern Italy, or of chorizo in western Spain, as of 31 October I will for the first time (possibly ever) be asked to become an exporter, and I must:

  • train myself up on the complex international and UK rules;
  • find a local vet that is willing to certify my goods, at site (at a cost of 200 to 700 euros a time);
  • find a specialist haulier, usually on a lorry carrying goods from other local food producers with the same compliance burdens;
  • employ an agent to ensure the data entries onto the UK’s food import IT system, alongside customs declarations, at maybe 50 to 200 euros a time; and
  • as of January 2024, pay a new border inspection charge of up to £43 irrespective of whether my consignment is physically inspected or not.

These new burdens aggregate up to millions of pounds in friction costs. The reality is that many EU-based food producers will take the decision not to service the UK anymore. That is exactly what happened for as many as a third of the UK-based food producers immediately after 1 January 2021. They will make the practical, logical, choice to divert sales from the UK to the domestic (single) market where there is more than enough demand."

In Logistics Matters, he was even more scathing:

"The Cold Chain Federation argues that the proposals solve none of the real risks facing the post-Brexit food supply chains and will exacerbate shortages and inflation. The proposals will make it more expensive, slower, and more complicated to export products such as meat and dairy from the EU into the UK."

Brennan also says:

"When plans to bring in controls starting from July 2022 were cancelled, we were promised a fundamentally new approach to how the UK would manage its border, that is not what this proposal is. None of the fundamental problems have been solved and business have nowhere near enough time to prepare."

So, that's a NO from the CCF.

Sky's Business Correspondent Paul Kelso also writes on the problems ahead for Dover, comparing the recent chaos for coach passengers to what is coming down the track with BTOM: Dover delays are a lesson in Brexit realities – and they may be about to get worse.

The proposals are for reduced checks compared to the normal EU requirements which, I assume is to show some benefit to leaving or to reduce the burden a bit. You can imagine if there are food safety issues as a result, it will be necessary to tighten things up and move closer to the way Brussels do it.

The Windsor Framework

The UK government has past form on these things which we can look back on. Rishi Sunak said in February that the Windsor Framework which he had just announced, would remove "any sense" of a border between GB and NI. 

Two months on and the people at the heart of it all don't agree, as this letter in The Telegraph explains:

This is from three vastly experienced hauliers. “Sadly, far from being a practical solution, the Framework has cemented a hard border, operating to the most complex set of customs and food and animal safety processes known anywhere in the world.”

There is a pattern emerging here. First, the government publishes something complex and hails it as a ‘breakthrough’ or ‘groundbreaking’ or whatever triumphant adjective/spin you want to apply. Then, stakeholders begin to examine the details and a few days or weeks later, you get the truth or at least a more measured opinion.

The basic problem is that you can’t introduce trade barriers and expect things to carry on as before. We are in uncharted territory here, no country in history has ever voluntarily applied so many trade barriers to itself pretty well overnight (or over any time period for that matter). It was always bound to be painful, difficult and costly.

But the government cannot be honest because Brexit was sold not on it being a long, hard and expensive struggle but as an easy, quick-fix solution, a panacea for every ill with no downsides whatsoever.

The bind it is in is entirely its own fault.

I don’t see how the party as it’s now constituted can ever admit that Brexit has been a terrible mistake without losing all credibility. Labour can’t do it until it’s in power. 

But at least Starmer could then say "Now we’ve seen the figures it’s obvious Brexit must be reversed" or something similar and that is what I expect to happen.  Labour has no ideological commitment to Brexit and it's the obvious answer. Why drive ahead with your opponent's deeply flawed solution when (a) you don't need to politically and (b) your own solution will provide a big economic boost?

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