The government has admitted it will cost businesses £330m each year in additional charges when new post-Brexit border controls on animal and plant products imported from the European Union are implemented next year.
Lucy Neville-Rolfe, a minister of state in the Cabinet Office, confirmed the estimated annual cost adding that the UK needs tighter border controls to “protect our international reputation” in a letter to Labour MP Stella Creasy, the chair of the Labour Movement for Europe.
“It will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regime,” said Baroness Neville-Rolfe, in the response to Creasy.
“We estimate these new costs of the model at £330m [per annum] overall, across all EU imports. We have not had full biosecurity controls in place at our border since leaving the European Union.”
Food and logistics firms have repeatedly warned that the UK’s post-Brexit border strategy risks further pushing up food prices, which have already surged due to rampant inflation.
In August, the government delayed for the fifth time the introduction of post-Brexit checks on food, plant and animal produce arriving in Britain, meaning they will not begin until the end of January 2024.
The government said the delay in implementation – from late October – followed talks with industry which said businesses needed more time to prepare.
The move has also been interpreted as a response to concerns that the start of checks would further fuel food price inflation during the cost of living crisis, although the government said the impact of the new border strategy on headline inflation would amount to “less than 0.2% across three years”.
In the letter, Neville-Rolfe said the checks are required because since Britain left the EU it has become “more challenging to intervene to combat threats to animal, plant and human health”.
She said implementing new border controls is essential to protect against the international transmission of diseases such as salmonella and African swine fever which are prevalent in parts of the EU.
“It would be dangerous to underestimate the huge costs both to lives and livelihoods that an outbreak of these diseases could cause to the UK,” she said. “It will help us reduce the risk and potential impact of considerable security and biosecurity threats.”
Neville-Rolfe said the cost of an outbreak of a major disease could have a much more significant financial impact than the extra annual costs industry is expected to have to pay.
She cites the example of the outbreak of foot and mouth disease in 2001 which cost the equivalent of £12.8bn in 2022 prices.
Of this, the cost to the government was £4.8bn, while the private sector bill was £8bn.
“We must also protect our international reputation,” she said. “The continued lack of import controls on animal and plant products risks our trade partners losing confidence in the quality of our exports, particularly if there is a serious outbreak.”
She said that about half of the £330m in extra costs would be for expert health certificates. However, she said this is a reduction on the initial £520m annual estimate until the government decided to introduce less onerous border controls earlier this year.
Creasy warned it would ultimately be consumers who end up paying more for food and products as firms hope to pass on higher costs through price rises.
“British companies struggling with border paperwork to import food will have little choice over these charges meaning it’s likely British consumers will have to pick up the bill,” she said.
From 30 January, imports of items including medium-risk animal products, plants and plant products and high-risk food of non-animal origin from the EU will require health certificates, followed by physical inspections of these goods at the UK border from the end of April next year.
In the final phase, safety and security declarations for EU imports will come into force from the end of October 2024, with physical checks costing up to £43 a time.
However, farmers and veterinary groups have welcomed the new border checks saying that as well as protecting biosecurity it would help level terms of trade for British exporters who have faced full EU border checks since 1 January 2021.
