Brexit customs delays of 30 minutes could bankrupt one in 10 UK firms, survey suggests

Two-fifths of businesses say future trade arrangements still too unclear for them to prepare at all for EU departure

Ben Chapman
Wednesday 26 September 2018 15:38 BST
Despite the potential chaos, 10 per cent said they would prefer a no-deal Brexit than Theresa May’s Chequers plan
Despite the potential chaos, 10 per cent said they would prefer a no-deal Brexit than Theresa May’s Chequers plan

One in 10 UK businesses say customs delays of just 10 minutes to half an hour are likely to push them into bankruptcy, according to a survey.

The Chartered Institute of Procurement & Supply (Cips) polled 1,310 UK and EU-based supply chain managers – the professionals responsible for navigating customs and negotiating with suppliers.

Respondents reported that the longer the delay, the more likely their business would fail. One to three hours of additional waiting for goods at the border could put 14 per cent of firms out of business, rising to 15 per cent for a 12- to 24-hour delay, the results suggested.

Business groups and leading industry figures from a number of sectors have warned for months of the potentially disastrous impact of customs delays if the UK does not secure a trade deal with the EU before Brexit on 29 March.

Despite the potential chaos of a no-deal Brexit, 10 per cent of supply managers surveyed said they would prefer that outcome than the Chequers deal currently being proposed by Theresa May.

The prime minister’s blueprint is supposed to allow the greatest possible access to the EU while respecting the referendum result and solving the problem of the Irish border.

But it has faced fierce opposition from within the Ms May’s own party and was humiliatingly rejected by EU leaders at a summit in Salzburg last week.

No customs checks are currently required for goods entering the UK from the EU and any additional admin or paperwork threatens business models that rely on frictionless trade.

Nearly a quarter (23 per cent) of UK businesses said they are planning to stockpile goods to mitigate the effects of delays, while 4 per cent have already started doing so.

A fifth of companies said they have looked to make contracts with suppliers more flexible while 21 per cent have sought alternative suppliers outside the EU.

Half of UK companies bringing in goods from the EU said they would struggle to find the suppliers and skills they need if they were forced to bring production parts of their supply chain here post-Brexit.

Almost two-fifths (38 per cent) said future trade arrangements are still too unclear for them to prepare at all for Brexit.

John Glen, an economist at Cips, said the UK economy could “fall off a cliff” as a result of border delays of just 10 minutes.

“Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given,” he said.

“Customs delays would not only affect businesses but would also lead to a shortage of products on shelves and an increase in prices for consumers as well.”

Stockpiling is not an option for all firms, he said, because many do not have available storage facilities or simply can’t build up supplies because the items they buy and sell are perishable.

“To prevent an economic meltdown, the government must ensure that goods continue to flow seamlessly across the border post-Brexit,” Mr Glen added.

He said a deal is required quickly because the majority of businesses say they need at least a year to prepare for Brexit.

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