Brexit border checks to ‘add billions’ to consumer bills

Published

1 year ago

April 30, 2024

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Border checks on food and plant imports will add billions of pounds to the cost of doing business with the European Union, industry figures have warned.

From today European imports considered a “medium risk” to UK biosecurity will face physical inspection as part of a new border regime introduced almost eight years after the Brexit vote, and delayed five times in two years.

Plant and animal inspectors will examine a proportion of imported goods including fresh meat, fish, and dairy produce, a process that importers fear will disrupt supply chains, particularly for time-critical fresh goods.

The physical checks come three months after the introduction of new documentation for imports, including health certificates that require vets and plant inspectors to sign off consignments.

With importers also facing a charge for each consignment that comes into the UK irrespective of whether it is stopped for inspection, the government admits it will add more than £330m to annual business costs, and add 0.2% to food inflation over three years.

The Cold Chain Federation, which represents cold and frozen goods importers, believes government estimates are low, and puts the cost in billions.

“We think there’s going to be a billion pound’s worth of extra cost put onto food coming through Dover port alone, if you expand that to the rest of the country you’re looking at all sorts of money, so it won’t be 0.2%, it will be substantially more than that and the consumer will see that increase,” chief executive Phil Pluck told Sky News.

“Restaurants, delicatessens, fish and chip shops could well be affected by what’s currently happening today and the consumer, in the very near future will start to see some of those food products going up in price.”

The government insists the checks are necessary to keep food and plant-borne diseases including African swine fever out of the UK, and the cost of introducing the checks is “negligible” compared to the impact of a major disease outbreak.

Christine Middlemiss, the UK chief veterinary officer, said: “Now that we’re out of the EU and we can have our own biosecurity regime, we treat independently with other countries around the world so it’s important we’re managing our own biosecurity risks at the moment we’re at medium risk of incursion of a disease called African swine fever which is present in Germany and Italy and a number of countries in Europe.”

Smaller independent food importers fear they will be disproportionately affected by the new border regime as they lack the scale to mitigate costs or set up European subsidiaries to handle the process.

Stefano Vallebona came to the UK 40 years ago from Sardinia and began providing London’s top restaurateurs with high-quality European produce. He says the new red tape will discourage small suppliers from doing business with the UK and ultimately reduce choice.

“All the pasteurised cheese, they already have extra European certificates, and when you talk to suppliers they’re not so keen, probably because they’re too small, because it’s new and it’s time consuming, so we’re going to have less speciality products.

“We will have less interesting cheeses, less interesting meats, and probably more power to the supermarkets and less to independents because it’s going to be harder.”

European importers say the health checks are of limited value as they replicate the EU processes that the UK helped create for four decades, and have lived with for the last eight years without any additional processes.

Piotr Liczycki, managing director of Polish haulage firm Eljot International Transport, which specialises in meat imports, estimates his customers will pay around £1m in fees to the UK government this year.

“Nobody can explain what’s the difference between midnight and when the Brexit rules start up. It’s completely the same stuff, from the same factory, with the same quality, nothing has changed,” he told Sky News.

“Polish groups and poultry plants are wondering why the UK government didn’t enforce a solution like we have with Japan, or South Korea. You send us a couple of officials from Defra, they check the plant, do inspection, and say this plant is compliant with all our regulations so we give you permission to send goods for six months or a year.”

Cabinet Office minister Baroness Neville-Rolfe said: “It is essential that we introduce these global, risk-based checks to improve the UK’s biosecurity. We cannot continue with temporary measures which leave the UK open to threats from diseases and could do considerable damage to our livelihoods, our economy and our farming industry.”

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More than a quarter of cars sold in August were electric vehicles – SMMT figures

Published

10 hours ago

September 4, 2025

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More than a quarter of cars sold in August were electric vehicles - SMMT figures

A greater proportion of electric cars were sold last month than at any point this year, industry data shows.

More than a quarter (26.5%) of cars sold in August were electric vehicles (EVs), according to figures from motor lobby group the Society for Motor Manufacturers and Traders (SMMT).

It’s the largest amount of sales since December 2024 and comes as the government introduced financial incentives to help drivers make the move to zero tailpipe emission cars.

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The full suite of grants were not available during the month, however, with a further 35 models eligible for £1,500 off early in September.

Throughout August more models became eligible for price reductions, meaning more consumers could be tempted to purchase an EV in September.

The increased percentage of EV sales came despite an overall 2% drop in buying, compared to a year earlier, in what is typically the quietest month for car purchases.

What are the rules?

The numbers suggest the car industry could be on course to meet the government’s zero-emission vehicle (ZEV) mandate, the thinktank Energy & Climate Intelligence Unit (ECIU) has said.

It stipulates that new petrol and diesel cars may not be sold from 2030.

Amid pressure from industry, the government altered the mandate in April to allow for hybrid vehicles, which are powered by both fuel and a battery, to be sold until 2035.

Sales of new petrol and diesel vans are also permitted until 2035.

Until then, 28% of cars sold must be electric this year, with the share rising to 33% in 2026, 38% in 2027 and 66% in 2029, the final year before the new combustion engine ban.

Manufacturers face fines for not meeting the targets.

Last year, the objective of making 22% of all car sales purely EVs was surpassed, with EVs comprising 24.3% of the total sold in 2024.

Why?

The increased portion of EV sales can be attributed to increased model choice and discounting, on top of the government reductions, the SMMT said.

Savings from running an electric car are also enticing motorists, the ECIU said. “Demand for used EVs is already surging because they can offer £1,600 a year in savings in owning and running costs.”

“This matters for regular families as the pipeline of second-hand EVs is dependent on new car sales, which hit the used market after around three to four years.

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Firms cut jobs at fastest pace since 2021, Bank of England data shows

Published

13 hours ago

September 4, 2025

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Firms cut jobs at fastest pace since 2021, Bank of England data shows

Businesses have cut jobs at the fastest pace in almost four years, according to a closely-watched Bank of England survey which also paints a worrying picture for employment and wage growth ahead.

Its Decision Maker Panel (DMP) data, taken from chief financial officers across 2,000 companies, showed employment levels over the three months to August were 0.5% lower than in the same period a year earlier.

It amounted to the worst decline since autumn 2021 as firms grappled with the implementation of budget measures in the spring that raised their national insurance contributions and minimum wage levels, along with business rates for many.

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The start of April also witnessed the escalation in Donald Trump’s global trade war which further damaged sentiment, especially among exporters to the United States.

The survey showed no improvement in hiring intentions in the tough economy, with companies expecting to reduce employment levels by 0.5% over the coming year.

That was the weakest outlook projection since October 2020.

At the same time, the panel also showed that participants planned to raise their own prices by 3.8% over the next 12 months. That is in line with the current rate of inflation.

The news on wages was no better as the central forecast was for an average rise of 3.6% – down from the 4.6% seen over the past 12 months.

If borne out, it would mean private sector wages rising below the rate of inflation – erasing household and business spending power.

The Bank of England has been relying on data such as the DMP amid a lack of confidence in official employment figures produced by the Office for National Statistics due to low response rates.

Bank governor Andrew Bailey told a committee of MPs on Wednesday that he was now less sure over the pace of interest rate cuts ahead owing to stubborn inflation in the economy.

The consumer prices index measure is expected to peak at 4% next month – double the Bank’s target rate – from the current level.

Higher interest rates only add to company costs and make them less likely to borrow for investment purposes.

At the same time, employers are fearful that the coming budget, set for late November, may contain no relief.

Sky News revealed on Thursday how the head of the banking sector’s main lobby group had written to the chancellor to warn that any additional levy on bank profits, as suggested by a think-tank last week, would only damage her search for growth.

Rachel Reeves is believed to be facing a black hole in the public finances amounting to £20bn-£40bn.

Tax rises are believed to be inevitable, given her commitment to fiscal rules concerning borrowing by the end of the parliament.

Heightened costs associated with servicing such debts following recent bond sell-offs across Western economies have made more borrowing even less palatable.

Ms Reeves is expected to raise some form of wealth tax, while other speculation has included a shake-up of council tax.

She has consistently committed not to target working people but the Bank of England data, and official ONS figures, would suggest that businesses have responded to 2024 budget measures by cutting jobs since April, with hospitality and retail among the worst hit.

Commenting on the data, Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “The DMP survey shows stubborn wage and price pressures despite falling employment, continuing to suggest that structural economic changes and supply weakness are keeping inflation high.

“The MPC [monetary policy committee of the Bank of England] will have to be cautious, so we remain comfortable assuming no more rate cuts this year.”

“That said, the increasing signs of labour market weakness suggest dovish risks,” he concluded.

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Bank lobby chief warns Reeves over budget tax raid

Published

13 hours ago

September 4, 2025

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Bank lobby chief warns Reeves over budget tax raid

The head of Britain’s main banking lobby group has warned the chancellor against a budget raid on the industry, arguing that it would undermine her aim of delivering sustainable economic growth.

In a letter to Rachel Reeves seen by Sky News, David Postings, the chief executive of UK Finance, said renewed speculation about increases to banks’ tax burden risked undermining their international competitiveness.

Mr Postings’ letter was sent earlier this week, just days after shares in the largest UK banks – including Barclays, Lloyds Banking Group and NatWest Group – slid amid fears of a renewed tax raid on the sector.

“Both the financial services sector and the wider investor community have… strongly welcomed your clear emphasis – most recently through the Leeds Reforms – on ensuring that the UK’s financial services sector has the right environment to be internationally competitive,” he told the chancellor.

“As you said in launching those reforms, it is vital to deliver certainty for banks operating here and ensure that UK banks can compete internationally and drive economic growth.

A report published last week by the Institute for Public Policy Research (IPPR) think-tank proposed that the chancellor use her November budget to impose an additional levy on bank profits – prompting an investor sell-off of shares in the main UK lenders.

Anxiety about higher personal and corporate taxes has gained momentum in recent weeks because of the weak outlook for the public finances, with Ms Reeves needing to fill a multibillion pound black hole to ensure the government meets its own fiscal rules.

Treasury insiders have sought to play down the prospects of such a move during private discussions with bank executives in recent days, but the timing of Mr Postings’ letter underlines the heightened anxiety in the sector following the sharp recovery in its profitability in recent years.

“As many of our members have recently noted, efforts to boost the UK economy and foster a strong financial services sector would not be consistent with further tax rises on the sector, which already makes a substantial contribution to the public finances,” Mr Postings wrote.

“The emphasis should be on continuing to implement an agenda of regulatory reform that allows for an appropriate adjustment in risk appetite.”

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Mr Postings denied that the recovery in bank profitability was unreasonable, saying: “UK banks’ net interest margins have only returned to historically more normal levels and are far from excessive.”

He added that the industry had made a record tax contribution of approximately £45bn last year.

“UK Finance analysis shows that the UK’s total tax rate for model corporate and investment banks is already notably higher than other major financial centres such as Amsterdam, Frankfurt, Dublin, and New York,” Mr Postings told Ms Reeves.

“This disparity is driven by the permanence of sector-specific taxes in the UK, unlike in other EU jurisdictions where comparable arrangements have been phased out.”

He added that a further tax on the banking industry “would run counter to the government’s aim of supporting the financial services sector and make the UK less competitive internationally, potentially driving capital and investment to other jurisdictions”.

“It would also risk undermining the sector’s ability to drive growth, innovation, and productivity across the UK economy.

“A pro-growth, stable operating environment is the best way to deliver strong and sustainable tax revenues, retain talent and underpin investment across the economy.”

UK Finance declined to comment further on the letter when contacted by Sky News.