A new £24m border control post may have to be demolished because repeated changes to post-Brexit border arrangements have left it commercially unviable.
The facility at Portsmouth International Port is due to begin physical checks on food and plant imports from the EU at the end of next month, but changes to border protocols since it was built mean half of the building will never be used.
Built with a £17m central government grant and £7m from Portsmouth City Council, which owns the port, it is designed to carry out checks on up to 80 truck loads of produce a day. The port now expects to process only four or five daily.
As a consequence, half of the 14 loading bays will never be used, and annual running costs of £800,000 a year will not be covered by the fees charged to importers for carrying out checks.
Portsmouth is not alone, with ports across the country puzzling over how to make the over-sized, over-specified buildings commissioned by the government pay for themselves with far less traffic.
The Department for Environment, Food and Rural Affairs says it spent £200m part-funding new facilities to cope with post-Brexit border controls at 41 ports. It acknowledges that fewer checks will now be required and says ports are free to use spare capacity as they wish.
The problem in Portsmouth is that the facility, built for a very specific purpose inside a secure area, has no obvious commercial use, so the port is considering building a new, smaller facility, and decommissioning or even demolishing the existing building to make space for a commercially viable project.
“This was built to a Defra [Department for Environment, Food and Rural Affairs] specification when the border operating model was announced and it’s been mothballed for two years while the checks were delayed,” Mike Sellers, director of Portsmouth International Port and chairman of the British Ports Association, told Sky News.
“Now the border will be operating with far fewer checks, we are going to struggle to cover the running costs of around £800,000 a year.
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“So we have to look to the future and work out what strategically is the best way to minimise the impact to the port and to the council.
“I know it sounds ironic, but that could be building another border control post much smaller than this facility, and looking to find commercial ways to get income either through this facility or to demolish it and use the operational land for something else.”
‘Total and absolute mess’
Port owner Portsmouth City Council meanwhile wants its £7m share of the £24m build cost reimbursed by the government.
“We as a council had to find £7m to help build this facility and now we’re on the fifth change of mind about how much inspection there will be. Half of this building is going to be left empty, idle, unused, and yet it’s costing council taxpayers of Portsmouth a great deal of money,” said councillor Gerald Vernon-Jones, transport lead for the council.
Were the Portsmouth facility to close it could impact the security of UK food imports, as the port is the main alternative route to Dover, providing much-needed resilience to a supply chain heavily reliant on the Short Straits route.
“It’s a total and absolute mess, we have an enormous white elephant here,” Mr Vernon-Jones said.
“If we can’t afford to keep port health people here all day, every day, to do those examinations then everything will have to come through Dover, and that’s enormously risky for this country. If Dover is closed for some reason, industrial action or whatever, then the whole country’s food is at ransom.”
The British Ports Association meanwhile has raised concerns with ministers about the preparedness of the new inspection regime at new border control posts (BCPs), due to be enforced in less than six weeks.
The trade body says ports have still not been told what hours BCPs will be required to open, or how many staff from two state inspection agencies will be required on site.
Crucially, they also do not know how much they will be able to charge importers for inspections because the government has not revealed what price it will levy at the wholly state-owned and run BCP at Sevington in Kent, 20 miles inland from Dover.
Given the dominance of Dover in UK food imports, the so-called common user charge will set the price for the rest of the market, but other ports still have no idea where to set fees.
Defra says it will inform the industry shortly of the fees it has determined following consultation.
The fate of the Portsmouth facility, obsolete before it has even opened, symbolises the delay and indecision around import controls since the Brexit deal came into force in January 2021.
While UK exports to the EU have faced border and customs controls since 1 January 2021, the UK government has delayed similar checks on EU imports five times and changed the control regime.
The original July 2021 deadline for physical checks of plant and animal produce was postponed because the BCPs were not ready, and further delays followed, with the government citing the impact on the food supply chain and the cost of living crisis.
In April 2022 the government announced a wholesale revision of its plans for the border, introducing a new risk-based approach that limits checks to certain high and medium-risk food and plant categories.
This was then delayed again, with a staged introduction finally beginning in January, with medium-risk food and plant imports requiring health certificates signed off by vets or plant health inspectors, followed by physical checks from 30 April.
Even with reduced checks on importsm the government’s own analysis suggests border controls will add £330m a year to the cost of trading with the continent and increase food inflation.
A spokesperson for the Department for Environment, Food and Rural Affairs said: “Our border control posts have sufficient capacity and capability, including for temperature controlled consignments, to handle the volume and type of expected checks and the authorities will be working to minimise disruption as these checks are introduced.”
The figures may signal the end of falling inflation given cost pressures being placed on big businesses, according to BRC chief executive Helen Dickinson.
Retailers face a barrage of costs which the BRC forecasts will amount to an extra £7bn for retail businesses next year.
If the government wants to prevent higher shop prices it must reconsider the April 2025 timeline for the new packaging levy and reduce the commercial property tax known as business rates “as early as possible”, Ms Dickinson added.
The minimum wage uplift will bring pay for people over 21 to £12.21 an hour and take effect in April. People aged 18 to 20 will have to earn at least £10 an hour – something the TUC (Trades Union Congress) said could benefit 420,000 young people – as part of the government’s goal of paying the same minimum wage to all workers, regardless of age.
Also from April, employers will have to pay more national insurance for their staff.
Businesses’ national insurance contributions will increase from 13.8% to 15% with the current £9,100 threshold at which employers start to pay the tax on employees’ earnings lowering to £5,000.
Chancellor Rachel Reeves has defended the increase saying half of all businesses – roughly a million firms – are paying either less or the same national insurance contributions as they were before the budget due to the uprated employment allowance, a tax credit for some employers.
“I’m not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing,” she told attendees at the Confederation of British Industry (CBI) conference.
“As a result, we won’t have to do a budget like this ever again.”
Ms Reeves’ budget has faced sharp criticism frommajor UK businesses who have said the policy measures will cost them millions, forcing them to raise prices and cut jobs.
Analysis from independent forecasters the Office for Budget Responsibility said the budget would cause inflation to be higher than originally predicted, adding to the disquiet.
But Ms Reeves has insisted there is no alternative to her policies.
“I’ve heard a lot of feedback but what I haven’t heard is a lot of alternatives,” she said on Monday afternoon.
The £22bn “black hole” in public finances needed to be plugged, which necessitated “difficult decisions”, Ms Reeves reiterated.
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5:34
CBI chief’s approach to budget tax shock
Full consultation on the employer taxes could not take place with firms, she added, because budgets are supposed to be made to MPs in the Commons and not leaked to industry or the media.
“It is the nature of budgets that you can’t announce or consult in the way over tax rates that you can with other policies,” she said.
Earlier on Monday, the head of the CBI, one of the UK’s most prominent business groups, said the budget business tax rises will hit firms rather than encourage growth.
A key goal of the Labour government is to grow the economy.
Kingfisher, the owner of Screwfix and B&Q, also said on Monday that the national insurance changes alone would force up its costs by £31m in the next financial year.
Meanwhile, the boss of McVitie’s, Jacob’s and Carr’s said the UK was losing its appeal for his business.
“We would like to continue to be a major investor going forward,” said Salman Amin, chief executive of snack food company Pladis.
But, he warned: “It’s becoming harder to understand what the case for investment is.”
Barclays has been fined £40m over capital raising that averted its need for taxpayer aid during the 2008 financial crisis.
The Financial Conduct Authority (FCA) found that the bank should have disclosed more details to the stock market about the £11.8bn in funding, from Qatari and other sovereign investors, that it had previously described as “reckless” and lacking integrity.
The penalty followed a protracted investigation that began in 2013 but was held up by criminal proceedings brought by the Serious Fraud Office that led to the acquittal of all defendants charged, including Barclays.
A decision by the bank not to refer the FCA’s enforcement case to an Upper Tribunal meant that the watchdog’s planned fine could be imposed.
Its regulatory action concerned Barclays’ navigation of the events of 2008 when the-then Labour government took huge stakes in major lenders, including Lloyds and RBS – now NatWest – to prevent a collapse of the banking system.
The FCA said of its action: “The events in 2008 were of national importance as banks sought emergency recapitalisation.
“The FCA has a primary objective to ensure market integrity. Banks should treat their obligations to the market and shareholders seriously.”
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Barclays was yet to comment.
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