U.K. delays full border checks as pandemic shellacks economy

LONDON — The British government said Friday it will delay bringing in full border checks on goods coming from the European Union to relieve pressure on businesses hammered by the coronavirus pandemic.

But the U.K. once again ruled out delaying its full economic break with the bloc beyond the end of this year.

The U.K. left the now-27-nation bloc on Jan. 31, but remains part of its single market for trade and other economic structures during a transition period that lasts until Dec. 31. After that, British firms trading with the EU will face customs checks, border inspections and — unless there is a free trade deal — tariffs.

The bloc is the U.K.’s biggest economic partner, accounting for about half of Britain’s trade. In February, the U.K. government announced that goods coming from the EU would require inspections and customs declarations starting in January.

But on Friday the government said border checks would be introduced in stages. Importers of most goods will be able to delay submitting customs declarations or paying tariffs for up to six months, though they will have to keep customs records. From July 2021, traders will have to make full declarations and pay tariffs at the point of importation.

The government estimates that businesses will have to fill out 200 million new customs forms a year under the new rules.

The government also announced 50 million pounds ($85 million Cdn) to help set up a huge new border industry to deal with trade red tape, including customs brokers and freight forwarders. The U.K. says it will build new customs and border facilities for all the checks — a process that has been set back by the pandemic.

Britain’s economy is already reeling from the impact of the coronavirus pandemic. The Office for National Statistics said Friday that economic activity shrank by 20.4% in April, the first full month after a nationwide lockdown was introduced to slow the spread of the virus.

All areas of the economy were hit during the month, in particular pubs, education, health and car sales. The month-on-month decline was unprecedented and, adding the still substantial 5.8% decline in March, means the U.K. economy is about 25% smaller than it was in February.

The U.K. and the bloc are trying to negotiate a free trade deal to kick in after that, but talks have stalled amid wide differences over key issues, from fishing rights to competition rules.

British Prime Minister Boris Johnson is due to hold talks with EU chief Ursula von der Leyen and other top officials of the bloc by video call on Monday in a bid to break the impasse in trade talks.

Britain has firmly ruled out seeking an extension to the transition period, which was permitted under a U.K.-EU divorce agreement, raising the prospect of a “no-deal” exit that many British businesses say could be devastating.

EU commission vice-president Maros Sefcovic said Britain’s Michael Gove, the minister in charge of Brexit preparations ‘’could not be clearer” there would not be an extension although the EU was ready to grant one. Sefcovic and Gove co-chaired an EU-U.K. joint committee meeting on Friday.