Britain to cut red tape to protect supply of critical goods

The plan will 'further equip UK businesses to deal with global supply chain problems'

Photo of a container ship crosses the Gulf of Suez towards the Red Sea. The UK government's new strategy on critical good supply chain is aimed at reducing the effect of economic shocks like the current situation in the Red Sea. REUTERS/Amr Abdallah Dalsh/File Photo
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The British government has unveiled a five-point plan to keep imports crucial to the economy flowing into the country.

On Wednesday, the British Department of Business and Trade announced that supplies of critical goods such as medicine, minerals and semiconductors will be protected by the government’s Critical Imports and Supply Chains Strategy.

The strategy has five priority areas, including making the government a central point of all information on supply chains vital to Britain, sharing that information effectively with businesses through a new online portal, creating the conditions where businesses are not held back by unnecessary red tape when importing critical goods, building capacity to respond to shocks to supply chains and utilising the skills of academia, business people and government officials in a new council body that can understand supply chain problems and developed solutions to overcome them.

The issue of global supply chains is, once again, in the spotlight, following the attacks by Houthi rebels in Yemen on commercial shipping vessels in the Red Sea and the Gulf of Aden.

Logistics for moving many goods, including minerals, have had to be adapted with the majority of the world's big shipping companies opting to move Asian goods bound for Europe via the Cape of Good Hope, avoiding the shorter route through the Red Sea and the Suez Canal.

The new Critical Imports and Supply Chains Strategy has been formulated over several years and is a response to recent economic shocks to supply chains, including the Covid pandemic, Russia’s invasion of Ukraine and environmental disasters.

“There are many unpredictable events that can threaten our access to vital goods, from the pandemic, Russia’s illegal war in Ukraine, and the continuing attacks in the Red Sea,” said Nusrat Ghani, Britain's minister for industry and economic security.

“That’s why we’re taking action to ensure crucial imports like medicines can reach consumers, no matter what happens around the world.”

“With this strategy we’re equipping business so they no longer have to rely on unpredictable partners for supplies of the goods that keep our country going.

“By making supply chains stronger we’re helping make the UK a truly safe and reliable place to do business,” she added.

The unveiling of the new strategy comes a month after the British parliament published a report which claimed successive UK government have not done enough to safeguard the country's supply of critical goods and minerals.

Alicia Kearns, chair of the House of Commons foreign affairs committee, said at the time that UK governments had been “asleep at the wheel” for three decades in regard to recognising the importance of critical minerals.

Demand for critical minerals is expected to continue to grow strongly in the coming, as countries reorientate their economies towards the energy transition and the achievement of Net Zero.

By 2030, for example, the global demand for lithium, an essential components in the batteries used in electric vehicles is predicted to be more than twice what it is today.

The prices of critical minerals can be extremely volatile. For example, cobalt which is used in EV batteries and mobile devices is relatively rare and subject to any instability in the Democratic Republic of Congo, where much of the world's supply is mined.

'Pursue further trade deals'

Much of the government's new strategy is aimed at improving the flow, access and quality of information surrounding the supply of critical goods and minerals.

Information about risks to supply chains can be shared with business, along with practical steps that might need to be taken should, for example, a new export ban is imposed on a good or mineral in a country from which the UK normally imports.

On a practical level, the UK government will set up an online business portal, where business can report excessive red tape or any disruption that might be affecting their raw material imports.

The pursuit of more free trade agreements is another pillar of the government's new strategy, given that the supply of critical goods can only be enhanced by the removal of trade barriers and tariffs.

“We will also pursue further trade deals to help UK importers access the critical goods they need efficiently and affordably,” the Department of Business and Trade said.

“This provides certainty for traders, allowing businesses to make informed decisions and reduce delays at the border, helping drive growth and streamlining costs.”

'Resilience and competitiveness'

The automotive industry was quick to welcome the announcement of the strategy, given that many of the raw materials used in batteries for electric vehicles, including lithium and cobalt, are on the government's list of 18 critical minerals.

“With our success powered by complex global supply chains, the automotive industry has been pleased to help shape a new strategy that will support manufacturing agility and responsiveness,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.

“As we accelerate production of the cleanest and greenest vehicles, and the batteries they need, such a strategy is essential and we look forward to continuing this vital engagement to boost Britain’s resilience and competitiveness – essential to the continued success of the UK as a top tier investment destination for the automotive sector.”

As well as safeguarding the smooth flow of imports, the strategy will also look to support and expand the mining of minerals critical to the energy transition within the UK, by attracting international investment to the likes of the lithium mining industry in Cornwall in south-west England.

“This endeavour will support the UK economy by creating sustainable employment opportunities and supply chains that are fundamental to the energy transition,” said Sean Sargent, chief executive at Green Lithium

“In combination with the UK Critical Minerals Strategy and the US-UK Atlantic Declaration, we anticipate that this strategy will attract investment in the UK’s critical mining and refining industries and enhance relationships with key mining countries, including Australia, Canada and Brazil. We are grateful to all those involved in establishing this vital strategy.”

The strategy also places a great emphasis on researching the dynamics of supply chains in order not just to understand the impacts of shocks, but also to map out ways of securing the critical goods and minerals that Britain may need in the future.

Under this part of the strategy, the government will bring its officials, academics and business people together within a new Critical Imports Council that will allow all parties to identify problems and create solutions to ensure supply chain resilience.

The aim is for the Council to be up and running within the next three months.

Updated: January 17, 2024, 12:01 AM