The Government has conceded that some “non-tariff trading barriers” have emerged due to the post-Brexit trade deal with the EU.
Boris Johnson insisted that there would be no such barriers as he detailed his deal brokered with Brussels, which came into force when the transition period ended on December 31.
But on Thursday the Government acknowledged some had emerged as well as “supply-chain challenges”.
Labour said ministers were admitting “what has been clear for weeks” and urged them to reduce the bureaucracy to prevent costs being driven up for British exporters.
The admission came in a Government “overseas business risk” document, giving businesses guidance on trading with Ireland.
“Some supply-chain challenges and non-tariff trading barriers have also emerged during the transition to UK-EU Trade and Cooperation Agreement terms in early 2021. Respected sources forecast that the Consumer Price Index may increase by up to 2% as a result,” it read.
The Consumer Prices Index (CPI) measure of inflation looks at the prices of thousands of items consumers commonly spend money on, including food, energy bills and fuel.
In a joint statement, shadow international trade secretary Emily Thornberry and shadow Cabinet Office minister Rachel Reeves said: “This Government has left British businesses high and dry, not just by giving them barely any time to prepare for the end of the transition period, but by wrapping them in reams of costly new red tape and bureaucracy.
“Now they’ve admitted what has been clear for weeks – that there are in fact non-tariff barriers to trade with Europe, holding back exporters already under huge strain from the pandemic.
“The Government must urgently listen to our businesses, cut the red tape and plug the gaps in the deal to stop holding back our economic recovery.”
In December, after brokering the trade deal with Brussels, the Prime Minister said “there will be no non-tariff barriers to trade”.
A Government spokesman said: “The UK Government has always said there would be additional processes as we leave the EU and has been running extensive awareness campaigns.
“The Brexit Business Taskforce – led by the Chancellor of the Duchy of Lancaster – has been set up to help businesses prepare.”