Report on the government preparations for Brexit

The House of Commons Home Affairs Committee has published its first report on the government preparations for Brexit. The report focuses on customs operations. This is a 'cliff edge issue' since if there is no deal agreed by Brexit day EU imports/exports immediately become subject to customs. That is £382 billion-worth of goods per year.

Below are quotes from the report, answering key questions. Before you read it sit down and check there is nothing breakable near you.

Has there been progress in the past year?
"Evidence on post-Brexit customs arrangements in January 2017 ... expressed serious concerns about
the level of preparation for post-Brexit border and customs arrangements. Despite 10 months having elapsed since it was taken ... little has changed in terms of the detail of the Government’s intentions, or any action being taken ... beyond the publication of position papers and consultative documents."

What are the government plans?
"There is a worrying lack of clarity about whether the Government intends to preserve existing policy and operational practices during the transition, or [not]. It is also unclear when the Government intends to clarify this. This is a concern, given that there are significant lead times and costs involved."
"The UK Trade Facilitation Expert Panel has warned of the prospect of total chaos if the necessary preparations are not made in good time. [The chairman] argued that ... decisions are needed now, but he feared that this was unlikely to happen."

Is the planning coordinated at the top level?
"The Brexit Secretary has stated that he wants agreement with the European Union on transitional arrangements in the first quarter of next year. The Prime Minister, by contrast, has suggested that any transitional arrangements cannot be formally agreed until the UK’s future trading relationship with the European Union has been agreed."

Who needs to be involved?

"HMRC is the lead government agency for customs arrangements, with Border Force [under the Home Office] providing the operational arm. However, a vast range of other government departments and public bodies also have a role: the IfG report identified 36 organisations involved in customs policy or operations."

Is the Border Force going to be ready for Brexit?
"The Home Office could not provide specific details about any post-Brexit planning that is under way."

Is the new Customs Declaration Service (CDS) computer system going to be ready?
"The planned completion date for the programme is only two months before the March 2019 EU exit date and government IT projects routinely overrun."

Will CDS be able cope?

"CDS had a capacity aim of 150 million declarations. However, HMRC itself has estimated that Brexit will result in an additional 200 million declarations [on top of the current 50 million], meaning that the new system will need to be capable of handling at least another 100 million declarations a year beyond the planned capacity."

What happens if we aren't ready on Brexit day?
Queues. Long long queues. Motorways used as lorry parks. Serious financial costs to the economy and individual businesses. A French ferry strike in 2015 together with the resulting traffic chaos "resulted in businesses losing £21 million in stock and the economy in Kent losing £1.5 million a day."

How much will 'no deal' cost?

"The additional cost is likely to be between £19 and £26 billion a year as a result of losing the customs and trade facilitation and duty benefits which EU membership offers."

How will it affect our ports?

 4 million goods vehicles pass through our ports each year.

"At some ports, including Dover, as much as 99% of traffic relates to trade with the EU; ...a no deal scenario might therefore result in effectively 100% of trade becoming non-EU, leading to a hundredfold increase in the number of customs declarations."
Currently EU goods just roll on through. After a no deal Brexit each goods vehicle will have to wait a minimum of an hour for clearance, and may wait up to five hours. Exactly where they will wait is unclear.
“We should absolutely and categorically try to avoid physical checks on vehicles at ports” because they “simply don’t have the physical space” and “that is where the pressures are.”
"Even at present, clearance for lorries arriving via Dover or the Channel Tunnel which do require customs checks takes place six miles away at a lorry park off the M20 that currently has 82 spaces."

How will it affect our businesses?
"EU rules would require UK exports to be treated in the same way as those from any other third country with which the EU does not have an agreement. This would potentially result in serious delays for UK meat and agricultural products at the [Irish], French and Belgian borders."

"Containers selected for inspection can be delayed for between two and four days."

What about Ireland?

"The Northern Ireland border constitutes one of the UK’s major trade routes with the EU, with 200 crossing points and a continuous daily flow of lorries which at present encounter no customs controls, and RoRo ferries carrying significant amounts of goods between Dublin and Holyhead."
"Ireland is the EU country most dependent on the UK for trade with a value of about a €1 billion a week in both directions."
"It is clear that the impact on border and customs operations at the Northern Ireland border with the Republic of Ireland will be severe in the absence of specific solutions to the very complex Brexit issues affecting the island of Ireland. Decisions on the way forward are needed as a matter of urgency including on infrastructure improvements, systems and capacity."

Conclusion

Below is the report's conclusion:

"We were not satisfied with the answers we received to a vitally important

question about planning for post-Brexit customs arrangements: who is in charge? The

Government’s approach seems to us to lack focus, urgency and above all leadership.

Any progress seems to rely on working groups of government officials, with no

meaningful ministerial leadership. This is particularly worrying given that the costs

involved would appear to be significantly higher than the existing Brexit contingency

funding requested by the Home Office and even higher than the total envisaged

by the Prime Minister for the whole Government. Moreover, the fact that multiple

government departments and agencies are involved in delivering customs means that

a fully joined-up approach from the Government is urgently needed, as well as proper

coordination with the private sector. The impetus to achieve this is only likely to come

from a named senior Government Minister taking responsibility, who can then provide

regular reports to Parliament on the Government’s plans. In addition to the ongoing

cooperation between the Treasury, the Home Office and other departments with a

direct interest, we recommend that a Minister of State should be named as the lead

Government Minister responsible for delivery of post-Brexit customs arrangements."