Financial Secretary to the Treasury (FST) Mel Stride has confirmed to MPs that both options put forward by the UK Government for post-Brexit UK-EU customs arrangements remain in play.
He was responding to an ‘urgent question’ tabled by Hilary Benn, Chair of the Commons Select Committee on Exiting the European Union, which asked the Government to make an urgent statement to the House of Commons on customs clearance arrangements at UK ports after the UK leaves the EU. This followed news that the EU and UK had agreed to a transition period after Brexit next March.
The FST repeated that the Government has set out, in its future partnership paper last summer, two options for future customs arrangements with the EU. The first is a highly streamlined customs arrangement with measures to help to minimise barriers to trade, from negotiating the continuation of some existing trade facilitations to the introduction of new technology-based solutions. The other is a new customs partnership under which the UK would mirror the EU’s requirements for imports from the rest of the world that are destined for the EU, removing a need for a formal customs border between the UK and the EU.
The minister repeated the words of the Secretary of State for DExEU that we will not in any circumstances create a hard border in Dover that requires the UK to stop every lorry in the port of Dover. The implementation period for the arrangements will give us additional valuable time to provide certainty to businesses, he said. The preferred final approach will hinge on what is the most frictionless. The Secretary of State for DExEU has confirmed that Gibraltar will be part of the agreements that the UK is expecting the European Council to agree to very shortly, and that they will also extend to Crown dependencies and overseas territories as appropriate.
The Spring Statement stated that the Office for Budget Responsibility has already upped the estimates of growth for next year, and hopefully the implementation period will make a further positive contribution to that, Stride said.
HMRC has made it clear that there will be a requirement of between 3,000 and 5,000 additional staff and £260 million would be made available to them by the Treasury in the coming year to pay for people and technology to deal with Brexit. Nothing in the UK’s relationship with Euratom, or the UK’s lack of involvement with it going forward, will affect the ability of those isotopes to move between mainland Europe and the UK apparently.
Labour contributions and questions
Hilary Benn wanted to know which border crossings will be covered by the no-checks policy. Benn also asked whether the Government is confident that World Trade Organisation rules allow for not applying certain customs checks at some ports but not others.
From the Labour frontbench, Shadow Chief Secretary to the Treasury Peter Dowd asked the FST to confirm that it is now government policy to discard protections on goods travelling into the country through a customs union while also refusing to check goods vehicles as a requirement to entry. He also wondered how tariffs will be applied and enforced without goods vehicles being checked by customs officials and upholding ‘environmental protections’.
Yvette Cooper had it confirmed by the FST that the Government has ruled out having the extensive cameras planned for Dover at the Northern Ireland border, because they have ruled out any physical infrastructure at that border. Stephen Kinnock said plans for a new lorry park off the M20 are completely ‘snarled up’ in a judicial review. Stride did not mention the case but replied that many checks will occur at business premises and storage facilities, including Stop 24, for example. Albert Owen said Irish companies are already making contingency plans to go directly to mainland Europe, thereby bypassing Welsh, Scottish and English ports. The FST could not confirm to Labour’s Ian Murray whether ports on mainland Europe will reciprocate by having no customs checks for UK goods.
Stephen Timms pointed out that if there is no trade deal with the EU, it will be a breach of World Trade Organisation rules to apply checks and tariffs to non-EU goods but not to EU goods. Jaguar Land Rover is postponing investment in a new generation of electric vehicles until it is satisfied that there will be frictionless trade with the EU, said Adrian Bailey. Wes Streeting was told that the customs declaration service system that HMRC is developing is currently in testing, will go live come August and will be used in its entirety come January next year. Paul Sweeney asked why the Minister’s officials placed a clause in the Taxation (Cross-border Trade) Bill leaving it open to the Government to create a customs union after Brexit. Stride replied that one of the reasons for that relates to our Crown dependencies and overseas territories.
Conservative contributions and questions
Bill Cash wanted assurances from the FST that the ‘British Government will stand firm on the question of not allowing the European Court of Justice exclusive or sole jurisdiction’ in the context of the UK ports and customs issues. Stride replied that once we have exited the implementation [transitional] period, the European Court of Justice will have no further remit in the UK.
John Redwood said we currently have friction-free and successful trade with the rest of the world under WTO terms. But Anna Soubry pointed out: “If there were two countries that were ever going to have a completely frictionless border, they would be Norway and Sweden, because they are both in the single market, but, as we know, there is a hard border there”. Charlie Elphicke urged the Government to embrace digital borders, ‘at which we have frictionless trade, risk-based stopping of trade and inspections where necessary, and the postponement of workplace checks and audits’. Desmond Swayne said that if we adopt unilateral free trade, we will not be the source of any friction. Marcus Fysh wants to see upgraded capacity for inspections and declarations implemented behind the border now, so that trade can continue to flow whatever the outcome of negotiations with the EU by 29 March next year.
Other contributions and questions
The SNP’s Europe spokesman is Peter Grant and he said the port of Dover reckons that 99 per cent of its traffic goes to and from the EU, and it takes the ‘massive great lorries’ an average of two minutes to get through. The other one per cent goes to the rest of the world, and it takes an average of 20 minutes for those lorries to get through, he added. “There is no degree of customs check that can prevent Dover—in fact, most of Kent—from becoming a car park [after Brexit]”, he said. The FST replied that technology and the pre-lodging of customs declarations will allow traffic to move briskly through the ports.
Party colleague Alan Brown joked about the Transport Secretary’s statement that ‘trucks will move through the border without stopping…in the way it happens between Canada and the US.” Brown read from a border crossing guide for commercial truck drivers travelling between Canada and the US. “It confirms that they need to submit paperwork to customs at least two hours before they arrive, which may expedite the process by up to 30 minutes. It also confirms that all trucks will have a primary inspection that may or may not be the only stop.”
Tom Brake, Lib Dem Brexit spokesman, said that 10,000 trucks pass through Dover every day, so how long will the tailback be if, say, one out of every 10 additional trucks needs to be checked and each check takes five minutes. Where will the lorry parks be built that will be needed to accommodate that, he asked. Stride replied that there will be no requirement for anything like the level of stoppages at Dover that he suggested because of technology.
Ben Lake, Plaid Cymru, said more than 70 per cent of Irish road freight comes into the UK through Welsh ports. If a border is placed in the Irish Sea, Welsh ports could face severe delays and disruptions, he worries.
The full debate can be read here.