Customs and Borders — House of Commons, 2018-04-26
Topic: Foreign Trade
Luke Patrick Graham (Conservative, Centre-right): As a remainer and a democrat, I must respect the result of the referendum. Membership of the customs union is possible only for member states of the EU. This was not in any doubt at the time of the referendum; David Cameron said as much on "The Andrew Marr Show" during the penultimate weekend of the campaign. He said: "We cannot leave the EU and remain in the customs union" However, that does not mean that we cannot negotiate a deal with the EU to keep trade as frictionless as possible, and the UK Government have put forward proposals to that end. Whether it is called a customs arrangement or a customs union, I do not really mind the label as long as it achieves the shared goals of frictionless trade and as few barriers as possible I want to talk about some of the concerns raised by the Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), and me as a member of that Committee when we looked into the details and practicalities that will face us if we do not have a firm and solid customs agreement with the European Union. In 2015, roughly 55 million customs declarations were made by 141,000 traders. It is predicted in the reports that we have received, however, that we could see a fivefold increase in the number of declarations needing to be processed after Brexit. That would involve up to 255 million declarations, which would put a great deal of additional pressure and strain on HMRC and on its new customs declaration service’s systems Even allowing for a transitional period to be agreed and in place, we are still working to a tight timetable for putting in place an operational system that traders here in the United Kingdom and abroad will be able to use. The planning for the introduction of the customs declaration service—CDS—system was put into action in 2013-14, before Brexit became a reality, although the planning to account for the increased numbers is obviously a direct consequence of the Brexit decision. There is also uncertainty over the investment in the current customs handling of import and export freight—CHIEF—system, which requires around £7 million if it is to serve as a back-up, just in case the CDS system is not ready when we hit the Brexit date and agreements are not in place HMRC has acknowledged in the Public Accounts Committee that there are four main areas of risk. They involve the integration of all the CDS components, testing to ensure that the system can handle 255 million declarations a year, migrating registered users to the new system and ensuring that users are ready to make declarations on the new system. HMRC will not know until July this year whether the system will work as intended. That is barely a year before the first traders will begin to use it I therefore reiterate to the House the recommendations agreed by the Public Accounts Committee that we believe will help to rectify the situation. First, the Treasury must provide sufficient funding for the back-up CHIEF system and ensure that the CDS is properly funded. Secondly, we need to ensure that there is a fully fleshed-out contingency plan to match the funding for the CHIEF system. Finally, we need to ensure that HMRC has everything it needs to ensure that the affected businesses can be informed off how all this will affect them. That includes businesses here in the United Kingdom and our trading partners around the world We have already touched on the effect of Brexit on our borders, especially in Northern Ireland, so I will not labour that point. I will simply reiterate the point made by others that we are committed to maintaining the integrity of the United Kingdom and that we must have an agreement that respects the Good Friday agreement in Ireland I want to comment briefly on the tone of our past debates. Today’s debate has been a lot more constructive than some of our past debates on the European Union, but we should not forget some of the pessimism that was rife just before Christmas, when the hon. Member for Cardiff North (Anna McMorrin)—who is not in her place—intervened on me multiple times to say that the Brexit negotiations were a mess and that we were in a constitutional crisis. I have to remind the House that only a day later the Prime Minister reached an agreement establishing the financial settlement with the EU and ensuring that EU and UK citizens’ rights would be respected, that the UK would have territorial integrity and that the Good Friday agreement would be respected None of our constituents voted to be poorer, and none of them wanted there to be more barriers between ourselves and our international trading partners. We do not mind the labels or the mechanisms, but I know that my constituents want a customs system that they can rely on, that respects the United Kingdom’s integrity and that will allow them to prosper and be better off than they are today.