5Conclusion
90.The current absence of clarity on the UK’s future customs relationship with the EU, and what this will mean in operational terms, is creating huge uncertainty for businesses. We understand the complexity and sensitivity of the Brexit negotiations and the underlying principle that there is a sequence for making progress on each of the many issues. However, customs is unusual in that it is a “cliff edge” issue. The UK will leave the EU customs union on 29 March 2019 and if no agreement is reached on the UK’s future customs arrangements with the EU, or at least on a transition period, customs checks will be required on all goods exchanged with the EU on day one of Brexit.
91.The Government needs to act now to provide a much greater degree of certainty for the many stakeholders involved in UK trade, as well as the public officials who implement customs policy and administer the processes. The areas where decisions are needed as a matter of urgency clearly include port and transport infrastructure, where the Government needs drastically to increase its co-ordination with the privately-owned ports sector, to ensure that the necessary contingency preparations start immediately.
92.From an operational point of view, remaining in the customs union would cause the least disruption but, in any case, a transition period is essential so that businesses can plan for the new border regime, for ports and private sector freight operators to invest in new systems in the UK and Europe, and for public sector organisations including HMRC, Border Force and regulatory bodies to design, invest in and implement new systems.
93.Much more urgency is also required from the Government to prepare for the consequences of a no deal scenario, or a ‘no deal, no transition’ scenario, and the associated costs. While we support the Government’s intention to achieve a deal, the scale of the upheaval required in relation to customs and border operations is such that considerable contingency planning is needed. The scale of planning should be substantially increased, and should accelerate if there is no agreement on a transition deal, as the Brexit Secretary hopes there will be in the first quarter of next year.
13 November 2017