Duties of Customs

Debate between Stephen Doughty and Darren Jones

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to follow many excellent speeches on this crucial issue. Sadly, it seems to have attracted less attention than it deserves, given its huge implications for our economy and our future trading partnerships. It has always been my view that we should stay in the customs union, and I am glad that the Labour party position keeps that possibility open.

I very much agree with what my Front-Bench colleagues have said today about the importance of scrutiny. That applies not just to customs deals; I have signed early-day motions and supported many other motions calling for us to have much greater scrutiny in this place over trade deals. Whatever our views might be on the nature of those deals and where they should go, it is only right that they are properly scrutinised in this place.

For me, there are two fundamental issues: first, the practicalities and, secondly, the cost. I want to draw somewhat on the report on customs arrangements by the Home Affairs Committee, of which I am a member. The report encapsulated the situation most clearly with the statement:

“At some ports, including Dover, as much as 99% of traffic relates to trade with the EU; witnesses told our predecessors that 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. This would be an unprecedented delivery challenge to UK border operations.”

[Darren Jones (Bristol North West) (Lab)]

My hon. Friend can see the coast of my Bristol North West constituency from across the channel. Does he recognise that the issue involving ports such as Bristol that import and export tens of thousands of cars, wings, landing gears and engines every year is one not just for businesses, but for the entire city, which will be clogged up, as will cities around ports throughout this country? This will be a nightmare for constituents, but it will also create air pollution, as well as ruining business.

[Stephen Doughty]

I wholeheartedly agree with my hon. Friend’s points. I can indeed see his constituency across the waters of the Bristol channel. I will come on to say something specifically about the aerospace industry, which is crucial not only for his constituents, but for many of mine and for the whole of Wales.

Our report made very clear the costs involved. It highlighted the fact that an Institute for Government report has stated that the introduction of customs declarations on EU trade could cost traders between £4 billion and £9 billion a year, based on its various estimates, including an expected 200 million additional declarations after Brexit. Mark Corby has estimated that the additional cost is likely to be between £19 billion and £26 billion a year, as a result of losing the customs and trade facilitation and duty benefits that EU membership offers.

We must also look at the costs of putting in place all the infrastructure. We have heard much discussion today about infrastructure, whether at Dover or at other ports. I am thinking in particular of Welsh ports, especially in relation to the maritime border between Wales and the Republic of Ireland, which is important to get right. This is not only about the relationship between Northern Ireland and the Republic of Ireland, but about the maritime border between Wales and the Republic. Jon Thompson, the chief executive of HMRC, has told the Public Accounts Committee that HMRC estimates the costs at between £300 million and £450 million in the scenario of the UK leaving the EU without a deal and that between 3,000 and 5,000 additional staff would have to be recruited.

These are huge sums, and it is very important that the public understand the costs, the risks and the practicalities. However they voted in the referendum and whatever form of Brexit they prefer, these are the sorts of facts that we need to put before the House and the country when we are taking decisions about the nature of our future relationship with our European partners.

I said that I would talk about the aerospace industry, and I draw attention to the relevant declarations in my entry in the Register of Members’ Financial Interests. Airbus has been very clear that its work involves 80,000 trips between the UK and EU countries a year, which relies on a seamless flow of goods and people, and that removing the seamless nature of that will be dangerous for its business and its prospects. Airbus and companies in its supply chain currently collect limited data for customs needs, but on the assumption that the UK becomes a third country, it would need to produce a customs declaration on wings and satellite components moving from the UK to the EU27. One early assumption is that this would require as many as 50 datasets for declarations, including for country of origin.

At the moment, the Airbus transport aircraft fly from Toulouse, Hamburg and Broughton with only two hours between landing, loading and departure, but should they need to await additional customs inspectors or paperwork, that would lead to delays and have an impact on its delivery schedule. As many Members will be aware, there are heavy commercial penalties for missed deliveries and delays in parts and equipment. This is not just a trifling matter: Airbus spends £5 billion a year in its UK supply chain. We are looking at the problems of transferring small parts and equipment back and forth, which has an impact not only on Airbus directly as a company, but on all those involved in its supply chain, which stretches much further than the thousands it employs directly.