Brexit: The Customs Challenge (European Union Committee Report)

Baroness Suttie Excerpts

Monday 1st April 2019 Lords Chamber

[Baroness Suttie (LD)]

My Lords, I too thank the noble Baroness, Lady Verma, for introducing this extremely useful and comprehensive report this afternoon. I also thank the members of the excellent committee secretariat for all their hard work and commitment, as well as for their dogged determination to seek out the facts in this constantly rather opaque process.

When I was rereading the report yesterday afternoon, ahead of today’s debate, as well as reading my own notes from our committee’s extremely informative visit to the port of Dover last July, it was difficult not to feel both angry and depressed. The lack of progress since the report was published last September is shameful. Clearly, the debate taking place at the other end of the building this afternoon, and the second set of indicative votes, will have a direct impact on these issues, not least if the proposal on the customs union passes.

The fact that more than 6 million people have now signed a petition calling for Article 50 to be revoked shows just how concerned people are by Brexit, and in particular by the prospect of a no-deal Brexit. As the Brexit debate has increasingly taken on the quality of a quasi-religious fundamentalist debate rather than an analysis of the facts, it is not surprising that people—most especially people working in small and medium-sized businesses—are increasingly in a state of despair.

I shall focus my remaining remarks this afternoon on the impact on businesses and the preparations for a no-deal Brexit. An estimated 145,000 businesses in the UK trade only with the EU, and an estimated extra 100,000 more may be in the same situation. These are businesses which, over past decades, and certainly since the creation of the single market in 1992, have been accustomed to trading with our EU partners without barriers or friction. Trading with Hamburg or Lyon has been little different for those companies from selling their products from Newcastle to London.

A no-deal Brexit would involve those companies acquiring expertise in customs procedures that they previously never needed. It would involve them facing urgent training, delays and costs. Indeed, as the report makes clear, HMRC estimates that the cost to UK businesses of a no-deal Brexit would be £18 billion per year. Given the reports over the weekend that a number of Cabinet members are now actively calling for a no-deal Brexit, what measures are now being put in place ahead of the new date of 12 April to help small and medium-sized businesses prepare for this situation?

As the report sets out very clearly, roll-on roll-off ports such as Dover will be particularly strongly impacted by a no-deal Brexit. The evidence we heard from the experts on the ground at the port of Dover was extremely powerful. Currently, in the eastern dock in Dover, lorries coming in to the UK from the EU take an average of two minutes to process. In the western dock, where non-EU lorries are processed, the average time for a lorry to be processed is one hour and 15 minutes. At the moment, only 1% of the traffic coming through Dover is non-EU. The port currently handles up to 10,000 trucks per day.

It is a slick operation at the port of Dover, which has developed over many decades, and it currently works as a well-oiled machine. There are 60 crossings per day, and, as the noble Baroness, Lady Verma, said, any delay at either Dover or Calais has a direct impact on the other port. A no-deal departure without any transitional arrangements in place could, it is estimated, result in up to 17 to 20-mile queues of traffic in Kent. The knock-on impact to just-in-time deliveries, food, pharmaceuticals and other industries is of genuine concern to both businesses and ordinary people.

I declare an interest as a resident of the very beautiful town of Broadstairs on the Isle of Thanet in Kent for the past five years. Broadstairs is next to Ramsgate, where the now infamous Seaborne Freight—the ferry company with no ferries—is based. In recent years, Ramsgate has lost its channel ferry crossing to Ostend and its international airport at Manston. Both of those losses have had a very negative impact on the local economy. The Isle of Thanet voted strongly to leave the EU, and it is one of the ironies that, like many other regions, such the north-east of England, it is those areas that voted strongly to leave the EU that are now most likely to be negatively impacted by a no-deal Brexit.

One of the relatively few visible signs of contingency planning for a no-deal Brexit in Kent has been Operation Brock. The results so far have been mixed. The trial run carried out at the abandoned Manston international airport in Ramsgate in January this year saw only 89 of the planned 150 lorries turning up. Given that Dover deals with up to 10,000 lorries a day, a rehearsal with only 89 surely cannot be seen as anything other than tokenistic. The rollout last week of the new contraflow system under Operation Brock on the M20 has also caused concern locally, not least regarding access for emergency vehicles. Can the Minister—who I fully appreciate is one of the good guys and in no way responsible for this mess—update us on contingency planning in the light of these recent events?

The solution to this is in the hands of the other end of the building as we speak. Remaining in the European Union, or at least remaining in the customs union and single market, would solve this customs challenge.

[Lord Lilley (Con)]

I congratulate the noble Baroness and the other committee members on the report. She mentioned the current delays at Dover. I noted in the report that they relate to lorries from Turkey, which is in a customs union. Last week, I met a number of customs agents who told me that the paperwork involved in trade with Turkey, with its customs union, is worse than that for trade with America or China. Do the noble Baroness and her party think that a customs union would solve these problems?

[Baroness Suttie]

I do indeed—not least because of the figure I just gave: 1% of all traffic currently going through the port of Dover comes from non-EU member states. The other 99% goes through in a slick operation. With a no-deal Brexit, that will change overnight—not necessarily because of the Dover side but because of the Calais side, which will have to introduce restrictions.

To conclude, as the report makes clear, the consequences of a no-deal Brexit would be not merely “a bit bumpy”, as some Brexiters have claimed. They would have a real and damaging impact on businesses and the lives of ordinary people for generations to come.