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Brexit: determinedly Anglo-centric

2017-09-16 07:13:23

Nicky Morgan in her debut appearance as chair of the Treasury Committee, replacing Andrew Tyrie, does not seem to have tightened the committee's grip on the proceedings or managed any great improvement in the quality of the questioning.

This was the case with last Thursday's hearing which had three old hands from HMRC, Jon Thompson, Chief Executive, Jim Harra, Director General, Customer Strategy, and Nick Lodge, Director General Transformation, blagging their way through the session.

On Brexit, it was Thompson and Harra who got away with belching out a dense smokescreen of unmitigated extruded verbal material (EVM). But this was entirely the committee's fault. The MPs did not have the first idea of what questions to ask, and what to expect when they got answers.

Supposedly, the session was about the preparedness of the UK customs service (HMRC) for Brexit, but it should have been about border control which is far more than just customs.

Jon Thompson gave a clue here, saying that three-quarters of the border interventions at Felixstowe were by Suffolk Coastal District Council, on port health issues. Their officers opened the majority of containers, and Thompson thought that this was in some way related to EU requirements.

This information sailed over the heads of the assembled MPs, unremarked upon. Border control is about customs people in blue uniforms with gold stripes on their sleeves asking travellers if they have anything to declare. Everybody knows that.

But actually, even customs control isn't just about HMRC. The official system is essentially a partnership between the service at the departing port and the one at the receiving end. How well the goods flow (and revenue evaders are detected) depends on the relations between the two, and how well they work together.

Once Brexit comes, however, we will have torn up the exiting customs agreements with EU Member States, and the Efta/EEA states. So, what matters first is what sort of customs agreement will be finalised to take their place when we finally leave the EU.

However, when it comes to that, neither of our brave Excise officers was of any help at all and nor could they be. Said Harra, in a statement of the bleedin' obvious: "Negotiations on the future partnership have not yet started". And that means there is no way of knowing what the outcome might be.

To give Nicky Morgan her due, she did try to tease more out of the man, asking him what "confidence" he had in the planning of customs authorities in other EU countries. She wanted to know if Harra and his merry men were "having conversations with counterparts across the EU" - particularly France.

Since he could hardly say anything else (and retain any credibility) Harra admitted that the actions of EU customs services, or the lack of them, were "a significant concern". We do have regular dealings with our counterparts in all the member states, he said, "but when it comes to post-Brexit arrangements, all the Member States have been clear that that is a matter for the Commission and the Commission's negotiating team to deal with".

And therein lies one of the most serious problems we have encountered (so far) with Brexit. since nothing at all is happening. "We are not having significant discussions with other customs authorities in the EU about what their arrangements will be post-Brexit", said Harra. He then added: "Clearly, just as there is a task for the UK to deliver, there'll be a task for them as well and I think more insight into their preparedness would be very useful to us, but we don't currently have it".

So, putting this together, we have the other half of the official system which is making no preparations that we know of, leaving the post-Brexit arrangements for the Commission do decide, with "our" team having no useful insight into their degree of preparedness.

We then get Jon Thompson, any many deviations and discussions about other issues. Coming back to the point. The major concern of the HMRC, he says, is the "closed loop system" of Dover to Calais. This is the area where he and his colleagues are focusing the most.

Harra was later to admit that there would be additional burdens on the other side of the Channel and, reinforcing our fears, Thompson pointed out that the situation on the other side of the Channel was "more problematic".

Here is much talk about "Operation Stack" on this side of the Channel, he said, but there is a risk that you could end up with the French equivalent, because you can't get through Calais to get to Dover. While everyone is trying to leave Dover, you can't get in so we need to make sure the system is balanced - it only takes two hours for everything to stop, he added.

Once again, this provoked no great reaction from the assembled MPs who then went on to talk about whether there was a need for additional infrastructure for HMRC. The idea was dismissed. HMRC didn't need it, although it was "perfectly possible that other government departments need additional infrastructure".

It was there that the comment about the activities of Suffolk Coastal came in the officials of which are actually implementing the EU's "official controls". And it was left hanging that they might need additional infrastructure.

Such is the determined Anglo-centricity of the Committee though that not one MP thought to put two and two together, and suggest that, if additional infrastructure might be needed this side of the channel, what about the other side? The question went unanswered.

One thing that struck me though was Harra's admission that the current electronic customs system at Dover lacked an "inventory link" which meant that there was no way of tying together customs declarations with the trucks that were carrying the goods. That required paper processing at the port.

But if we do not have that information electronically, that means we can't transmit it to the French, which means that they will also have to check vehicle paperwork manually, adding to delays.

The thing here though is that, from Brexit day onwards, trucks carrying foodstuffs of animal origin will have to be identified and then passed on to Dunkirk or for the most part returned to Dover. There simply isn't the capacity to handle them.

Then the more detailed screening will start. There will be a high probability that any vehicle carrying chemicals to which the REACH Regulation applies - will be carrying goods which have not been registered in accordance with EU law, having been registered by a UK-based company.

Thus, any vehicle carrying chemicals and that can include things like cleaning agents, adhesives, industrial solvents, paints, corrosion treatments and much else will have to be checked and registrations verified. Full ingredient lists will have to be obtained and, in many instances, physical inspections will have to be made.

Any truck carrying medicines, medical equipment, or medical devices, will have to be checked. Those carrying consignments of machinery and even things such as household lawnmowers will have to be checked, to ensure that valid test certificates are in place.

Vehicles and vehicle parts will also need to be checked. Any that rely on UK approvals may have to be refused entry, and returned to Dover. Aircraft parts will likewise need to be checked.

Then, if there has been no deal, the loads on British-registered trucks will have to be transhipped, as British vehicles will not be allowed through, as the operators' licences will not be valid. Nor, or course, will the driving licences, or the drivers' certificates of professional competence.

Bearing in mind the limited space at Calais, there will be no room for the bulk of the inspections, and with the number of truck being held for inspection or return will quickly overwhelm the facilities. Mr Lodge's two hours delay will be seen as an impossible pipe dream.

And it is then that we will see Operation Stack. If the vehicles and loads cannot be cleared out of Calais port, that means that inbound ferries will not be able to offload. And if they can't offload, they can't return for new loads. And so the system grinds to a halt.

But nobody sitting though that Committee session would get any real idea that this was the most likely consequence of Brexit deal or no deal. The real damage is done by Mrs May's determination leave the Single Market. That is what is going to cause gridlock.

But the MPs didn't want to know. And they will never notice the chaos until it happens. They are in another universe.