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Tuesday, August 01, 2017

Are we heading for post-Brexit customs chaos?

With the current chaos surrounding the Government's approach to Brexit negotiations it would be hardly surprising if it all ends badly. Not only are the lies and false promises put out during the referendum campaign coming back to haunt Ministers with a vengeance, but it is becoming clear that those who called this referendum in the first place had no idea what to do with it if the result went against them.

The Independent reports on the views of the Europe-wide economic consultancy Oxera that the UK could be hit with post-Brexit customs chaos that would cost the economy more than £1bn a year. They say that if no trade deal is reached when the UK leaves the EU, customs checks would cause lengthy border delays, resulting in slower trade:

The report, authored by Oxera’s head of transport and entitled, Brexit: The implications for UK Ports, suggested huge lorry parks would have to be built in south-east England to cope while longer motorway queues would be an inevitable consequence of greater customs control.

“We estimate the impact of such a scenario to be at least £1bn per year. This is an extremely conservative estimate – it does not account for the economic costs of the uncertainty involved, the extra staff needed (for hauliers, ports and customs officials), the congestion associated with calling Operation Stack [which would see the M20 used as a makeshift lorry park], the land required for the additional customs checks [in the form of lorry parks], or of the wider economic impacts of jobs moving overseas due to uncertainty over the operation of just-in-time logistics," it said.

“The full cost is likely to be much higher.”

Theresa May has promised to maintain the “frictionless” transport of goods between the UK and the EU despite her plan to leave the Customs Union, although she has more recently amended this pledge to “as frictionless as possible”.

However, the EU’s chief Brexit negotiator, Michel Barnier, has warned the UK’s hopes of securing “frictionless” trade are unrealistic. He has warned that it is not possible to leave the customs union and build frictionless trade. We cannot leave the single market and keep all of the benefits. UK goods trade with the EU is valued at £466bn.

The scary thing is that our dysfunctional government is sleep-walking into this scenario, whilst the main opposition party continues to squabble amongst themselves as to their own approach to Brexit.
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