Trade body warns of post-Brexit customs chaos

Government’s decision to change the operational procedure will leave long-lasting damage, say critics

The Government’s post-Brexit customs system will create a “cliff edge” when it is withdrawn as firms will not build capacity to deal with their own paperwork, a trade body has warned.

The Trader Support Service (TSS), announced last month, will enable HM Revenue and Customs effectively to act as a customs agent on behalf of traders.

Michael Gove, the Cabinet Office minister, said the service would be free at the point of use and operational from this month, with the goal of protecting trade flows across the Irish Sea when the UK leaves the EU single market and customs union.

Des Hiscock, director-general of the UK Association for International Trade (Acita), said HMRC was “destroying the customs industry”.

“Many customs brokers are going to lose their business,” he added. “It makes no sense for them to be paid for their services if it’s going to be offered for free.

“The benefits will be short term. The TSS is making it incredibly difficult to build capacity.”

Michael Gove, the Cabinet Office minister Credit: Stefan Rousseau/PA

On a call to industry groups, HMRC confirmed the service would not only help companies complete paperwork for transporting goods to Northern Ireland from the rest of Britain, but also from the rest of the world, at an estimated cost of £355m to the Treasury.

The British International Freight Association has threatened legal action against the Government, claiming the TSS will unfairly distort competition. Mr Hiscock said Acita would be willing to support the challenge “on a number of levels”.

Acita has written to Mr Gove, the Cabinet Office minister, warning that its members “are troubled that the unrealistic scope and extent of the tender requirements are specifically excluding the expertise and experience required to deliver a fair and compliant process”.

The letter added that “the provision of these services by inexperienced participants in a rapidly mobilised consortium, will significantly decrease levels of compliance”.

It also claimed the system would “risk revenue collection, impede the customs intermediary sector’s ability to build capacity, while artificially distorting businesses in the longer term and destroy any government ambition to achieve the strategic objectives of the 2025 UK Border initiative”.

Giving evidence to MPs of the House of Commons’s Welsh Affairs select committee on Thursday, Shanker Singham, the former Washington lobbyist and lawyer known in Westminster circles as the “Brexiteers’ brain”, who will sit on the new Trade and Agricultural Commission, said he was part of a consortium that has made a bid to offer the TSS.

Shanker Singham Credit: Matt Crossick/Empics Entertainment

“This is where it’s all going wrong,” Mr Hiscock said.

“I have tremendous respect for Shanker Singam, but he’s not a customs person. Someone like that, by pulling a consortium together, is going to decimate the industry completely and we’ll be left to pick up the pieces afterwards.

“He’s exactly the type of person we don’t want pulling these consortiums together.”

Mr Singham did not comment.

A Government spokeswoman said: “We are running a transparent and open procurement process to identify a bidder capable of delivering [unprecedented support to all businesses engaging in new processes under the Northern Ireland Protocol] and will ensure a service that is fully compliant with the law.”