London: £300 million will be needed to finance 5,000 extra customs officials to deal with post-Brexit border controls, the UKs top customs official has warned.
Addressing a UK parliamentary select committee, Jon Thompson, HM Revenue and Customs’ (HMRC) chief executive and permanent secretary, said: “40 to 60 percent of my time is spent dealing with [Brexit].”
Immediately following the UK’s EU referendum on 23 June 2016, Thompson said: “430 [extra] people were employed” by HMRC to form a Brexit taskforce, but he predicts that by 2019 this will increase to up to “5,000 employees.”
Also speaking to the UK parliament’s Exiting the European Union Committee on Wednesday (29 November) was Richard Everitt, chairman of the Port of Dover, John Bourne, policy director of animal and plant health for the Department for Environment, Food and Rural Affairs (DEFRA), and Richard Ballantyne, chief executive of the British Ports Association.
Brexit is an operational challenge to all UK ports, Everitt said, explaining that at Dover “98 percent of trucks arrive from the EU, and these practically get off the ferry and drive off” immediately onto UK roads.
However, there is a huge disparity between the treatment of EU and non-EU imports. Everitt said: “The one to two percent [of trucks] that are not from the EU go to a facility West of the dock, all custom processes are done at this [secondary] facility. These checks take a minimum of 20 minutes.”
Everitt said that the Port of Dover “handles 5,000 inbound trucks a day and less than 100 of these go to the Western facility. We could not cope with any significant increase in delays of inbound traffic.”
Sian Thomas from the Fresh Produce Consortium (FPC), the UK’s leading fresh produce trade association, addressed the committee at an earlier session the same day. She also expressed concerns with the impacts of potential delays, saying: “Highly perishable products have a short shelf life as they are cut and packaged in the country of origin. Any delays mean that the products start to deteriorate.
“If the supplier presents [deteriorated products] to the customer they can refuse to take it. Suppliers often lose contracts purely through delays at points of entry.”
Ballantyne echoed this concern, saying that “40 percent of international trade [passing through Dover] is high value perishable commodities. Holding vehicles up has associated costs for the port itself and along the logistics chain.”
Theoretically, the UK has a working system for checking international shipments so as to not hold up vehicles carrying perishable goods. According to Peter Hardwick, head of exports at the Agriculture & Horticulture Development Board (AHDB), who was also addressing the committee, these checks are performed at the processing facility in the country of origin, rather than the border itself.
He said, however, that this is not a solution for post-Brexit pressures: “This style, of checking before the border, only works when you have a single, homogenous consignee. However, 15 to 35 percent [of shipments into the UK] are categorised as ‘groupage’ and therefore not collected at, or delivered to the same site,” which is where the complications and delays arise.
Hardwick said: “The expectation for divergence from [EU] regulation was one of the key voting points [to leave the EU] for many [UK] farmers, but it may not be possible.” He believes that the future of the UK’s agricultural success is “all about how we maintain relations with Europe”.
The EU can implement a rate of sanitary and phytosanitary checks based on the health status of the country of origin. Hardwick said: “New Zealand has a high health status so the rate of checks is around two percent. By EU standards Brazil has a low health status so the rate of checks is 100 percent for poultry.”
Also speaking at the committee was James Hookham, deputy chief executive at the UK’s Freight Transport Association (FTA). He said that Brexit means a “significant shift, from background checks at the production facility to checks at the border – this will result in major congestion and delays”.
He said FTA members have expressed growing concerns with regards to the lack of available infrastructure at points of entry and the readiness of UK markets. Because of these concerns, FTA members are taking “prevention measures” and moving facilities, where they can, to mainland Europe “as it is easier to source from Europe than out of the UK”.
According to Hookham, “57 percent of UK [agricultural] businesses have lost contracts beyond March 2019 because of uncertainty”.
In order for the UK agricultural sector to begin contingency planning Hardwick said the dialogue must open up to include more European stakeholders: “Solutions exist but require mutual recognition [from both sides of the Channel]. When goods arrive at EU borders the standards must be mutually accepted, but at this stage we have no idea what the trading relationship will be.”
Hookham said the FTA was in talks with its European counterparts to try and come to a workable solution. He said [the FTA] “has good working relations with Dutch customs, which are the most advanced of the five border states. Ireland is also well ahead in its thinking.”
He added: “I can’t get French customs to pick up the phone or provide any information about their level of preparedness.”
Sian Thomas agreed that European markets want to maintain close trading relations. She said “the UK imports 75 percent of its cut flowers from the Netherlands, so [the UK] is a significant market for them.”
Although she said that UK is the “third largest importing nation for the EU”, she is confident that the “EU will look to other markets if it is too difficult to trade with us”.