Skip to main content

Brexit: the customs challenge report debated by Lords

1 April 2019

On Monday 1 April 2019, the House of Lords debates the European Union Committee's report, Brexit: the customs challenge.

Last year, the EU External Affairs Sub-Committee investigated the customs challenges in the event of ‘no deal' and considered the Government's Chequers proposal for a Facilitated Customs Arrangement (FCA).

The report, published in September 2018, concluded that a 'no deal' Brexit will cause significant disruption and will be costly – mitigation options are limited and no technology currently exists, which would dispense with the need for border checks. ‘No deal' will therefore cause delays at roll-on/roll-off ports and disrupt highly integrated supply chains. Some form of physical border infrastructure will be required on all sides, so the avoidance of a hard border between Northern Ireland and the Republic of Ireland will be particularly challenging.

The FCA proposed by the UK Government aims to preserve the status quo for UK-EU trade, while enabling the UK to pursue an independent trade policy. Alongside a free trade area for goods and a ‘common rulebook', there would be no tariffs and no routine customs controls. It includes the operation of a dual tariff: for goods from non-EU countries, either the EU or the UK tariff would be charged, depending on their final destination. If this cannot be firmly established, UK customs authorities would initially charge the higher tariff, but businesses would be able to claim back the difference on providing proof of the goods' final destination.

The report found that the FCA proposal, while substantially less costly for UK importers than ‘no deal', raises a number of significant questions that need to be resolved—not only for it to be workable, but also acceptable to the EU. For example, it is not clear how goods could be reliably tracked. The repayment mechanism is untested and will take several years to be developed and implemented, while the UK's proposal to collect revenue on behalf of the EU makes agreement difficult.

The Government has not yet provided a response to the report.

Speakers in the debate

Baroness Verma, Chair of the EU External Affairs Sub-Committee, will open the debate on Brexit: the customs challenge.

Other Members of the House of Lords who are due to speak in the debate can be viewed on the Speakers' List.

Further information

Image: © Roger Harris