HMRC deems May’s customs plan ‘unviable’
THERESA MAY’S plan for a customs partnership with the EU is “unviable”, HM Revenue & Customs believes, as it emerged Mrs May is prepared to accept Brexiteers’ favoured “Max Fac” option.
HMRC believes the customs partnership idea is “incredibly complicated” and impractical, Whitehall sources told The Daily Telegraph, and the idea it could be used to solve the Irish border problem is “for the birds”.
A customs partnership with Brussels – which involves collecting tariffs on behalf of the EU – is opposed by a 6-5 majority of the Brexit “war Cabinet”.
Leave campaigners including Boris Johnson and Michael Gove prefer the alternative “Max Fac” option – short for maximum facilitation – which relies on new technology and trusted trader schemes to avoid a EU hard border. In a softening of her opposition to Max Fac, Mrs May made it clear to senior Cabinet ministers that if it was the best way to reach an agreement “then so be it”.
Sir John Major, the former Conservative prime minister, in his first intervention over customs arrangements, said neither option would work and that a customs union was the only way to solve the Irish border problem.
HM Revenue & Customs, which
would have to administer the tariff collection and rebate system under a customs partnership, does not support the idea. A Whitehall source told The Telegraph: “HMRC dislikes the customs partnership, they don’t think it’s a viable option. They think it’s for the birds.
“It’s incredibly complicated and would be very hard to track goods. When it was originally put forward, officials assumed that Max Fac would be the primary option. When they heard it was the customs partnership they thought ‘you’re having a laugh’.”
An HMRC spokesman said that “we don’t comment on rumours” and that “the Government’s two customs proposals are still on the table and work is being done as a priority on these”. They added: “HMRC is committed to playing its part in making the UK’S exit from the EU a success.”
Mrs May set up two Cabinet working groups to find ways of improving both alternatives, but the fact that David Davis, the Brexit Secretary, was appointed to head the Max Fac group shows that Mrs May is treating the option “very seriously”, Government sources said.
“The Prime Minister wants what works best and if that is Max Fac then so be it,” said a senior Whitehall source.
The Cabinet’s Brexit sub-committee will meet on Tuesday for fresh talks about the two options. David Lidington, the Cabinet Office minister, is chairing the customs partnership group, joined by Brexiteers Liam Fox and Michael Gove, who both oppose it. Mr Davis, who supports Max Fac, is joined by Remainers Greg Clark and Karen Bradley.
In a speech to the Irish Embassy, Sir John Major dismissed both options, saying the customs union was “crucial to trade” and there was “no sensible alternative”.
Sir John added: “No doubt many goods can be cleared in some invisible, frictionless way – as yet unidentified – but not all.
“Ingenious options – well-meaning options – have been proposed but rejected by Cabinet sub-committees, with the limp promise that further ideas will be sought. No doubt the search will intensify – but I doubt it will be successful.”