‘UK may need to remain in EU
THE UK may be forced to remain in the EU’s customs union beyond 2020 because of the Government’s failure to set out alternative plans, MPs have said.
The cross-party Commons Exiting the European Union Committee has issued a withering report on Prime Minister Theresa May’s efforts to find a replacement customs system and concluded that extending the current arrangement is the only “viable option” left.
The MPs said it was “highly unsatisfactory” that ministers had yet to agree on the trading and customs arrangements they wanted to achieve after Brexit.
Existing rules are set to be extended during the transition period from the date of Brexit in March 2019 until the end of 2020.
But the Brexit Select Committee said the lack of progress on alternatives, and the need to avoid a hard border between Northern Ireland and the Republic of Ireland, meant ministers may have to accept an extension for the customs union beyond that date.
Former Welsh Secretary and Preseli Pembrokeshire Conservative MP Stephen Crabb said: “Our report today underlines the incredibly challenging timetable for achieving the kind of Brexit which the Government wants to deliver. The clock is ticking and we risk running up against the hard truth that we will be nowhere near ready to leave the Customs Union in 2021 without damaging our trade flows.”
On Wednesday, it emerged that businesses could be left up to £20bn worse off if the customs plan favoured by Brexiteers is implemented.
The so-called “max fac” plan to use modern technology to solve the Irish border question would leave firms facing huge charges for customs declarations and for EU “rules of origin”, according to HM Revenue and Customs chief Jon Thompson.
In contrast, the second option – the new customs partnership (NCP) believed to be favoured by the Prime Minister – would cost a maximum of £3.4bn and may end up having “a net cost of zero or less”.
But neither model is expected to be ready when the proposed transition period expires at the end of 2020. The Exiting the EU Committee’s report noted that, while Brexit Secretary David Davis had ruled out remaining in the customs union, “in the absence of any other plan, such an extension will be the only viable option”.
The cross-party group was split over a key paragraph of the report