HMRC Impact Analysis: Customs

Debate between Stewart Hosie and Jesse Norman

Tuesday 8th October 2019 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I think the Minister is in denial. The cost is £15 billion—£7.5 billion from UK to EU trade, and a comparable amount from EU to UK trade, which will no doubt be paid by consumers and businesses here. This denial runs to the heart of this whole problem. The Prime Minister said that leaving the EU would save £1 billion a month. That clearly only adds up if we ignore and deny any costs such as the £15 billion that we are talking about today. But it is worse than that. This figure is an annual recurring cost, so how will it be mitigated?

The figures exclude additional one-off costs. How will they be mitigated and have they even been assessed? They ignore the new VAT rules on parcels that are damaging to small businesses. How will that be mitigated and has it actually been assessed? The £15 billion also excludes the serious damage done to exports of low-margin items where this cost burden may be significant. Has that been assessed? Finally, the figures ignore the multiple damages done to businesses that ship part-finished goods back and forward across borders many times, which multiplies the administrative burden. Has that been assessed? How many business will be damaged and what mitigation is being put in place?

[Jesse Norman]

As the House will know, a lot of mitigations have already been passed through statutory instruments, including instruments in relation to stream- lining customs import processes and procedures, special procedures for other areas, and deferment of import duty and VAT. Only yesterday, we passed a statutory instrument on safety and security declarations on our imports.

Mitigation very much depends on the shape of any deal. As the House will appreciate, the figures we are discussing today pertain to a worst-case scenario of a no-deal impact. There are many other areas in which the EU has already indicated that it is happy to give mitigations—for example, in relation to some of our haulage processes and people travelling by air into the European Union.