Shipping chief predicts three years of no-deal Brexit chaos

British ports and shipping companies will need at least three years to set up a new customs system in the event of a no-deal Brexit, the industry has warned in an appeal to the EU and the UK to thrash out an agreement based on the Prime Minister's trade blueprint.

By The Newsroom Sunday, 29th July 2018, 12:26 am

Tailbacks at major ports, such as Dover, would have an immediate impact on food supplies. Picture: Daniel Leal-Olivas/Getty

New IT systems, infrastructure and training for staff “who have never completed a [customs] declaration in their life” would all require significant time to put in place, risking major disruption to trade if talks between London and Brussels fail.

Gavin Simmonds, the UK Chamber of Shipping policy director in charge of Brexit, said: “All our scenarios come out with a clear indication that is contrary to what the Prime Minister said, that no-deal is better than a bad deal.”

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Ministers have begun openly discussing the possibility of the UK having to stockpile food and medicines in the event of a no-deal Brexit.

With the UK’s biggest “roll on, roll off” freight terminals designed for lorries from the EU to enter and leave the UK freely, hauliers have warned of 30-mile tailbacks outside the port of Dover on day one if even minimal customs checks are introduced.

A no-deal is expected to have a dramatic instant impact on food supplies in the UK, with 80 per cent of fresh vegetables and 30 per cent of fresh fruit imported from the EU.

Advice to businesses and the public on how to cope with a no-deal Brexit will be released over the summer in a series of around 70 technical papers. Simmonds said the Chamber of Shipping, which represents 180 companies working the sector, expects around half of those papers to relate to borders and trade.

“The technology isn’t in place in all the right places, and we don’t know what we’re writing programs for at the moment,” Simmonds said of preparations for life after a no-deal Brexit. “We don’t know exactly what the declarations will comprise.”

Governments in France, Belgium, the Netherlands and Denmark are all preparing their customs systems for a no-deal, he said. “Some of those are really quite severe scenarios.

“We’re concerned that those aren’t really matched up with the effort on the UK side – and they obviously have to be aligned, because there’s no point going through one border if you’re going to have to be stopped at the next one.”

Simmonds added: “For major national IT systems, our track record is not great… it’s probably a minimum three-year project time.

“And then, the data needs to be input by tens of thousands of traders who have never completed a [customs] declaration in their life.

“They then need to produce around 30 data set items in a precise format for input. They’re going to get that right – but it’s going to take a bit of training.

“It’s an offence to mis-declare… you would expect quite a lot of mis-declarations to take place, and for the whole system to settle would take several months.”

A “facilitated customs arrangement” is at the heart of the Government’s White Paper on the future relationship between the UK and the EU, which would avoid the re-introduction of customs declarations for 70-80 per cent of trade through pre-approval for “trusted operators”.

But a key part of the proposal – that the UK would apply EU tariffs and customs checks to goods in transit for the Continent – was rejected by Brussels’ chief Brexit negotiator Michel Barnier this week.

He said the EU “cannot and will not delegate the application of its customs policy and rules, VAT and duty collection to a non-member who would not be subject to the EU governance structures”.

The provision is essential for the UK to be able to sign trade deals with other countries outside the EU, but Simmonds warned: “We don’t think that’s going to happen very quickly. The ro-ro stuff will happen on day one, and there’s no avoiding that.”

Critics fear that intransigence on both sides, coupled with an increasingly vocal Brexiteer faction in the Conservative Party, could force the UK out of the EU without a deal, risking chaos at British ports.

“I think the white paper as it stands is a good basis to move forward,” said Bob Sanguinetti, the chief executive of the Chamber of Shipping.

“I think the vision that it portrays is good for both economies – for the UK and the EU.

It’s now time for the real business to be done, and for the UK and the EU to sit down and to thrash out the detail.

Sanguinetti continued: “What is fundamental, however – and there should be no illusion about this whatsoever – is that a no-deal scenario would not be good for shipping.