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Opening with a quote from Machiavelli's Prince really tells you all you need to know about this article but still...
/1 https://briefingsforbritain.co.uk/the-true-cost-of-customs-the-uk-should-not-be-afraid-of-its-own-shadow/
/1 https://briefingsforbritain.co.uk/the-true-cost-of-customs-the-uk-should-not-be-afraid-of-its-own-shadow/
Yes, the £7bn is very much an estimate. And a simple one at that. Not accounting for differences in the cost of customs declaration or any other costs.
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The claim that there are "many simplifications that can be used to significantly lower the costs of customs processes" has two parts:
1) that these simplifications reduce costs
2) that the UK Gov will simplify the UK customs procedures
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1) that these simplifications reduce costs
2) that the UK Gov will simplify the UK customs procedures
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The simplifications listed include trusted trader schemes, use of periodic declarations, self-assessment processes - apart from AEO none of this is currently used in the EU although self-assessment is supposed to be coming at some point.
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AEO obviously doesn't reduce the costs of customs declarations because companies with AEO status NEED TO SUBMIT CUSTOMS DECLARATIONS like everyone else.
There is this notion that a new type of AEO could be introduced full of all sorts of fancy simplifications
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There is this notion that a new type of AEO could be introduced full of all sorts of fancy simplifications
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And yes, I'm all for that but 1) this is not going to happen by Jan, since, you know, we're already kind of busy implementing other customs procedures on our borders including brand new ones around the Irish Sea border.
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2) there is no guarantee than an upgraded UK AEO system would include new and very advanced simplification that would allow AEOs to reduce costs - literally, nothing indicates that this will be the case
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Just for the record - all the 6000 AEOs in Germany submit their import and export declarations and pay for them if they are using a broker.
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UK has so few companies with an AEO status because until the new customs legislation came out in 2016 there weren't many incentives. UK companies were getting many of the same benefits WITHOUT the AEO. The situation changed in 2016 but then Brexit happened.
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As for the "cost of the EU membership being borne by the UK taxpayer" and the UK companies being "responsible for the cost of customs going forward" argument - remind me what do companies tend to do when they have an increase in costs that affects their margins?
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As for the second part - that leaving the EU will start the UK on a journey towards "smart borders and compliance management through trader registration". That could very much be the case, and again, all for that.
However,
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However,
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1) again, no chance of that happening next year and more importantly 2) there is currently no reason to believe that this will happen - just look at the Irish Sea border - a new border where the UK Gov had the chance to introduce smt new, make it a smart border
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We had an entire Alternative Arrangements Commission, which the author of this paper was involved in, dedicated to using simplifications and technology from around the world and making this a world-class border - and what happened? We're back to the basis:
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Standard declarations and CDS.
If there was something worth pursuing in that report - doesn't seem it's gone very far. Even the current 6m simplifications and the previous TSP are just a version of existing procedures (and still require customs declarations).
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If there was something worth pursuing in that report - doesn't seem it's gone very far. Even the current 6m simplifications and the previous TSP are just a version of existing procedures (and still require customs declarations).
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While yes while all these things are potentially possible and some work in other places... the chances of that making any difference for UK companies next year, in particular SMEs, are very low.
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Finally, the cost of import/export declarations might indeed be lower - with the combined impact of covid and Brexit 1) the volume of trade might initially be lower 2) not all companies, again thinking of SMEs here, will survive.
/ends
/ends
