Freight News, Logistics, Business

PM’s customs plans in disarray after resignations

[ July 9, 2018   //   ]

Prime Minister Theresa May’s hopes of finding a compromise on how the UK would manage its customs affairs after Brexit were dashed by  two high-profile cabinet resignations within days of a crucial meeting.

Senior ministers appeared to have reached agreement on the plan after a meeting at Chequers on 6 July to thrash out a workable plan. However, far from finding a much sought-after compromise, the only result appeared to be the lighting of a delayed action fuse to a bomb that threatens to explode the minority Conservative government.

Following the Chequers meeting, the Prime Minister issued a statement saying that the UK would maintain a common rulebook for all trade in goods after Brexit, and would sign a treaty on continued harmonisation. There would be a ‘facilitated customs arrangement’, with the UK and EU treated as a combined customs territory.

Wile the UK would be able to set its own import tariffs, unspecified technology would be used to determine the goods’ final destination and whether UK or EU duties should apply.

The UK would closely mirror EU food standards and phytosanitary rules but would again be able to introduce its own standards.

However, the UK parliament would be able to decide in future whether or not to continue with the system.

Downing Street said the system could be partly in place by the end of the proposed transition period in December and fully operational by around 2022.

The new scheme appeared to be an attempt by Prime Minister Theresa May to head off a revolt by Eurosceptic Tory MPs demanding that the UK be free to make trade agreements with countries and control migration while appeasing business interests which have become increasingly restive over the prospect of a ‘hard Brexit’.

The initial impression following the Chequers meeting on 6 July that the deep divisions within the Conservative party had been smoothed over, only for Brexit secretary David Davies to tender his resignation from the Cabinet before the end of the weekend, saying that  he in fact no longer could not support the proposals.

This medium-sized political earthquake was followed on Monday by the resignation of foreign secretary Boris Johnson, leading to media speculation that a challenge to Mrs May’s leadership was imminent.

Their moves dismayed the freight industry. First to comment following Boris Johnson’s resignation was head of consumer research for parcels brokers ParcelHero, David Jinks, who said: “While staying in the Customs Union would have been the best result for exporters apprehensive about new tariffs and red tape…May’s compromise deal at Chequers at least proposed a free trade area for industrial goods and a very promising sounding “combined customs territory.”

However, the two resignations had cut exporters’ celebrations short and, with the threat of more to follow, “it could be game over for Theresa May and Britain’s entire moderate Brexit plans. The resignations not only potentially weaken Prime Minister Theresa May’s standing within her own party – emboldening Conservative Eurosceptics – but also undermine our negotiating position with the EU still further.  Against such a disorganised attack the EU’s defence will certainly feel increasingly confident.”