Failure to finalise a new customs system for Brexit could lead to food being left rotting in lorries at the border, MPs have warned.
If the introduction of a new customs system isn’t implemented by 2019, it would be ”catastrophic”, a parliamentary report said.
The House of Commons Public Accounts Committee warned of a risk of huge disruption for businesses, massive queues at Dover and food being left to rot in trucks at the border.
It said the number of customs declarations which HM Revenue and Customs must process each year could increase almost five-fold after the UK’s departure from the European Union – from 55 million to 255 million.
But HMRC does not yet have the funding to increase the capacity of its new Customs Declaration Service to deal with the consequences of Brexit, said the committee.
Its report warns that “much remains to be done” to have an effective CDS system in place on time and urged the Treasury to ensure that funding is in place to develop contingency plans to avoid gaps in the service.
It would be “catastrophic” if CDS is “not ready in time and if there is no viable fall-back option”, the cross-party committee concluded.
The committee’s chairwoman, Labour MP Meg Hillier, said: “Failure to have a viable customs system in place before the UK’s planned exit from the EU would wreak havoc for UK business, trade and our international reputation. Confidence would collapse amid the potentially catastrophic effects.
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“HMRC is under considerable pressure to deliver the new Customs Declaration Service in time, but it does not yet have funding to increase the capacity of CDS to deal with the consequences of Brexit – nor to develop contingency options.
“This is deeply worrying. HMRC requires a relatively small sum to upgrade the current Chief (Customs Handling of Import and Export Freight) system – a move which would provide some peace of mind to traders, many of whom are still operating with limited information and in great uncertainty.
“HMRC tells us it is merely ‘in conversation’ over Chief upgrade costs when, on behalf of business and the British public, it should be banging on the doors of the Treasury.
“HMRC must press the case to secure this funding now and ensure that, if other plans fail, customs will be fit for purpose.”
The report described the introduction of CDS as “a programme of national importance that could have a huge reputational impact for the UK if it is not delivered successfully”.
Uncertainty over the outcome of Brexit negotiations should not be used by HMRC as an excuse to hold back from action to scale up the system to deal with the anticipated rise in workload, ensure that a viable Plan B is in place well before January 2019 and communicate with traders about the changes ahead, said the committee.
The report warned: “There are financial as well as operational implications of not acting now. This is a tight timetable at the best of times. With the hard deadline of Brexit, delay is not an option.
“The Treasury needs to ensure there is funding in place to develop contingency options so that there are no barriers to continuity of service. HMRC also needs to do a lot more to work with the many businesses affected.
“Much remains to be done to have an effective Customs Declaration Service in place, on time, and that traders know how to use.”
A government spokesman said: “The Customs Declaration Service is on track for delivery by January 2019 and has the capacity to deal with a significant increase in customs declarations at the border.
“We’ve already allocated over half a billion pounds in funding to ensure a successful exit from the EU and we will have a fully functioning UK customs service on day one post-Brexit.
“HMRC will continue to operate the current service (Chief) in tandem with CDS during the transition from one system to the other. This will provide an additional level of contingency, should it be required.”
But Liberal Democrat Brexit spokesman Tom Brake said the report exposed a “major threat” posed by Brexit to the nation’s ports, businesses and food supply.
“Thousands of businesses risk being left in the lurch because of the extreme Brexit this Government has chosen,” said Mr Brake.
“We were promised £350 million for the NHS; instead, ministers will have to spend millions setting up a new customs system to avoid chaos at our borders.
“As the true cost of Brexit becomes apparent, it’s clear the British people must be given the final say with the choice to stay in the EU.”
(Main picture: Getty)