Bernard Jenkin is Chair of PACAC (Public Administration and Constitutional Affairs Select Committee), MP for Harwich and North Essex, and Chair of the Steering Committee of the European Research Group of MPs.
Michel Barnier continues to insist that if the UK leaves the EU Customs Union then there must be border checks on the Northern Ireland border. The time is approaching when the Prime Minister will be left no alternative but to confront this assertion directly. The UK is not going to build new checkpoints on our side. She has made this clear repeatedly. Nor will the EU or the Irish Republic on theirs. If they were to do so, that would be their responsibility, not ours.
The EU, as usual, is insisting we adhere to their legalistic doctrine, instead of helping to find and implement a practical solution. They do not wish to concede that an open frontier is consistent with anything less than “full alignment” of product regulation. But this is to continue letting the tail wag the dog.
Jon Thompson, head of HMRC, told the Treasury Select Committee that there is no need for infrastructure at the border. This view has been backed by Lars Karlsson, President of KGH Border Services, former Director of the World Customs Organisation, and Deputy Director-General of Swedish Customs. He recently gave evidence to the Exiting the European Union Committee, and said –
“In the best of situations, the two partners would agree that this is a movement of goods from one territory to another where we could accept the lowest level of confidence when it comes to the legitimacy of legal trade moving from one to another. It could be a situation where this truck is then moving across the border; it passes a border without any new infrastructure; and it moves to the other side, i.e. what you would describe as a frictionless border.”
The Prime Minister has sought to conciliate the EU by exploring an alternative arrangement – the proposed “New customs proposals laid out by Government in new paper on future relationship with the EU”, published last year. It explains that –
“One potential approach the UK intends to explore further with the EU would involve the UK acting in partnership with the EU to operate a regime for imports that aligns precisely with the EU’s external customs border, for goods that will be consumed in the EU market, even if they are part of a supply chain in the UK first. The UK would need to apply the same tariffs as the EU, and provide the same treatment for rules of origin for those goods arriving in the UK and destined for the EU.”
I am in favour of testing new ideas like this, but the clock is ticking, and this one won’t fly. Back in August last year, the government admitted “this is an innovative and untested approach that would take time [five years] to develop and implement.” No one serious has emerged to back the idea. So far I have found no academic, no business, nobody – except the CBI (which has also declared that it favours keeping the UK in the EU customs union).
Peter MacSwiney, the Chairman of ASM (UK) Ltd and of the Joint Customs Consultative Committee (JCCC), an HMRC-sponsored forum, said to the Treasury Select Committee of the ‘customs partnership’ proposal to the Treasury Select Committee.
“I am really unclear about this five years. I do not like the new customs partnership. I think it is a ridiculous suggestion. It seems to be based partly on the IPR [Inward Processing Relief] regime, which is probably the single largest regime within HMRC that has fiscal anomalies and non-compliance. It seems to be coupled with the enhanced end-use process, which again tracks goods. That was very unpopular with the trade when the UCC added some bells and whistles to it. I am very sceptical that that solution would ever work, but even if it were to be deployed I cannot see what HMRC is building.”
Even if the idea did work, it would surely still require either a regulatory border for UK products not made to EU standards or UK conformity with EU laws, while importing goods that are not. So why would this serve any better than a standard customs frontier? Turkey has a customs union agreement with the EU, but the latter still insists on very substantial border infrastructure for goods on its frontiers with Greece and Bulgaria.
We must now end the uncertainty about the UK’s future relationship, so that people can start planning for the future. The Government’s August proposals contained two proposals. Only one works. The other is untested and complex, no least since it depends on tracking goods after they have entered the UK. We could have insisted a year ago that we would seek to negotiate the UK-EU free trade agreement on conventional terms under the WTO framework. The EU has agreed that the objective of the talks should be no tariffs and no quantitative restrictions, which is so obviously in the interests of jobs and prosperity on both sides. Why encourage the EU to carry on stalling on this? Arranging customs under the WTO framework is not rocket science. It’s what the rest of the world does. The EU has no cause to threaten chaos by refusing to cooperate.
The Prime Minister has made it clear: it is only if we are outside any customs union that she can deliver on her policy. Only then will the UK be able to make free trade agreements. Julie Bishop, Australia’s Foreign Minister, confirmed this during the Commonwealth summit when she said: “Australia is very keen to pursue a free trade agreement with the United Kingdom. I think that would be precluded if the United Kingdom were to rejoin the customs union.”
And the UK must have “full regulatory autonomy”, as the Prime Minister confirmed in answer to a question. All she reasonably asks is that the EU should accept we are going to be like most countries, who are not in the EU, or in any customs union with any other country. They are able make their own laws and regulations.
Throughout these negotiations – from her Lancaster House Speech, through the Florence speech, to the critical Chequers cabinet summit, which rejected membership of any customs union – the Prime Minister has been consistent, principled and clear, and she deserves our support. She is also pragmatic and constantly seeking common ground. She chas ompromised a lot in order to get the final outcome that is in the UK’s long-term national interest, but she has never wavered on the long-term objective: that the UK must take back control over its laws, borders, money and trade relations with other countries.
Theresa May did not vote for the UK to leave the EU. Even now, she refuses to adopt a different posture and pretend that she has been through some conversion. But she sees the clear implications of the British people’s decision to vote Leave. Her commitment to the reasons for leaving are a matter of keeping good faith with the British people. The ballot paper said “Remain” or “Leave”. There were no if or buts. She believes to avoid a real schism fuelled by a sense of betrayal in UK society – which the referendum vote laid bare – the Government must deliver the substance of the Leave vote, not some fudged ‘Brexit in name only’, which is the objective or the continuing Remain campaign.
We should respect continuing Remainers for their commitment to their own principles, and understand that many now feel bereft of an ideal in which they truly believed. But those continuing this campaign represent the minority of British society. The Prime Minister understands this. She understands that the British people have spoken, and that now there is no turning back.