Jon Thompson, head of HMRC, has been giving evidence (HERE) to the Treasury Select Committee where he claimed the cost to businesses, on both sides of The Channel, of the maximum facilitation customs model preferred by the Brexiteers would total around £17-20 billion per year. This is 200 million consignments annually at a cost of about £32.50 each for form filling on the part of exporters and importers.
A businessman, Richard Reed, has an article in The Guardian (HERE) in which he claims Max-Fac is an idiotic idea that will bankrupt British businesses.
HMRC's evidence was that Max-Fac would cost businesses about £20 billion every year but strangely the customs partnership where all UK imports are tracked to their destination will be cost neutral or even produce a profit! I find this surprising since it seems even more bureaucratic and intrusive - than the Max-Fac.
The £20 billion cost is likely to be a problem for British business and the EU. Will Brussels be happy to burden themselves with £10 billion a year of costs to help us? I'm not convinced. It is also going to be a problem for Brexiteers since they approvingly cited Mr Thompson last December (HERE) when he said, again in DEXEU Select Committee evidence on 29th November 2017, “We do not believe, and this has been our consistent advice to ministers, we do not believe we require any infrastructure at the border between Northern Ireland and Ireland under any circumstances.” He said that trade was within “a very local economy” to which the normal EU border arrangements "could not be applied".
Watching the video (HERE - from about 10:38) it's clear one of the things he based his evidence on was that the EU grant a derogation for "small traders" - something that the EU have already said is not feasible. This would cover "the vast majority" of trade and any checks on the rest would be "intelligence based" and would occur away from the border.
On SPS checks a Mr Bourne from DEFRA said the risks don't change post Brexit - implying everything will remain as it is - although he ( and other witnesses) admitted he didn't know what the EU would do. Well, the risks maybe don't change immediately but two things will. First we will become a third country with all that that means for EU law, and second the EU will assume we are going to diverge, otherwise why leave in the first place. So, assuming because the risks remain the same this means the EU and Ireland will allow the border to continue unchanged is another fantasy, a belief that the EU will treat us differently because we are an ex-member.
As Sir Ivan Rogers puts it:
There is no legal status of “being a third country which used to be a member and therefore can be treated radically better than other third countries”. There is no legal “half way in, half way out” option for either the Single Market or the Customs Union. There is therefore an asymmetry. If you are in, you can, within constraints, negotiate bespoke arrangements, carve outs, opt-outs, opt back-ins, and so forth. But once you are out of the legal architecture of the EU, the scope for bespoke arrangements is massively diminished.
