The Government’s customs proposals do not solve the problem

The Brexit 'war Cabinet' is meeting to agree the UK’s preferred customs approach. In the meeting, ministers will be asked to choose between two options the UK put forward last September: a highly streamlined customs arrangement, now dubbed “maximum facilitation” and the customs partnership. Neither is the solution the Government needs.

The ‘maximum facilitation’ option doesn’t solve the Irish customs problem

The 'maximum facilitation’ (aka 'max-fac'), takes the best of the best from international precedent. It combines data sharing, continued UK access to certain EU-wide customs systems and trusted trader schemes with a number of unilateral measures to streamline domestic processes.

The UK proposal goes further than most customs agreements. New technology using number plate recognition would ease flow at ports like Dover and Calais, while negotiating waivers for certain bits of paperwork would ease the burden on traders.

Add all of the different elements up and you have something which is pretty much world leading in terms of customs agreements. It should not present issues of principle to Brussels (though they may be wary about precedents they are setting for other borders). But even if everyone is signed up as a trusted trader – or exempted – it still results in a hard border. There is a need for infrastructure, like cameras, to make it work (something has to recognise those number plates). Acceptable in Dover or Holyhead – but not along the 200+ Irish border crossings. 

The ‘customs partnership’ option is practically and politically infeasible

What was the second option in September now appears to be the Government’s lead option. It is designed to give the UK the benefits of customs union membership, but without the need to sign up to a common external tariff. This option takes a different approach: rather than tried and trusted, it is innovative and untested.

The proposal last September was a statement of ambition with the Government’s paper proposing both sides “jointly consider innovative approaches”. "One potential model", as the Government puts it, would see the UK charging EU tariffs at its border, for goods destined to the EU. “A tracking mechanism” would allow an importer to claim a refund if the goods ended up in the – presumably lower-tariff - UK.

So far the UK Government has published just five paragraphs on the partnership, almost half of which is caveat and context. The EU has said the suggestions put forward are unrealistic. Jacob Rees-Mogg is rather less complimentary. It seems that the customs partnership is either too “creative and imaginative” or seen as ECUNO – exiting the customs union in name only. Would a customs union be required to cover the unspecified time necessary to develop and implement the tracking mechanism?

The Cabinet needs to agree to a workable solution

Six months have passed since the UK Government put forward these two options. Work has continued, consultants have been brought in and presumably thinking has moved forward. The key Cabinet meeting this week needs to come to a judgement on the preferred approach. That approach needs to be feasible, negotiable with the EU and sellable to Parliament. There is no point in getting the Cabinet to agree to something that fails those tests.

A customs agreement on its own cannot eliminate the need for checks. But nor would a customs union.

If the Government wants to avoid a border in Ireland and keep lorries moving freely through Kent, it needs to deal with regulatory checks as well. A nice new customs arrangement is necessary, but it’s not sufficient.