Top economist says ‘APOCALYPTIC’ claims about post-Brexit customs plan are WRONG

Posted on Jun 1 2018 - 2:08am by admin

Dr Graham Gudgin, from the university’s Judge Business School, disregarded the figure and said it was based on “shoddy calculations”.

Dr Gudgin claims the final cost is more likely to be around £2billion, which is a significantly cheaper figure than the one announced by HMRC.

Maximum facilitation, or max fac, is the post-Brexit customs plan favoured by Boris Johnson, Liam Fox and Micheal Gove.

It would allow goods to be transferred with minimal border checks by using technology and a trusted trader scheme to ensure that Britain does leave the European’s customs union.

Last week Jon Thompson, chief executive of HMRC, told MPs at the Treasury Select Committee the “max fac” model could cost businesses billions.

He said: “I think you need to think about the highly streamlined customs arrangement costing businesses somewhere in the late teens of billions of pounds to operate – somewhere between £17billion and £20billion.

“It’s that sort of order and the primary driver is the fact there are customs declarations.”

However, last night Dr Gudgin, a member of the 50-strong group of pro-Leave academics, Briefings for Brexit, claimed the figure was “hugely inflated”.

He warned, along with John Mills, chairman of retailer JML and chairman of Labour Leave, that the Government should not make policy decisions based on the HMRC’s “shoddy calculations”.

They said: “The Treasury and HMRC have taken to presenting hugely negative calculations of the economic impact of Brexit without formal analyses that can be checked for accuracy.

“This must stop.

“We fully expect that HMRC’s wild forecasts will also be confounded by reality.”

To back up their argument the pair highlighted the real experiences of Mr Mills’s firm.

They said: “The retail company JML judges that customs administration costs amount to around one per cent of the value of consignments.

“JML does close to £100million of trade per annum with 85 countries and ships roughly 2,000 containers a year from one place to another in the world.

“About 80 per cent of these movements are on World Trade Organisation terms outside customs unions or free trade areas.

“The only additional paperwork requirements for business from being outside rather than inside the customs union are the production of certificates of origin and any necessary compliance certification.

“This can’t possibly cost £7billion a year or anything like it for firms trading with the EU after Brexit.

“As things stand at the moment inside the customs union all shipments from the UK to the EU27 involve invoices and dealing with VAT.

“If this sort of paperwork is a manageable burden, why should the addition of certificates of origin and compliance documentation be such a huge additional cost?”

Theresa May has been warned by some of Europe’s biggest businesses that “time is running out” and a free trade deal after Brexit must be as “frictionless as with a customs union”.

The Prime Minister met the European Round Table of Industrialists in Downing Street for discussions about future customs arrangements with the EU.

The business leaders said in a statement: “The uninterrupted flow of goods is essential to both the EU and UK economies.

“This must be frictionless as with a customs union.

“We need clarity and certainty, because time is running out.”

Downing Street claimed the meeting had been “open and productive”.

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