Government asked about new HMRC impact analysis

08 October 2019

John McDonnell MP, Shadow Chancellor of the Exchequer, asked Jesse Norman MP, Financial Secretary to the Treasury and Paymaster General, an urgent question on HMRC impact analysis of customs agreements in the event of a no-deal Brexit.

Yesterday, the Government published the third edition of the HMRC impact assessment for the movement of goods if the UK leaves the EU without a deal. The report was originally published in September 2018; this edition includes further details of transitional arrangements for customs and excise easements, and safety and security declaration requirements. The Shadow Chancellor of the Exchequer, John McDonnell, asked the Financial Secretary to the Treasury and Paymaster General for a statement on this assessment.

The Financial Secretary to the Treasury and Paymaster General, Jesse Norman, reiterated that the Prime Minister wanted a deal, but that if a deal was not reached then the UK would leave the EU on 31 October 2019. He emphasised the importance of supporting businesses at this time and detailed the key points on customs and VAT laid out in the assessment.  

The Minister told MPs:

"The last thing businesses need is more uncertainty and delay. A key part of those preparations [for a no-deal Brexit], Mr Speaker, is to ensure that there is a functional customs, VAT and excise regime on exit […] To support the latest bunch of statutory instruments debated by this House yesterday, the Government published a third edition of the overarching impact assessment of the movement of goods if the UK leaves the EU without a deal."

Responding on behalf of the Opposition, the Shadow Chancellor of the Exchequer, John McDonnell, stressed the costs of these new customs arrangements and the ramifications this could have on the UK economy and businesses. He also highlighted recent reports that said Brexit would dramatically increase Britain's debt and stated that the Government's position decision to leave with or without a deal was politically driven.  

The Shadow Minister said:

"The Government's own assessment shows that their no-deal Brexit policy will introduce – and I quote from the assessment – 'significant ongoing administrative costs impacting on the UK and EU businesses of all sectors'. It is, Mr Speaker, an avalanche of paper work descending on British businesses in the form of import, export, safety and security declarations. The burden will cost our business sector an annual £15 billion in administrative costs. This doesn't even include the cost of complying with new VAT procedures, which will hit our vital service companies."

Image: PA

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