Exclusive: Theresa May was warned by business leaders that her Brexit customs bill is 'not fit for purpose'

Photo by Carl Court/Getty ImagesTrucks queue up as part of Operation Stack on June 23, 2015 in Dover, England. Ferry workers blockaded the port of Calais in a protest over job cuts earlier on Tuesday.
  • Exclusive: Business leaders warned Theresa May’s official customs forum that her flagship Customs legislation is “not fit for purpose,” in a previously unpublished letter.
  • The document – which government officials allegedly did not publish despite requests – warned that the legislation is unclear, highly flawed, contradictory, and had failed to consult business and industry sufficiently.
  • A senior figure in the group called the bill “a hurried piece of legislation cobbled together by people who haven’t consulted widely enough.”
  • MPs are set to vote tonight on the bill.

LONDON – Theresa May’s plans for post-Brexit customs arrangements are “not fit for purpose,” according to a damaging and previously unseen letter addressed to government officials by industry leaders.

MPs are due to vote on Monday night on the prime minister’s Customs bill, with both wings of the Conservative party threatening to rebel on aspects of the legislation.

However, industry leaders issued a damning assessment of the legislation in an unpublished document prepared for ministers, Business Insider can reveal.

Peter MacSwiney, a key figure in the government’s official Joint Customs Consultative Committee (JCCC) – a group comprised of nearly 30 major trade bodies – wrote to Treasury and HMRC officials in March, warning of significant flaws in the wording and content of the Trade Bill, which MPs will vote on this week.

MacSwiney’s letter was based on feedback from the major trade bodies which comprise the JCCC’s membership. They include the British Chambers of Commerce, the British Retail Consortium, the Food and Drink Federation, and the Royal Mail.

A hurried piece of legislation cobbled together by people who haven’t consulted widely enough

The letter warned that the government had failed to consult sufficiently with industry figures on the Customs Bill, said the legislation contained multiple instances of “ambiguous or conflicting wording,” and offered over twenty examples of lines in the bill which could cause significant problems to customs arrangements if implemented.

“We do not believe that there has been sufficient consultation with businesses and industry in developing the primary legislation,” the document warned in notes addressed to government officials who sit on the JCCC.

“The general view of the JCCC trade members is that the primary legislation is “not fit for purpose” and many aspects remain unclear, for example, with regards to transitional arrangements,” it said.

The document also states that members had warned:

  • That key government departments, specifically, HMRC, Border Force, and Port Health “have not been involved sufficiently” in the drafting of legislation;
  • That the document contains “ambiguous or conflicting wording,” for example on the sections concerning goods origin, customs valuation, and the legislation for VAT payment.
  • That there is “no clarity or guidance in the bill” regarding crucial issues such as customs valuation;
  • That the document contradicts itself at several other points, specifically on issues of origin, valuation, and IP disposal options;
  • That the legislation does not even mention key aspects of the UK’s current customs arrangements such as the appeals process, and HMRC tribunals.

Speaking to Business Insider, MacSwiney, said the Customs Bill – officially called the taxation (cross-border trade) bill – was “a hurried piece of legislation cobbled together by people who haven’t consulted widely enough.”

A government spokesperson said: “The Customs Bill ensures that the UK is able to operate standalone customs, trade, VAT and excise regimes effectively once we leave the EU.”

“Of course businesses and trade bodies have an important role to play in the policy-making process. We value their input and continue to engage with them on EU Exit customs matters, including the Customs Bill.”

The document was compiled in March following the most recent meeting of the JCCC, which is attended by a mix of industry figures, trade representatives, and officials from HMRC and the Treasury, and addressed to members who sit on the JCCC Customs Brexit sub-group.

Despite requests for the document to be published alongside the minutes of the meeting, which are publicly available, officials did not make it publicly available, amid concerns people would think it formed official government policy.

One leading industry figure told BI that the customs bill was a “shocking” piece of legislation.

“It’s poorly worded and terribly drafted,” the source said.

Read key parts of the letter below:

Screen Shot 2018 07 16 at 18.51.11Business Insider

Business Insider has contacted HMRC for comment.

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