Why the customs union matters for the Grimsby area and what the future holds after Brexit
The port of Immingham
By Grimsby Telegraph | Posted: 16 Aug 2017
The Leave campaign promised many changes with a vote for Brexit.
But there is one thing they never wanted to change much and that’s the way the UK trades with the European Union.
Right now, it is decidedly uncomplicated. Goods – from wood chips to cars – come in to the country, while items made in the UK go out.
As long as the transfer of these goods is between the UK and another EU country, no one really blinks an eye.
And that’s all because Britain is a member of the customs union – a set of bloc agreements which removes tariffs (i.e. a financial charge) between the 28 EU countries and lifts the need for import and export checks, making business cheaper and faster.
But, in just over 18 months’ time, the country will no longer be part of the EU or its customs union and businesses could face more paperwork and costly delays to sell to, or buy from, Europe.
The Government yesterday published a paper looking at how a future customs arrangement with the EU could work after March 2019.
In it, it conceded that the UK would have to prepare for a cliff-edge whereby, overnight, British firms would have to start declaring everything they export to the likes of France and even, in some cases, apply for export licences.
The same would go for countries looking to sell to the UK, making imports more cumbersome.
That could create huge issues in North East Lincolnshire, home to the Port of Immingham – the busiest port in the UK by tonnage – and Grimsby Docks, a major port for the car industry.
Traders using the ports are not going to be happy if they face new import tariffs or lengthy waiting times for checks to be carried out.
Officials and ministers were clear yesterday that they are trying to avoid such a situation, and have proposed two options it would ideally like to see in place after Brexit.
The first – dubbed the “highly streamlined customs arrangement” – would look to “waiver” entry and exit declarations, see Britain sign-up to the Commons Transit Convention so goods travelling through Europe don’t have to stop for checks at every border, while also allowing for companies to self-declare their goods before entering the country, meaning less need for physical checks.
The second is a new customs partnership with the EU, which is more complicated as it would require new technology and would be dealing with different pricing structures for import and export tariffs.
It is also an “untested approach”, with the Government saying it would require further discussion with those in the industry.
Brexit Secretary David Davis
In the meantime, the Government has officially proposed an “interim” period after Brexit, a period of perhaps two years according to Brexit Secretary David Davis, whereby the current EU customs rules will still apply to Britain while both UK and EU-based companies adjust.
The caveat is that Britain wants to be able to negotiate new trade deals with countries outside the EU – something the customs union forbids – during that interim period.
The CBI called the proposal of an interim period a “critical first step forward” in the EU trade negotiations.
Associated British Ports, which runs the ports at Grimsby and Immingham, and the Hull and Humber Chamber of Commerce said they would be keeping a “watching brief” on how talks progressed over a future customs arrangement.
A spokeswoman for ABP said the company “welcomed” the Government's paper and said it would be working to ensure businesses had “efficient and reliable access” to the Continent.
“We are committed to working with our customers and the Government to make sure trade can flow as smoothly as possible following the UK’s exit from the Single Market and Customs Union,” said the spokeswoman.
“Underpinned by our ongoing commitment to invest in new infrastructure and facilities, ABP’s Humber ports will continue to provide British businesses with efficient and reliable access to European markets.”
David Hooper, external affairs manager at the chamber of commerce, said the paper would be discussed by its members and boards in the coming weeks.
“We are keeping a watching brief on developments and things will be discussed at length at our shipping and transport committee and by our five area councils,” said Mr Hooper.
“The chamber will take its lead from our member businesses, so it is probably too early to take a view on which option is best.
“David Davis has unveiled the Government’s preferred option but obviously that has to be agreed by the remaining EU members, so we will watch developments accordingly.
“We import a lot from Europe as well as export, so it is in nobody’s interest to make things more difficult than they need to be.”
The Royal Dock basin and the Grimsby Dock Tower lead the eye into this view of the Royal dock to the right and fish docks to the left looking towards the heart of Grimsby
The reason the Government has decided to publish details on the kind of future customs arrangement it would like to see is because it freely admits that the negotiations are not going as well as they would like.
One well-connected Whitehall official, speaking on an anonymous basis, told the Telegraph that the “early experience of negotiations hasn’t been as effective as it might otherwise have been” had they a vision of the future UK-EU relationship to share.
These proposals, the Department for Exiting the European Union (Dexu) hopes, will help move things forward at a sharper pace.
That has not stopped EU officials from criticising the ministerial suggestions.
Guy Verhofstadt, the European Parliament's chief Brexit negotiator, tweeted: “To be in and out of the Customs Union and invisible borders is a fantasy”.
There have been critics closer to home as well. Grimsby MP Melanie Onn said she found Mr Davis’ suggestions “far from ideal” and feared it could put the region’s seafood industry, which employs 5,500 people, “needlessly at risk”.
Any import delays could harm the quality of the seafood, while new security measures – such as new number-plate recognition software being mooted by HMRC – at Humber ports could prove costly.
Ms Onn said: “Grimsby, Immingham, and Hull ports are major employers here, and I’m worried that [what] the Government admit is their ideal outcome, before they’ve even started negotiating, would result in increased administration.
“This could cause delays and ultimately trade moving away from our shores, unless it was accompanied by major investment in our ports.
“It may not make a huge difference to the motor industry if it takes a couple of days extra to make it through border checks – no one checks the expiry date on a Nissan before they buy one.
“But senior voices in the seafood industry have been clear that border checks on their imports and exports must remain as simple, quick, and cheap as they are currently if these jobs are to be maintained.
“The Government shouldn’t put our biggest local industry needlessly at risk.”
Cleethorpes MP Martin Vickers, whose constituency is home to Immingham port, said any changes to security operations at Immingham could see “support from the Government” being called for locally.
The Conservative backbencher said a recent meeting with DExU minister Steve Baker and his officials demonstrated they were aware of the “importance of assuring that documentation is kept to a minimum” under any new regulations.
Addressing the critics, Mr Vickers said there was bound to be some tit-for-tat between UK and EU figures while negotiations were on-going.
“On all the issues, whatever the UK says, the European Commission will say, ‘That’s not quite what we were looking for’.
“This is a negotiation. They are going to be cautious and push things off as not being up to standard,” said Mr Vickers.
“What emerges from the negotiations will be what is in the best interests of all sides.”