The UK government came under unprecedented attack from its own spending watchdog over Brexit, criticising the lack of preparedness for new customs arrangements.
Sir Amyas Morse, head of the National Audit Office (NAO), warned the UK may not be ready to launch new customs controls when it leaves the EU in 2019. He said the government´s preparations for Brexit were at risk of collapsing like a “chocolate orange”.
The unusual intervention came on the day the UK government published the repeal bill, the legislation that ditches the European Communities Act 1972, and which needs to be passed by parliament before the UK leaves the EU in 2019.
Morse highlighted a state of disunity at the heart of the government, while lamenting the inflexible stance of ministers.
The NAO head expressed concerns that the UK would not have a viable system in place to monitor imports and collect taxes that may be due at customs points.
“What we don’t want to find is that at the first tap, this falls apart like a chocolate orange,” said Morse.
He also said it would be a “horror show” if customs officials had no option other than to manually process imports.
An estimated £34bn in tax could be on the line if a new computer system is not up and running by the time the UK leaves the EU.
According to official estimates, an additional 180,000 entities will be forced to make customs declarations if the UK follows through on Prime Minister Theresa May´s pledge to leave the customs union. Annual customs declarations are forecast to increase from 55 million to 255 million.
Morse said the government needed to better understand the distinct needs of traders that will be making customs declarations due to Brexit, while drawing up an alternative plan if the new computer system is not ready in time.
However, Morse claimed he was receiving only “vague” responses from key government departments with regards to Brexit preparations.
Federation of Small Businesses (FSB) chairman Mike Cherry, warned small businesses could suffer the most from additional bureaucracy if the UK´s new customs declaration service gets off to a poor start.
“It’s extremely concerning that the UK’s new customs system may not be ready in time for Brexit, potentially resulting in massive delays to trade and leaving thousands of businesses in the lurch,” said Cherry.