There will be a fivefold increase in customs checks at Dover and other UK ports after Brexit, an influential group of MPs has found.
The figure came amid warnings that confidence in new border arrangements has collapsed.
In its first statement on the matter, Her Majesty’s Revenue & Customs told the Treasury select committee it estimates that the number of customs declarations at Dover and elsewhere could rise from 60m a year to 300m a year after the UK leaves the EU.
HMRC also admitted it is no longer sure that it can deliver on time a new customs declaration system for all lorries coming in and out of the ports.
In a damning response, Andrew Tyrie, the Treasury select committee chairman, noted that the delivery of CDS was “in doubt”, with HMRC’s internal project management rating placing it in a “major risk” category. He warned that the “consequences of this project failing, or even being delayed, could be serious” and “much trade could be lost”.
Earlier this year, senior freight industry leaders including Eurotunnel said the introduction of customs checks at Dover after Brexit could cause gridlock in south-east England, with lorries queueing in Kent for up to 30 miles (48km) to get across the Channel.
They warned that Dover, which handles more lorries than any other port in Britain, had no room to accommodate checks for the 2.6m lorries that pass through it every year.
In a letter published on Friday to the committee, HMRC said 96% of customs declarations made in the UK are cleared electronically within 20 seconds.
About 3% of these are subject to checks for paperwork because the lorries are from outside the EU. HMRC’s national clearance hub clears 96% of these within two hours.
But it said “there could be a fivefold increase in customs declarations once the UK leaves the EU”, telling the committee that 25 systems at the borders need to be adapted for Brexit when the free movement of goods to and from Europe ends.
Chief among them is CDS, an IT programme HMRC describes as large and complex. It said the timetable for delivery was “challenging but achievable”. However, in the letter from Jim Harra, the director general of customer strategy and tax design at HMRC, it was revealed that prognosis for delivery had worsened in the past three months.
Under an internal red, amber and green project management rating, the project delivery status had gone from green in September 2016 to amber red on 31 January, he told the committee.
Tyrie said it showed that confidence in the successful implementation of “a project HMRC describes as ‘business critical’ has collapsed” . He said the project had gone from green, meaning it was “successful” and “on time”, to amber red ... meaning it was “in doubt”, with “major risks” and needing “urgent action in 67 days.
“Customs is at the heart of the Brexit debate,” Tyrie said. “It is part of the essential plumbing for international trade, and ensuring it continues to function smoothly post Brexit has to be a priority for the government.” He said the project now “merits a high degree of scrutiny by parliament”.
The complexity of the work required is laid bare over an 18-page submission by HMRC. It says more than 20 agencies are involved at the border, with new IT systems needed in everything from VAT, to alcohol and tobacco warehousing, to databases on trader registers.
HMRC is also planning blind, with no visibility on whether tariffs will be imposed on trade to and from the EU after Brexit.
In addition, passport and visa, or work permit, checks will be needed for EU drivers who travel into the UK. At present, there are no visa requirements because of the free movement of people under EU law.
Theresa May’s Lancaster House speech in January, when she set the UK on course for a hard Brexit border and an exit from the customs union, will have added to the burden on HMRC planning. The challenges it is experiencing shine a light on the administrative headaches arising from Brexit, with new regulatory regimes expected across all industries and services.
