The team that created a “one-stop-shop” system to streamline Singapore’s international trade arrangements has been hired by HM Revenue & Customs to advise on the potential to introduce a similar post-Brexit system for the UK.
HMRC chief executive Jon Thompson said the creation of a “single window” for all import and export related interaction with government departments and agencies was a piece of “blue-sky thinking” the tax-collection agency was currently exploring as part of the Brexit process.
Talking to MPs on the Treasury Select Committee yesterday, Thompson said that the department had looked at a range of different countries’ relationships with the EU and other nations as part of its exploration of the UK’s future relationship with the EU.
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Ministers last month mooted two potential post-Brexit models for the UK’s customs relations with the EU: a “highly streamlined” version that would continue some existing arrangements and seek technology-based solutions to ensure customs procedures remained as frictionless as possible; and a “new customs partnership” that would remove the need for a UK-EU customs border. One possibility for the latter approach could see the UK mirroring EU requirements for imports from the rest of the world where the final destination was the EU.
Thompson told MPs he believed that the “highly streamlined” system would take up to three years to implement, while the new partnership model was anticipated to take five or more.
“We believe they are both deliverable, but as the paper says they are very different in implementation terms,” he said.
Thompson also told MPs that in addition to looking at customs relations between the EU and its non-member-state neighbours, HMRC staff had also been exploring customs agreements between the US and Canada, and those involving Singapore and Australia. He said the latter two were of interest because they were top-rated customs organisations in the World Bank rankings.
“One of the great advantages of Singapore is that they have managed to put together all government agencies that have an interest in the border into a so-called ‘single window’,” he said.
“If you’re an importer or an exporter you can have a one-stop-shop to do everything you need to do and progress on.
“At the minute, the situation with HMG is that there are as many as 26 different government organisations who have an interest in the border, some of which are not very well known or appreciated.
“We have started some even more blue-sky thinking about how difficult it would be for us to integrate all 26 into a single ‘window’, and that really is a very long-term project.”
Thompson said it was “conceptually possible” for the government to create the customs single window, but that it was a “mega-project” anticipated to cost between £500m and £800m and which would take five to seven years.
“We have been asked to work out whether there is a business case for that, because there would be a noticeable change to GDP in my opinion, because it would make it much smoother to import and export if you only had to go to one place instead of multiple different departments,” he said.
“We have hired the team that implemented the Singaporean option to say ‘well… could you do that in the United Kingdom?’”
Despite having triggered the Article 50 process that sets a March 2019 date for the UK’s departure from the EU, negotiations on new customs arrangements have yet to commence.
Earlier in Thursday’s select committee session, HMRC director general for customer strategy Jim Harra told MPs the department would need a steer on any interim period for customs relations between the UK and the EU "in the next few months" to avoid wasting money on contingency arrangements.
He said that without clarity on arrangements for March 2019, the tax-collection agency would have to start contacting UK traders who could be “impacted for the first time by any changes” that could come into effect from that point.
“What we would like to see sooner rather than later is a decision on the interim period,” he said.
“We think that an early decision on that would help HMRC and UK traders, and EU member states and their traders as well. Otherwise people are going to have to plan for a contingency.”
Harra said that if an agreement was reached on the interim period within the next few months HMRC could delay – or postpone indefinitely – contacting UK-based traders who solely exported to EU member states.