Trade experts question Theresa May's post-Brexit customs plan

Written by Emilio Casalicchio on 13 August 2018 in News

Alan Winters, an economics professor and director of the UK Trade Policy Observatory at the University of Sussex said the Chequers deal proposed by the Prime Minister was “fanciful”

Image credit: PA

The post-Brexit customs plan drawn up by Theresa May has been called into question by trade experts.

Alan Winters, an economics professor and director of the UK Trade Policy Observatory at the University of Sussex said the Chequers deal proposed by the Prime Minister was “fanciful”.

Meanwhile, businesses said they were struggling to recruit staff as fewer EU citizens have been making their way to the UK since the vote for Brexit.

Tariffs on goods entering the UK on their way to the continent would be paid for on arrival in Britain, under the strategy laid out by May.

The Government has argued it will be able to know the final destination of 96 per cent of all goods entering the country - meaning tariffs may have to be rejigged on just the remaining four per cent. 

But Winters said the analysis had taken into account all UK goods trade rather than just imports - the only sector which will have to pay entry tariffs.

In his own analysis, for the Times, he said when exports are stripped out the percentage of goods which could need tariffs rejigged at a later date would be four times as large.

He said: “The whole thing when you analyse it is pretty fanciful."

Meanwhile, business leaders told the paper it was a “fantasy” to suggest importers would be able to prove the final destination of every finished product arriving in the UK.

Jacob Rees-Mogg, the Tory chair of the pro-Brexit European Research Agency group of MPs, said the goods percentages were a “classic politicians’ statistical trick”.

But a UK Government spokesperson insisted only a “small proportion of overall trade” would be affected.

Elsewhere, the Chartered Institute of Personnel Development warned of a “supply shock” to UK firms struggling to find staff in the wake of the Brexit vote.

A survey of 2,000 employers found the number of applicants per vacancy had fallen since last summer across all skilled jobs levels, with firms being forced to hike wages as a result.

Migration from the EU has fallen to its lowest level since 2013, according to official figures.

Gerwyn Davies of CIPD said: “The most recent official data shows that there has been a significant slowdown in the number of EU nationals coming to work in the UK over the past year.

“This is feeding into increasing recruitment and retention challenges, particularly for employers in sectors that have historically relied on non-UK labour to fill roles and which are particularly vulnerable to the prospect of future changes to immigration policy for EU migrants.”

But a government spokesman said: “EU citizens make a huge contribution to our economy and we have been clear from the beginning of this process that we want these citizens and their families in the UK to be able to stay.

“After we leave the EU, the UK will continue to be the open country it has always been. We will have in place an immigration system that delivers control over who comes to the UK, but that welcomes the brightest and best who want to work hard and contribute.”

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