POLITICS
05/06/2018 12:34 BST | Updated 05/06/2018 13:52 BST

Brexiteers's Customs Plan Would Increase Prices And Cause Hard Border With Ireland, MPs Told

'The consumer will bear the costs at the end of the day,' MPs were warned

Parliament
John Keefe, director of public affairs at Getlink – which runs the Channel Tunnel.

Brexiteers’ preferred post-EU customs plan would increase the price of goods and lead to a hard border Northern Ireland, experts told MPs today

MPs on Parliament’s Treasury Committee were warned the proposed highly-streamline customs arrangement – dubbed ‘max fac’ – would lead to serious repercussions for consumers as businesses passed on the costs of extra red tape.

Leading civil servants also confirmed the system would not stop a hard border between Northern Ireland and the Irish Republic – even though that is one of the Government’s ‘red lines’ in its negotiations with Brussels.

The ‘max fac’ plan is one of two proposals under consideration by the Government, with Brexiteers believing it delivers a greater break from Brussels than the ‘customs partnership’ model believed to be favoured by Downing Street.

John Keefe, director of public affairs at Getlink – which runs the Channel Tunnel – was asked in Westminster today how the estimated £20billion annual cost to businesses would be paid for if ‘max fac’ was rolled out.

He replied: “The consumer will bear the costs at the end of the day. Whichever route is chosen to pay for the costs up front, at the end of the day they get passed down through the chain.

Keefe added that businesses can “absorb” some of the cost, but warned: “If the impact is across the whole of the supply chain and the whole of the economy then inevitably at some point that gets passed down to the consumer.”

Appearing later at the same evidence session, HMRC’s James Harra explained the limits of ‘max fac’ when it came to the Irish border issue.

He told MPs: “We believe that the vanilla highly-streamlined customs arrangement would not in itself remove the need for a hard border in Ireland and therefore if you implement the highly-streamlined customs arrangement you have to have further specific arrangements in place in Ireland in order to achieve that.”

Hara said one such measure could be to relieve local businesses from any customs responsibilities – although this measure would have to be agreed by the EU.

Speaking to HuffPost UK, Labour MP Alison McGovern, who sits on the Treasury Committee, said: “As each day passes we find out that the Tories cannot deliver the Brexit they promised.

“For all who believe in the Good Friday Agreement, a hard border with Ireland is completely unacceptable. 

“As Jim Harra’s comments make clear, this means the Tories have no answer on how they will protect peace in Northern Ireland if Brexit happens.

“What’s more, plans currently on the table will cost us all. 

“I never thought I would have to tell the Tories that bureaucracy and red tape costs time and money.

 “But they have clearly forgotten this when it comes to Brexit.”