Yahoo Finance IT chaos as clock ticks down to Brexit
Britain has yet to build a much-heralded IT system which will let trucks declare the goods they are carrying in advance before driving towards a port - with just six months to go before the Brexit transition ends.
The Goods Vehicle Movement Service (GVMS) is intended to help goods flow across Britain's borders and cut queues, especially at the port of Dover. But unlike France, the UK has still not tested its new customs system.
Speaking to MPs on the Brexit Select Committee, Tim Reardon of the Port of Dover said: “French customs specified and built their system that does exactly the same thing in [about six months] so it’s not impossible.
"If HMRC were to buy a licence for the French system that would be a very simple thing to do and traders would like it.”
MPs were also told that 30,000 to 50,000 customs agents would be needed from January 1 to cope with new border procedures.
Lars Karlsson, a former Swedish customs official and chief executive of KGH Border Services, said this would provide an opportunity for people who had lost their jobs due to the coronavirus crisis to retrain.
Nonetheless, he agreed that a lack of clarity from the Government about future customs arrangements has held preparations back.
Mr Karlsson said: “Before we know what the border procedure will look like, specifically on the UK side, it’s very difficult to test it.
“We need to know [where and how many] inspections are going to take place. Will they be done by the companies before they enter into the process of exporting and coming in for import or not?”
Meanwhile, a key car industry body warned that manufacturing volumes will sink to historic lows if no Brexit trade deal is reached.
The Society of Motor Manufacturers and Traders (SMMT) said it expects Covid-19 to cut annual car and light commercial vehicle production volumes by a third this year.
If a comprehensive, tariff-free trade deal is agreed with the EU by December then volumes will recover in five years, it said.
Without a trade deal, it predicts volumes will fall further to a level not seen since 1953. This would knock £40bn off revenues on top of £33.5bn of production losses due to the pandemic.
A third of workers in the automotive industry have been furloughed and 6,000 have lost their jobs this month due to global lockdowns which have hammered demand and forced plants to shut.
While showrooms in England and Wales are reopening and production lines are restarting, reduced demand and social distancing continue to weigh on productivity. The SMMT estimates that up to a sixth of jobs remain at risk.
Mike Hawes, the trade body’s chief executive, said: "Covid has consumed every inch of capability and capacity and the industry has not the resource, the time nor the clarity to prepare for a further shock of a hard Brexit.”
If Britain trades with the EU on World Trade Organisation (WTO) terms and UK-built cars face a 10pc tariff, the average car exported to the EU would increase in price by about £3,000, while additional customs duties, costs and paperwork would disrupt the sourcing of parts and components from the EU, the SMMT said.
Cars are the UK's most exported commodity, and last year 55pc of them went to the EU.
The WTO was more upbeat about the global picture in a separate announcement. It said that worldwide trade in goods is on course to fall by 18.5pc this year – much less than the worst-case scenario of 32pc it had forecast in April.
