MPs demand to know how long UK will stay in EU customs union

The government should urgently set out whether it plans to extend the UK’s transitional membership of the customs union beyond 2020, given the likelihood that no replacement plan will be ready in time, the Commons Brexit committee has said.

In an often damning update on the progress of departure, the cross-party committee of MPs said it was “highly unsatisfactory” that nearly two years after the referendum, ministers had not even set out what post-Brexit trading and customs arrangements they hoped to make.

The report – which was agreed by all the committee’s members, including the Conservative Brexiters Jacob Rees-Mogg and Peter Bone and the DUP’s Sammy Wilson – also issued a warning over progress on citizens’ rights.

It said the Windrush scandal had “undermined trust in the ability of the Home Office competently to register EU citizens living in the UK” and process their status in time.

A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.

Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.

It said that although planning for this was under way in Britain, in many other EU states where UK citizens were living little work had been done on what they would need to do to keep their residential status. It said the government should “seek urgent clarification from the EU27”.

Hilary Benn, the Labour MP who chairs the committee, said the “clock is now running down”, and MPs would need considerably more clarity before being asked to vote on a draft withdrawal agreement in the autumn.

“Twenty-three months after the referendum and 14 months since the triggering of article 50, we still don’t know what the UK’s future relationship with the EU will be on trade, services, security, defence, consumer safety, data, broadcasting rights and many other things,” he said.

The 33-page report noted that one particularly urgent area was a future customs relationship, and the associated issue of how goods would pass across the Irish border.

The government had indicated that neither of its mooted ideas – maximum facilitation or a customs partnership – would, even if accepted by the EU, be ready in time for the end of the 21-month transition period, the report said.

“The prime minister has alluded to ‘contingencies’ that can be triggered in this eventuality but has not set them out. The secretary of state [David Davis] has ruled out any extension of the customs union but in the absence of any other plan, such an extension will be the only viable option,” it said.

The MPs said it was “a matter of urgency” for the government to set out any plans for customs beyond 2020 – notably whether this was likely to include seeking an extension to the transition period.

Similarly, while the committee said it backed Theresa May on rejecting the European commission’s current backstop plan for Northern Ireland, as it would place a customs barrier across the Irish Sea, it said the prime minister urgently needed to set out the UK’s alternative idea.

Concluding the report, the MPs said: “It is highly unsatisfactory that nearly two years after the referendum, ministers have yet to agree, and set out in detail, what kind of trading and customs arrangements they wish to seek in negotiations with the European Union.

“There is a great deal of continuing uncertainty about the government’s plans for providing parliament with its meaningful vote, the type of analysis that will be provided to aid scrutiny and the length of time that parliament will have to consider the deal.”

Downing Street has repeatedly ruled out an extension to the transition deal. Asked about this idea on Thursday, May’s spokeswoman said: “We have been clear that there will be one implementation period that will end in December 2020.”

She added: “We are working on various options, including our future customs relationship, and out intention is that we will be ready and will end the implementation period as agreed in December 2020.”