Britain’s ports will face “massive queues” and food will be left rotting in lorries at the border post-Brexit if the Government fails to fund an upgrade to the UK’s customs system, MPs have warned.
A new report by the Public Accounts Committee (PAC) claimed that the number of customs declarations made by traders which HM Revenue & Customs must process could increase five-fold to 255 million after the UK leaves the European Union.
Ministers started work on a new customs system before the EU referendum but the PAC said HMRC does not yet know how much it will cost to upgrade the new system to ensure it can cope with Brexit and funding has not yet been made available to increase capacity.
Meanwhile, the committee said the Government must also provide funding to upgrade the existing customs system so it can act as a contingency option if the new arrangements fail.
The report is likely to fuel concerns about the Government’s preparations for Brexit.
It comes after a secret letter emerged which appeared to show Boris Johnson and Michael Gove warning Theresa May that they were “profoundly worried that in some parts of Government the current preparations are not proceeding with anything like sufficient energy”.
Meg Hillier, the chairwoman of the PAC, said: “Failure to have a viable customs system in place before the UK’s planned exit from the EU would wreak havoc for UK business, trade and our international reputation.
“Confidence would collapse amid the potentially catastrophic effects.
“HMRC is under considerable pressure to deliver the new Customs Declaration Service (CDS) in time, but it does not yet have funding to increase the capacity of CDS to deal with the consequences of Brexit – nor to develop contingency options.
“This is deeply worrying. HMRC requires a relatively small sum to upgrade the current Chief system – a move which would provide some peace of mind to traders, many of whom are still operating with limited information and in great uncertainty.
“HMRC tells us it is merely ‘in conversation’ over Chief upgrade costs when, on behalf of business and the British public, it should be banging on the doors of the Treasury.
“HMRC must press the case to secure this funding now and ensure that, if other plans fail, customs will be fit for purpose.”
Concerns have previously been expressed about the impact Brexit could have on the UK’s ports if sufficient preparations are not made.
The PAC report paints a grim picture of what could happen if warnings are not heeded.
It states: “A failed customs system could therefore lead to huge disruption for businesses, with delays potentially causing massive queues at Dover and resulting in food being left to rot in trucks at the border.”
The report recommends the Treasury make sufficient funding available by December 2017 so that HMRC can increase the capacity of the new CDS.
It also calls for funding to be made available so that HMRC can prepare an “adequate fall-back option” just in case CDS is not ready for Brexit.
The report estimates that upgrading the existing Customs Handling of Import and Export Freight (Chief) system to ensure it can cope with the potential 255 declarations would cost in the region of £7million.
A Government spokesman said: "The Customs Declaration Service is on track for delivery by January 2019 and has the capacity to deal with a significant increase in customs declarations at the border.
"We've already allocated over half a billion pounds in funding to ensure a successful exit from the EU and we will have a fully functioning UK customs service on day one post-Brexit.
"HMRC will continue to operate the current service (Chief) in tandem with CDS during the transition from one system to the other. This will provide an additional level of contingency, should it be required."