Committee for Exiting the European Union Hears From Government Department Permanent Secretaries

The No Deal option is a charade. It's unthinkable. To sum up evidence our Committee heard:

  • cost to UK exporters: £4.5-6bn; 
  • only 2% of British biz are prepared;
  • no proper plans for reciprocal healthcare.

It's time to end this chaos and pursue and EEA-based Brexit.

Sir Ian Cheshire, Government Lead Non-Executive, Cabinet Office, Bernadette Kelly, Permanent Secretary, Department for Transport, Jon Thompson, Permanent Secretary and Chief Executive, HMRC and Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, all appeared before the Committee for Exiting the European Union to answer questions about the Government's capability to deliver Brexit, coordination work across Whitehall, and the 76 technical notices published since the end of August.

Stephen Kinnock: Mr Thompson, I would just like to go back to this question of the WTO schedules that we would need to create or at least plug into, if we leave in the event of no deal. Can you just talk in a little bit more detail about how that would work in practice and how long you think it would take for the UK to establish a system based on those schedules, and whether you think that is feasible before 29 March?

Jon Thompson: I do not know the triggers. In answer to the earlier question, I was clear that the responsibility for deciding on tariffs is shared between the Treasury and the Department for International Trade. My responsibility would be somebody would hand me a schedule and we would put that into the CHIEF system so that it flowed through into the customs declaration.

Stephen Kinnock: Let us say that it is 30 March and there is a lorry carrying certain goods that needs to go through a border. If the schedules have not been agreed, settled and gone through the legislative process—and it is very interesting, Chair, that we perhaps need to get that clarity from the Department for International Trade and the Treasury as to how exactly that would work and what the decision-making process would be—although there is a system of barcodes, that lorry would not be able to pass through the border. Is that correct?

Jon Thompson: No. Sorry, that is not correct. If I link your question to that of Mr Graham, you are asking me to speculate but, if the UK does not have a tariff, we will not charge a tariff. That does not mean it cannot get through the border.

Stephen Kinnock: We simply would not charge a tariff at all coming in.

Jon Thompson: If somebody does not tell me what the tariff is, I cannot charge it. That would not prevent you getting through the border, because the assumption would be there are no tariffs and, therefore, you can go through the border. To be really clear—and I need to continue to reiterate this—that is not my responsibility; it is two other people’s. It would not stop anyone coming through the border.

Stephen Kinnock: If I could ask you to speculate—and I know it is not easy to speculate on these things—for us to export to the European Union, would it be safe to assume that, if we have left the European Union without a deal, they would apply WTO tariffs and schedules to our goods going into their markets?

Jon Thompson: To reiterate an answer that I gave, our assumption is that the European Union would apply the common external tariff. That is, if you like, the standard EU tariff. They vary that tariff depending on the free trade agreements that they have and also trade defence. It is really difficult to give you an example but, in general, there is a common tariff and then there is a bar on that. For trade defence, there are countries where they may want to increase that or they may want to reduce it because they have struck a free trade agreement with South Korea. You have a common and then you vary.

At the minute, the CHIEF system handles 44 variants to that common external tariff that the EU charges. The CBI tried to simulate what the cost would be to British exporters of paying the common external tariff, and its estimate was between £4.5 billion and £6 billion a year.

Stephen Kinnock: I have one more broader question to all three, really. I would like to say that I really admire the professionalism and the dedication that you are showing and the challenges that you are facing. From what you have said to us today, we have no idea what the French are doing. Out of 145,000 businesses, 1% or 2% seem to be making enquiries that would suggest that they are preparing for this. We have no real idea what is going to happen on reciprocal healthcare. We have a ludicrous amount of primary and secondary legislation that would have to be passed in order to be ready by 29 March in the event of no deal. Is it not absolutely clear that this no-deal thing is a charade and that it is simply unthinkable that the United Kingdom could leave the European Union without a deal?
Jon Thompson: It is for you to describe it how you want to describe it. I do not think it is for us to comment on the words that you use.

Stephen Kinnock: Would anyone else care to comment on that?

Sir Chris Wormald: No.

Bernadette Kelly: No.