Tuesday 30 June 2020

Red, white and blue bureaucracy

This morning, Bloomburg, announced it had been supplied with the draft presentation from HMRC on what will need to be done by exporters to the EU (an NI) from the UK.

Truck and freight vehicles without the right documentation will not be allowed onto the ferry or Tunnel shuttle.

It is the way it was always going to be, and will apply either with or without any kind of trade deal. If trucks arrive at the border, they will not be allowed to cross, so somehow the UK Government must ensure that only trucks reaching ports of the tunnel have the right documents, or chaos and queues will soon build.

The Government is proposing a new IT system, the Goods Vehicle Movement Service (GVMS), it hardly needs pointing out that Central Government record on IT system procurement is less than great.

Before a UK driver is allowed to cross to the EU, it will need to show that it has a valid reference number from the GVMS, known as a Goods Movement Reference (GMR).

You get a GMR by putting all the necessary data about what you're carrying into the GVMS.

RoRo is `roll-on, roll-off' ports like Dover. So a truck will have to show it has a valid GMR before it can get approval to proceed to the port.

Will trucks be held in lorry parks away from the border to check these? We await details.

Currently, UK trucks just drive to Dover, get on the ferry, and arrive in Calais, with minimal documentation requirements.

The English Channel is effectively a motorway. But as this powerpoint shows, Brexit turns it into a proper border crossing.

Even if Britain and the EU sign a free-trade agreement, this will be the system.

It is the consequence of leaving the EU's customs union -- all goods will require customs declarations. And the EU says it won't allow a truck in without a declaration.

In sum, deal or no-deal, trucks will have to go through the headache of a new bureaucratic process, which relies on an IT system that is yet to be built, from a govt with a poor record on IT projects.

Get it wrong, and the UK suffers economic pain.

This HMRC document begins to fill the truck-sized hole we reported last week. But still many questions remain. How will the government physically stop trucks arriving at ports without correct paperwork? What enforcement powers will they have?

When will the GVMS system be built? Will it be tested before it is used?

To conclude, some realism from HMRC about what has to be done to make Brexit work.

But also concern about new IT project, unprepared biz, extra costs of complying, and Brexit generally making life harder for key arteries of the U.K. economy.

And it has to be up and running at full capacity by the end of the year to go live on January 1st, or no freight can cross from the UK to the EU or NI. This is Project Reality, as frictionless trade and supply chains was only made possible by the SM and CU. Leave those and you put up barriers to trade, and increase costs for all who want to continue trading with the EU, and continue we will have to.

There will be some kind of trade deal sooner or later, as economics dictate, there just might be a lot of pain along with good, medicine and energy shortages until it is sorted. Pretending this isn't a problem or saying over and over again this won't happen is no longer an option.

The clock is ticking. Loudly.

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