Delay on customs plan could mean that extending the customs union will be the only viable option, says Brexit Committee

• Contingency plan to stay in the customs' union may be required
• Lack of certainty on citizens' rights affecting UK and EU citizens

Today, the Committee on Exiting the European Union publishes its latest report on the progress of the UK’s negotiations on EU withdrawal. It highlights significant issues yet to be resolved in the remaining five months of negotiations.

On customs arrangements and trade, the Report says that 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.

The Government has indicated that neither the maximum facilitation proposal nor the new customs partnership, if agreed, is likely to be ready in time during the agreed 21-month transition/implementation period. The Prime Minister has alluded to “contingencies” that can be triggered in this eventuality but has not set them out. The Secretary of State 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.

The Committee Chair, Hilary Benn MP, commented:

“We are rapidly running out of time to get new trade and customs arrangements in place. Given that ministers are indicating that neither of the two options being discussed are likely to be ready by December 2020, when the transition period ends, the UK will in all likelihood have to remain in a customs union with the EU until alternative arrangements can be put in place.”

On citizen’s rights, the Report states that while the Home Office faces a number of significant challenges in delivering an orderly transition for EU citizens living in the UK, the Government has at least set out the general, overarching structure of the Settled Status application process. It is important that the process is quick, simple and available to people using a variety of technological platforms. There is little sign, however, that the same level of organisational planning has started in many EU Member States. Member States must set out what UK citizens should do to regularise their residential status, and communicate this information clearly.

Hilary Benn said:

“The Windrush scandal has undermined trust in the Home Office’s ability to register EU citizens and process their applications. But we are just as concerned that EU member states don’t appear to have begun to plan for or communicate how British citizens will be able to regularise their stay. Ministers should seek urgent clarification from other member states on this because British citizens need to know where they stand.”

On the Northern Ireland border, the lack of clear proposals for maintaining a frictionless border remains a cause of concern. Although the Government’s preferred method is to do this through the overall future relationship, it has yet to decide whether to pursue a ‘new customs partnership’ or ‘maximum facilitation’ as its customs arrangement. The Government has also not yet set out a detailed counter-proposal for the legally operative ‘backstop’ option, which the Secretary of State has now said would apply to the UK. The Report says that any backstop must be acceptable to all sides and calls on the Government to set out its alternative as a matter of urgency, while making it clear it will be seeking a permanent solution.

Hilary Benn said:

“It is clear that the EU is expecting clarification from ministers by the time of the European Council meeting in June about how the backstop will work. The Government needs to come forward with its proposals as soon as possible to demonstrate how an open border, with no checks and no infrastructure, can be maintained.”

Commenting on the overall state of the negotiations, Hilary Benn added:

“Twenty-three months after the referendum and fourteen 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.

“The clock is now running down and Parliament will need clarity and certainty by the time it is asked to vote on a draft withdrawal agreement in the autumn. We wait to see whether the promised white paper next month will provide it.”

Further information:

This is a short report drawing on evidence from the Secretary of State for Exiting the European Union, David Davis MP. The Committee will continue to publish reports on the progress of negotiations at regular intervals.