HMRC says ‘max fac’ customs system preferred by Brexiters could cost business up to £20bn per year – as it happened

Mike Russell, the Scottish government Brexit minister, was more blunt. He posted this on Twitter.

(@Feorlean)

Boris Johnston says he would like a #Brexit plane to allow him to travel the world , telling everyone how great things will be in the post EU UK. I think I have found the perfect candidate , which is presently sitting on an Icelandic beach …. pic.twitter.com/R7mbYfF41V

  • Labour’s attempt to force the government to slash the pay of transport secretary Chris Grayling has failed after being voted down by MPs. As the Press Association reports, the motion to cut Grayling’s pay by £2,400 – the cost of a season ticket to London from his Epsom and Ewell constituency – was tabled after Labour deemed that his handling of the East Coast Main Line franchise agreement had “fallen desperately short” of a minister. In a scathing attack, shadow transport secretary Andy McDonald accused Grayling of being “asleep at the wheel” and said he was “incapable of being direct with members of parliament and the public alike”. He said:

The motion to slash Grayling’s pay was voted down by 304 votes to 271

That’s all from me for today.

Thanks for the comments.

At a press conference in Chile Boris Johnson, the Brexiter foreign secretary, was asked about the Brexit minister Suella Braverman’s comment to a committee this morning that MPs will have to vote on a financial payments to the EU before a legally-binding agreement has been reached on the future trade relationship. (See 9.57am.) He played down the signifcance of this, telling journalists:

Boris Johnson (left) after holding a press conference with Chilean foreign minister Roberto Ampuero at the Ministry of Foreign Affairs in Santiago, Chile. Photograph: Stefan Rousseau/PA

From George Parker, political editor of the Financial Times

(@GeorgeWParker)

Brexit just got crazier. Head of HMRC warns that the so-called “max fac” customs proposal being studied by the cabinet would cost business £17bn-£20bn a year. That is about double the UK’s annual net contribution to the EU. So why are they even considering it?

From George Osborne, the Evening Standard editor and former Conservative chancellor

(@George_Osborne)

What a bargain this is all turning out to be …. BBC News – Brexit: Technology-based customs system ‘could cost £20bn’ https://t.co/W6ICo5eE47

From the FT’s Jim Pickard

(@PickardJE)

Chief executive of HMRC thinks “max fac” could cost companies up to £200bn over a decade: yet Eurosceptic Tory MPs still believe they are *pro business* https://t.co/b7ySOyjQs6 pic.twitter.com/Pja40dFjjT

From Hugh Bennett, deputy editor of BrexitCentral

(@HughRBennett)

HMRC offers hypothetical figure of £17-£20bn cost of customsIn the real world, former Swiss Foreign Secretary Prof Michael Ambuhl says the cost of customs is 0.1% of the value of trade for Switzerland – translates to around £500m a year for the UKhttps://t.co/SE6hUuELmq

And Jon Thompson, the HMRC boss, also explained why he thought the new customs partnership (NCP) proposal could cost business nothing once it was up and running.

The NCP would involve the UK collecting tariffs on imports at the EU rate on behalf of the EU and then reimbursing firms if the goods were only sold in the UK and if the UK tariff on said goods was lower than the EU one.

Thompson said that setting up the system would cost around £700m.

After that, he said, “you could argue that the NCP has a net cost of zero or less, depending on the tariffs.” He explained:

Thompson said that, if the UK were to cut all tariffs on goods to zero, the maximum amount that British firms would have to pay would be £3.4bn. That would be the amount they would be paying because they were paying EU import tariffs on goods zero-rated by the UK.

But the firms would be able to claim that money back, he said.

Downing Street has dismissed the HMRC figures about the cost of “max fac” as…

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