Jon Thompson

Max-Fac customs model could cost UK business £20bn

Labour Party

The customs model favoured by Brexit Secretary, David Davis, and other senior Government ministers could cost business as much as £20bn a year the head of HMRC has warned.

The Government department said, during a hearing at the Treasury Select Committee, that the so called “Max-Fac” model-which relies on technology to carry out border checks-is a significantly more expensive option than the alternative.

It is yet another blow for the divided Government, and perhaps in an attempt to ‘shrug some embarrassment, senior cabinet figures claim they were never briefed by HMRC that the cost could be so high.

Meanwhile Theresa May’s partnership model, the alternative model, has come under fire from within her own Government and those such as Johnson, Gove and Rees-Mogg have reportedly applied pressure on the Prime Minister to press ahead with the Max-Fac option instead. And far from denying the £20bn claim Downing Street said it had asked for more work to be done on the various customs models. In other words, the Government isn’t certain about which model it should propose.

Either way Jon Thompson advised that it would take around “three to five years to begin implementing the UK’s new customs arrangements, depending on which of the two options were decided upon by the government.”

It is yet another example which reveals the Government is lacking credible evidence for it to make any decisive decisions relating to how it should proceed on this matter. And despite explicit warnings from a senior civil servant, some senior cabinet members maintain that the “Max-Fac” model, which will be prohibitively expensive for many businesses and is therefore hardly viable, is still favoured.