Labour is revealing in the full the leaked letter from the Secretary of State for International Trade Liz Truss to Michael Gove and Rishi Sunak highlighting the division and disarray at the top of government on the UK’s EU border preparations.
The letter, sent on 8 July, reveals there are still many unanswered questions ahead of the ending of the transition period between the UK Government and the European Union on 31 December 2020. It also reveals the serious concern between Cabinet Ministers at the Government’s current lack of preparedness.
Rachel Reeves MP, Labour Shadow Chancellor of the Duchy of Lancaster and Shadow Cabinet Office Minister, has called on the Government come to the House of Commons to explain and address the concerns in the leaked letter, saying “This leaked letter lifts the lid on a growing sense of chaos and confusion between Cabinet Ministers at the Government’s complacent approach to vital preparations ahead of 31 December. There is growing alarm from the business communities in Northern Ireland and increasingly in Britain that Ministers aren’t being entirely open about the state of preparations.
“These issues will affect countless businesses and jobs and are simply far too important to be left to written correspondence like this. This extraordinary letter deserves answers, not just given to the House of Commons, but to the industries and people who stand to be affected if the Government gets this badly wrong.”
Liz Truss’ letter highlights four areas of concern:
- The risk of a challenge from the WTO for the UK’s desire for no border checks for EU imports to Great Britain for the first six months of 2021.
- The lack of plans and timescales for tariff declaration systems, border controls and necessary infrastructure for ports in the UK.
- Detrimental implications for tariff collection as a result of the staging approach for EU imports to the Great Britain
- A fear that the dual tariff system will not be in place for January 1st 2021 in breach of prior commitments made to Northern Ireland in the government’s Command Paper.
Transcript of leaked letter from Liz Truss:
The Rt Hon Michael Gove MP
8 July 2020
Dear Rishi and Michael,
I am writing to you to set out my key areas of concern on border policy risks and readiness for the end of the transition period and to seek your assurance that these concerns will be addressed. This letter comes in advance of the Border Operating Model publication on 13 July, where the UK’s proposals for the border will come under renewed scrutiny, both on the domestic and international stage.
My key concerns are outlined below:
- The Staged Approach and WTO Challenge — When we exit the Transition Period, the UK will be vulnerable to WTO challenge regarding its border regime. This is especially relevant concerning the implementation of the NI protocol and the application of the staged approach. These measures could significantly impact on the UK’s reputation at the WTO and I would appreciate your assurance that full border checks for EU-GB goods will be implemented no later than July 2021 and that all messaging will clearly reflect this point. I would also like to underscore that, where there is a risk of legal challenge at the WTO, departments are responsible for mitigating the risk and for funding the costs of any defensive trade dispute brought against their measures. Given this risk, I was pleased to hear that following the XO meeting last Friday, it was decided that the temporary waiving of export declarations will not be included in the publication. I would want to be part of any decision to revisit this, either with reference to the publication, or plans thereafter.
- Controls at the Border — I recognise there are challenges to delivering tariff declaration systems on both EU and Rest of World (RoW) imports but, to ensure we can develop appropriate handling plans for national and international stakeholders, it is essential that my department has a clear view of operation delivery plans, timescales and risks going forward. This is also particularly important for controlled goods at those EU-facing ports where the infrastructure to implement controls does not currently exist. Given the legal, reputational and security risks, I would like assurances that we are able to deliver full controls at these ports by July 2021 and that plans are in place from January to mitigate the risk of goods being circumvented from ports implementing full controls.
- Tariff Assessment and Collection — I have some further concerns about tariff collection due to the staging in approach, especially around the increased likelihood of circumvention, where RoW traders could import their goods via the EU. This would undermine the effective operation of our trade policy, as well as create significant handling difficulties with negotiating partners. For example, it might lead to remedy tariffs being circumvented, due to a lack of checks at the border, in addition to impacts on TRQs. I therefore would like firm assurances that mitigation against such risks are in place. Further, I am seeking assurance that tariffs on goods from RoW, specifically from countries where the Trade Agreements Continuity programme applies, will also be payable from 1 January 2021 and will be collected within one month as is currently the case.
- Northern Ireland Protocol risks — I understand that the digital delivery of the dual tariff system (both EU and UK tariff) in Northern Ireland is a high risk and that HMRC are planning to apply the EU tariff as a default to all imports in NI on 1 January 2021. This is very concerning as this may call into question NI’s place in the UK’s customs territory. Failure to deliver the UK tariff digitally in NI, would have political, legal, and reputational risks. I am keen to see HMRC and BPDG delivery plans, specifically on how both the UK and EU tariff will be digitally implemented, including detailed mitigations, and where there are risks to delivery by 1 January 2021. These plans should also include details of when commodity code divergence will be delivered for the whole of the UK.
As we fast approach the end of the transition period, we need to ensure that the UK border is effective and compliant with international rules, maintaining our credibility with trading partners, the WTO and with business. I encourage the continued close cooperation of officials in our departments to achieve this.
I am copying this letter to the Home Secretary.
The Rt Hon Elizabeth Truss MP
Secretary of State for International Trade & President of the Board of Trade