Introducing new customs processes for trade with the European Union (EU) could add around £1.5bn in annual costs to the UK aerospace, defence, security and space sectors, an industry body warned today.
ADS, which has over 1,000 member firms across the sectors, has given five recommendations to the government in a new report out today to deliver “an ambitious deal that limits any future customs checks and allows free flowing trade” across UK and EU borders.
These include a transition period with the UK remaining an EU member state to avoid any cliff-edge scenario, and UK borders prioritising flow as opposed to control, with “streamlined compliance checks” to minimise delays as goods enter and leave the country.
ADS chief executive Paul Everitt said:
Potential annual costs of £1.5bn in our sectors from burdensome new customs processes would be a major concern to businesses and reduce our £10bn a year exports to EU nations.
These new costs from delays and bureaucracy when we sell the products of our ingenuity to our customers overseas will harm the UK’s capacity to compete in international markets, and weaken the ability of industry to generate growth and jobs.
The £1.5bn figure is based on research from the Organisation for Economic Co-operation and Development estimating potential costs of new customs processes.
Everitt added that under half of ADS’ members have IT systems in place that can manage new customs procedures, and three-quarters felt a transition deal was important.
“We need the government to listen to industry, agree a deal that builds on light-touch customs arrangements we already have in place, and a transition period that maintains our EU membership until businesses are ready to make the necessary changes after Brexit,” he said.
The five recommendations for trading arrangements in transition and post-Brexit:
- A transition period should see the UK remain an EU member state
- UK borders should prioritise flow rather than control
- The government should avoid future regulatory divergence with the EU
- The new customs regime for the UK should build on the existing EU regime
- The Government should work with Industry to develop detailed proposals