Considered in Grand Committee
That the Grand Committee do consider the Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2021.
Relevant document: 22nd Report from the Secondary Legislation Scrutiny Committee
My Lords, we are here to discuss a statutory instrument related to the introduction of customs controls. I note that this instrument was included for information in the Secondary Legislation Scrutiny Committee’s 22nd report of the Session 2021-22, although it was not drawn to the attention of House. This instrument will also be debated in the other place tomorrow.
The instrument delays for a further six months the introduction of safety and security declarations on the movement of goods into Great Britain where they were not required before EU exit. The Government are introducing it as part of a programme of measures to phase in the introduction of border controls in order to provide relief to businesses given the unforeseeable and ongoing impact of Covid-19 on businesses and global supply chains. The waiver extension will provide more time for businesses that move goods into Great Britain from the EU to prepare for new customs requirements. This is to avoid potential disruption to UK supply chains and at our borders. With this extension, safety and security declarations on these imports will be required from 1 July 2022, instead of the start of next year.
I will now focus on the detail. The UK’s approach to safety and security requirements in its customs regime is governed by the overarching principles in the World Customs Organization’s SAFE framework of standards. The SAFE framework aims to support and facilitate secure supply chains and trade at a global level, while helping to tackle movement of illicit goods such as drugs and weapons. It requires customs authorities to collect and risk-assess data on the movement of goods before they arrive in or depart their customs territories. The data adds to other intelligence sources to keep borders secure. Business and traders are required to provide data in the form of safety and security declarations.
Since the transition period ended on 31 December last year, most traders moving goods from Great Britain to the EU have been required to submit safety and security data on their movements. This has contributed to the intelligence available to Border Force to help it target checks effectively. The EU also requires safety and security declarations on imports and exports. It is worth mentioning that, following the end of the transition period, Border Force and the Home Office continue to co-operate closely with EU authorities and other law enforcement partners overseas to protect our communities and keep our borders secure.
At the end of the transition period, safety and security declarations also became due on imports to Great Britain from the EU. However, the Government granted a temporary waiver, meaning that goods imported into Great Britain from the EU, and from other territories such as Norway, where declarations were not required previously, do not need safety and security declarations. This waiver was designed to give businesses more time to prepare for the introduction of new border controls, and was part of the so-called phased approach, introducing customs controls in stages.
I make it clear that there is no safety or security concern arising from this waiver. While safety and security declarations provide information used to help risk-assess goods entering and leaving Great Britain, they are not the only way we can manage these risks. Other forms of intelligence continue to be used to keep our borders secure, as they were before EU exit, when safety and security declarations were not required for these movements.
Safety and security declaration requirements for these movements were due to be introduced from 1 January 2022. However, as noble Lords will know, in September, the Government announced that we would grant an extension to the current waiver. This extension is due to last for six months. The waiver will now end on 30 June 2022, meaning that safety and security declarations will be required for these imports from 1 July 2022.
This measure does not have any impact on the safety and security declarations required on goods moved from the rest of the world, which are already being submitted.
The extension has been designed to support businesses facing challenges in preparing for this new declaration requirement due to the unprecedented disruption caused by the Covid-19 pandemic. It will benefit UK-based businesses, but we are thinking beyond our own borders. The additional time will be particularly helpful for smaller hauliers, who may not speak English as a first language and are likely to have suffered from a lack of resource. The pandemic has had longer-lasting impacts on businesses than many observers expected—both in the UK and around the world. Giving businesses more time to prepare for new customs requirements will help avoid potential disruption to our borders and supply chains, and protect UK manufacturers and consumers.
Safety and security declarations were not required for imports from the EU before exit day. As a result, this extension will not significantly increase security risks to the UK. Border Force will continue to use intelligence sources to risk-assess the movement of goods and to secure our borders in the same way as it does now.
This instrument does not affect safety and security requirements in Northern Ireland. Northern Ireland remains aligned with the EU’s safety and security zone, as governed by the terms of the Northern Ireland protocol. This means that there are no safety and security requirements for goods moved between Northern Ireland and the EU.
This instrument also has no effect on safety and security declaration requirements for goods imported from the rest of the world, for which these declarations will continue to be required.
In conclusion, this waiver on the requirement to submit safety and security declarations will allow us to support businesses affected by Covid-19 and related global supply chain issues. It will give them additional time to prepare for the new requirements. I beg to move.
My Lords, I am grateful to the Minister for introducing this statutory instrument. It is the latest in a long line of postponements to the introduction of post-Brexit customs controls. I experienced a strong sense of déjà vu when I saw the original announcement of this extension back in September. That sensation returned upon seeing this statutory instrument listed in Forthcoming Business.
I believe this is the first time that the Minister has dealt with this issue, so he will no doubt find it a novel experience. This probably cannot be said for his officials. I am sure that, despite not being able to say so, they are frustrated that they are still dealing with this, rather than turning to other issues.
We are fast approaching a calendar year since the end of the transition period. It is considerably longer since the original withdrawal agreement and accompanying framework for the future relationship were agreed. It is more than six years since the referendum itself. During that time, the UK Government—whether led by Theresa May or Boris Johnson—were clear that the UK would exit the EU single market and customs union and that this would require a variety of new checks as goods entered and exited the country. While the finer points of detail were left until late in the negotiations led by the noble Lord, Lord Frost, on the EU-UK Trade and Cooperation Agreement, the general destination was clear. The Government knew enough to start their work ahead of time. We were told that work was in hand.
We have travelled so far in terms of time elapsed, yet Ministers do not seem to be making a huge amount of progress to deliver on their long-standing promises. HMRC’s justification for this extension is unchanged from the last time we debated this policy: it is to allow industry time to adjust, particularly in the light of the pressures caused by Covid-19 and the wider supply chain disruption.
I am completely in favour of supporting industry through challenging times, but even here the Government’s response has been lacking. Of course, this is just one part of a package, but that package has been criticised by various sectors, including agriculture and the road haulage industry. When we first debated waiving various import and export requirements in 2019, we were told that the powers were a contingency measure that would likely not be needed. But not only were they enacted, they were then extended. We as the Opposition probed the Government on their longer-term plans and ambitions but were supportive of the instrument. I feel that HMRC’s reasoning is beginning to wear thin, but it certainly has been an exceptional time for UK businesses.
My issue with this latest SI is not the Government’s decision to further extend this rather limited import declaration waiver but their complete lack of openness. Back in June, the Minister, the noble Lord, Lord Agnew, said very clearly:
“The Government do not plan to extend these waivers any further. Traders will need to comply with full safety and security declarations on exports from 1 October 2021 and on imports from 1 January 2022.”—[Official Report, 22/6/21; cols. GC 58-59.]
What went wrong? While we are now responding to the arrival of a new strain of Covid-19 with some modest measures, we have been free of curbs on business activity for several months. Although supply chain issues continue to bite, the Government have done what they can, or so we are told, to ease the pressures on business.
I appreciate that the Minister has not responded to previous debates on this topic but could he please provide a full, honest rationale for this new extension? Is it really related to the pandemic and wider supply chain issues, or is it actually about the readiness of new inland customs facilities or even the IT systems they rely on? Bearing in mind that the Government have been wrong on this before, does the Minister expect this to be the final extension, or is it possible that we will see the waiver run until September or December 2022?
Well, my Lords, I have taken part in many debates since I entered the House in 2010 but this one represents a record in that there is only one other Peer here for me to address. I am extremely pleased that that happens to be the noble Lord, Lord Tunnicliffe, whom I thank for his remarks, and I hope I can fully answer his questions.
The instrument proposes a further six-month extension to the waiver on safety and security declaration requirements that would otherwise apply to imports to Great Britain from the EU. In 2020, the UK imported £301 billion worth of goods, from mechanical parts to fresh produce, from the EU. This was 50% of all UK imports. Given the disruption caused by the pandemic, we are keen to ensure that traders have time to prepare for new customs requirements, which will protect UK supply chains and consumers.
After those opening remarks, I shall seek to answer—I hope in full—the questions and observations raised by the noble Lord. He quite rightly noted that, during previous debates, the Government said that we would not extend this waiver and that traders would have to comply with full safety and security declaration requirements on all exports from 1 October 2021 and on imports from 1 January 2022, as I mentioned in my opening speech. However, I assure the noble Lord that traders have been complying with full safety and security declaration requirements on all exports since 1 October 2021, when that waiver ended. A huge amount of work went into ensuring that businesses were ready for those requirements, and they have been operating successfully, without disruption, since October.
However, as I mentioned previously, the unprecedented impact from the pandemic has lasted longer than we could have imagined. While many businesses have taken steps to prepare for the requirements, many more are continuing to struggle with the economic impacts of this pandemic. Over the last six months, we have seen the knock-on effects of the pandemic on global supply chains, representing a further challenge to businesses, particularly smaller traders and hauliers. More recently, although this was after the Government’s initial announcement of the extension of this waiver for imports, we have seen further disruption due to the new omicron variant, as the noble Lord knows only too well.
These ongoing impacts have seen businesses operating in unprecedented circumstances, which is why the Government have taken the decision to further extend this waiver. This extension will support businesses and provide them some welcome relief. As the noble Lord knows, the Government have extended the delay only to the introduction of safety and security declarations; full customs declarations will be required from 1 January 2022. The Government have always taken a staged approach to new customs controls to avoid any cliff edges, and this extension will give businesses time to ensure they are ready for new customs requirements.
The Government are ready to implement safety and security requirements. I reassure the noble Lord that the S&S Great Britain IT system, which receives and risks these declarations, is up and running and being used by traders that import goods from the rest of the world. Inland border facilities are also already in use for Dover and Eurotunnel, and will be in place for Holyhead from 1 January.
To sum up, the Government are introducing this SI as part of our efforts to provide additional support to businesses and help them recover from the lasting impacts of the pandemic. This will also support them to manage the pressures on global supply chains that we are seeing around the world.