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Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020

Volume 807: debated on Thursday 19 November 2020

Motion to Approve

Moved by

That the draft Regulations laid before the House on 21 October be approved.

Relevant document: 32nd Report of the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

My Lords, we are here to talk about a statutory instrument that is part of the Government’s package to prepare for the end of the transition period. The instrument relates to safety and security declarations as well as the process for registering for an economic operators registration and identification number, or EORI number. The instrument supports businesses’ preparations for the end of the transition period and corrects a deficiency in retained EU law. Noble Lords will be aware that the Secondary Legislation Scrutiny Committee reported the regulations as an instrument of interest in its 32nd report, published on 29 October.

First, I shall set out the context of the amendment that we wish to introduce for managing the safety and security risk of goods entering and leaving the UK. The UK subscribes to the World Customs Organization’s SAFE framework of standards, which sets out minimum requirements for participating customs administrations to regulate, monitor and secure the international supply chain. Customs authorities are required to collect and risk assess data on every consignment of imported and exported goods. The UK does this through safety and security declarations, which goods carriers are required to submit. These declarations are currently implemented through the Union customs code and are retained in law in the UK after the end of the transition period by the European Union (Withdrawal) Act 2018.

While part of the EU, the UK required safety and security declarations only for goods leaving or entering the EU. From the end of the transition period, the default position is that carriers will be required to complete safety and security declarations for goods moved into and out of Great Britain where those goods are moving to or from the EU as well as the rest of the world. This SI deals with a temporary waiver for safety and security requirements for imports. The Government are introducing additional secondary legislation—laid this Monday, 16 November—to introduce contingency powers relating to safety and security requirements for exports, should they be needed.

In June, the Government announced the “staging-in” approach to controls at the border after the end of the transition period. As part of this approach, the Government are introducing this SI to waive safety and security entry summary declarations for six months on goods from the EU from 1 January 2021. The temporary waiver is necessary to address the adverse impact of Covid on businesses’ ability to prepare for new safety and security requirements. During the waiver period, there will be no requirement for entry summary declarations for goods imported into GB from territories where the UK does not currently require such declarations. Declarations will be required only from 1 July 2021. The waiver introduced by this instrument applies only to imports on which the UK does not currently receive declarations. Border Force will continue to undertake intelligence-led risk assessments of goods movements into this country from the EU, as it does now. Entry summary declarations will continue to be required for goods imported from the rest of the world. As a result, there is no increased security risk to the UK from this approach in the short term.

Secondly, the instrument amends a list of locations currently in the retained legislation that are granted shorter timing requirements for the submission of safety and security declarations for maritime movements. Safety and security declarations are required to be submitted within certain time limits before arrival or departure. These time limits vary by mode of transport.

Within the retained legislation, drafted with the geography of the EU in mind, there is a list of territories for which safety and security declarations can be submitted within a shorter time limit for movements by sea. This is to account for the practicalities of these shorter journeys, where the default time limits are unnecessarily onerous and challenging for carriers to meet. This list currently includes places such as Morocco, with very lengthy timings for journeys to Great Britain. Given the length of journeys from these places to Great Britain, there is no need for these movements to be offered the shorter time limits.

Conversely, this list currently does not include some of our closest neighbours and trading partners. For these journeys, which include channel crossings and goods moved to and from the Atlantic coast of Spain and Portugal, the default timing requirements are impractical for these well-established trade routes. This instrument updates the territory list in the retained legislation, removing territories that border the EU and no longer need the shorter timing requirement and adding to the list those territories that now require this consideration. This change will prevent industry being unnecessarily burdened for the shortest crossings and helps to update retained legislation to reflect our new status as an independent customs regime.

Thirdly, the instrument updates the governance of the economic operators registration identification in retained law. An EORI is a unique registration number given to businesses to interact with customs authorities, so that HMRC can identify them effectively. EORIs are necessary when applying for customs simplifications or facilitations, when making customs declarations or in any other interactions with the customs authority. All existing EORIs issued by the UK, known as UK EORIs, will continue to remain valid for use in Great Britain after 31 December 2020 and will continue to be prefixed with the letters “GB”. From 1 January 2021, individuals or businesses established in Great Britain or other territories outside the EU who want to trade with the EU and do not already have a UK EORI will need to obtain one. Persons that are not established in Great Britain but wish to lodge a declaration or request a customs decision in Great Britain will also require a UK EORI.

This instrument ensures that Great Britain has a functioning EORI system by replacing references and terminology in the retained EU law that will no longer apply to Great Britain. It will also maintain a registration requirement on those where such a requirement is set down in national law. This instrument does not impose any additional requirements to those already imposed under EU law.

The safety and security aspects of this instrument do not apply to movements of goods between Northern Ireland and Great Britain, or Northern Ireland and the rest of the world. Under the Northern Ireland protocol, goods moved between Northern Ireland and the EU will not be subject to safety and security requirements. Goods moved between Northern Ireland and the rest of the world will be subject to safety and security requirements. The EORI aspects of this instrument will not apply to traders in Northern Ireland, who will continue to register under the UCC.

By introducing a temporary entry summary declarations waiver and amending the declaration submission deadlines, this instrument strikes the right balance between giving traders time to prepare for new arrangements with the EU while still maintaining the safety and security of the UK. It also makes technical amendments to allow businesses that will require an EORI to continue to register as they currently do. I beg to move.

My Lords, I thank my noble friend for his clear explanation of these measures, which I support. I welcome the decision to suspend declarations for at least the first six months, from January to July 2021, to help business by reducing their administration burdens, particularly for roll-on roll-off freight. I understand that there is a proposal to phase in restrictions over the first six months in three stages. Can my noble friend help the House to understand how ready businesses are and whether they are aware of the different time limits that will apply as we move forward with our new system? I also welcome the leeway that is being given to businesses.

Perhaps I may ask my noble friend a few questions. First, how many new customs officers are expected to be required as we move forward with the new system? How many have we already in place, and are we looking to recruit further over the coming months?

On agriculture and agri-foods and the safety and security checks that may be associated with them, what controls or liaison might there be with other countries if issues need to be addressed in terms of the safety of imports?

Will the Minister expand a little on the impact of the Northern Ireland protocol on these measures? If, as is currently possible, there are requirements for traders between Northern Ireland and Great Britain to make customs declarations, what are the arrangements to prepare Northern Ireland businesses for this? What can my noble friend say to help the House understand the implications of the current perception that has been given to Northern Ireland businesses that such declarations are not needed? I recognise that nothing will be required for the first six months, so clearly there is time, but what are the Government’s plans in that regard?

Overall, I welcome the leeway being given and the phasing in of the measures that would be required for entry and export summary declarations. Clearly, there will be, as the Secondary Legislation Scrutiny Committee outlined, some significant one-off costs initially and additional administrative burdens at some point, but I believe that my noble friend has indicated that the Government do not expect that to be too onerous. Can he give some clarification of what is expected and how this has been received by different sectors? If he does not have that information now, perhaps he can write to me. Overall, I welcome these regulations.

My Lords, I am delighted to support these regulations. Like my noble friend Lady Altmann, I have a couple of questions. In particular, mindful of the fact that the waiver is coming into effect at quite a late stage in the day, and in response to questions from the Secondary Legislation Scrutiny Committee in preparing its report on the regulations before us today, HMRC replied:

“The NI Protocol requires HMG to implement the Union Customs Code in NI. As a result of this, some movements between GB and NI will attract a Safety & Security requirement, but the full extent of this is the subject of ongoing negotiations between the UK and the EU. Traders will be able to access help from the new Trader Support Service in NI to support them meeting their requirements.”

I want to ask in particular when the Trader Support Service will be up and running. Reference has been made twice in proceedings today to how businesses in Northern Ireland can rely on the Trader Support Service. We on the EU Environment Sub-Committee took evidence on the importance of unfettered movement between Northern Ireland and Great Britain under the Northern Ireland protocol, and it is essential that businesses have the best guidance and support that they can get. I therefore hope that my noble friend Lord Agnew will be able to explain to us today what state the Trader Support Service will be in to give them the best possible advice.

Mindful of the fact that the negotiations are still ongoing, I am rather amused by the adverts that the Government have put out. I know they are meant to be helpful and I think they will be in the long run, but they are inviting businesses to log on to a website to prepare for the new arrangements, and it is incredibly frustrating for them because they do not yet know what those arrangements will be. What is the lead time between the negotiations ending and knowing what the new arrangements will be? It was a source of some disappointment to us on the EU Environment Sub-Committee that, until quite recently, there had been no formal discussions between the Northern Ireland Assembly, businesses, the Westminster Parliament, and, I presume, HMRC. Can the Minister confirm today that that is no longer the case?

Like my noble friend Baroness Altmann, I note that there will be additional burdens and one-off costs. However, paragraph 7 of the Secondary Legislation Scrutiny Committee report states that

“it will be a new legal obligation and an additional cost to submitting a customs declaration for import and export purposes”—

and that was the response from HMRC to inquiries from that committee. I understood that there are not meant to be any significant checks so I am slightly surprised to learn that there will be a new legal obligation leading to the additional costs and burdens of completing a customs declaration. Does the Minister have any idea how long it would take to fill in such a customs declaration?

I hark back to the days when I was first elected as a Member of the European Parliament in 1989. For the first three years, we were not in the single market, so for import and export all businesses had to complete about 20 pages or more of customs declarations. As the local MEP, on occasion I was phoned up and asked to intervene—through the good offices of government departments—to make sure that these customs declarations could be completed and dispatched to enable the goods to move. Agri-foods are perishable goods, and it could ruin a whole load if there was a delay of longer than the—I think—four hours pre-arrival for one form of declaration and two hours pre-arrival for both. If these time limits were to be exceeded, it could pose serious problems for the transporters and the logistics for these perishable goods.

I am interested to learn how my noble friend will respond to these few remarks in connection with the regulation he has presented today.

My Lords, I thank the Minister for presenting these regulations in such a straightforward manner. In principle, I welcome them. A six-month delay in imposing new and costly obligations on business at this time is clearly a sensible step. I hope that it will help delay Kent turning from the garden of England into the toilet of England, as some fear it will be, as lorries queue up outside the ports. Does the Minister expect those delays to be imminent on the other side of the channel because these agreements are not reciprocal but are being waived only by the UK? We cannot expect the EU to reciprocate.

It seems utterly mad to propose imposing new burdens on our businesses at this stage. It is welcome that HMRC is prepared to spell out that these regulations will be costly and troublesome to business when they come into practice. Already our country has lost a fortune because of Covid. The automobile industry alone reckons that Covid has cost it £27.5 billion so far in lost sales and production. There is no doubt that Brexit will add to those costs when we finally come to the end of the transition period.

Therefore, rather than waiving these regulations for six months, will the Minister consider extending the transition period across the board? That would be a sensible move for the UK and the EU. It might allow time to rethink the way in which businesses are classified. I understand the need for traders to have a registration and identification number but, despite the imminence of our final departure from the EU, many still have not secured one.

Perhaps they struggle with the requirement first to classify their operations in line with the Government’s official classifications. There are numerous, different and, in some cases, somewhat obscure categories. Manufacturing of consumer electronics is a sensibly broad and easy to understand category but do we really need businesses to shoehorn themselves into such narrow classifications as “producing oleaginous fruits” or “manufacturing of knitted or crocheted hosiery”? Those categories seem unnecessarily narrow. Will the Minister undertake to consider simplifying classifications to help those applying for EORIs?

My Lords, I particularly welcome this SI, which is almost certainly one of the most important instruments for our country as Brexit looms. It comes in the time and climate of lockdown, which is extremely difficult for anybody doing business. Perhaps I may highlight what my noble friend Lady McIntosh said about Northern Ireland. I was a junior Minister there in 1979 for a couple of years. I will not repeat her questions because they are absolutely crucial and do not need repeating.

Given our debate on the Internal Market Bill about affirmative resolutions, I am pleased that there is an affirmative resolution in this key area. Paragraph 2.1 of the Explanatory Memorandum clearly explains the purpose and paragraph 2.4 explains that the Union customs code requires pre-arrival and pre-departure collection and the risk assessment of data on goods by customs authorities.

I come to this debate from the point of view of having been the Member of Parliament for Northampton South; there is a large number of hauliers in Northampton because it is a transport hub. They are not happy folk at the moment but they are experienced hauliers. They and I realise that there is to be a temporary waiver for ENS declarations until 30 June, which, it is stated, will particularly help those hauliers who transport goods only in the EU. Is there an estimate of how many hauliers are in that category? It seems likely that they represent the vast majority. Nevertheless, the procedure offered in the six-month waiver is substantial and welcome.

Picking up on what my noble friend Lady Wheatcroft said, I wonder whether it would be wise to do a review after at least three months. Six months will go by very quickly in what will still be difficult period for our country. Can the Minister reflect on that? These poor hauliers will move from a system of 24 hours for the preloading of containers and four hours pre-arrival to just two hours. Is this workable? Has it been tested yet? I imagine the Minister will know the answer to that. If it has not been tested, when will it be? All too often we have seen across many areas of public sector operations that the IT is not robust enough to handle challenges. Has the IT been rigorously tested? Is it robust enough to cope with a huge number of hauliers registering on the two-hour basis for both short-term material and containers? I can see a situation in which the system crashes from too many people trying to log on at the same time. This is absolutely vital.

Consultation is so important. Paragraph 10.1 of the Explanatory Memorandum refers to HMRC sponsoring the Joint Customs Consultative Committee. That is good, but how many times has it actually met? Were hauliers always represented and what came of its recent meetings? Does contact now rest only with the “virtual reading room” referred to in that paragraph?

I have talked to some of my former constituents in Northampton. They remain deeply concerned. It is not just the Northern Ireland dimension; no one knows whether there is going to be a deal. I am not accusing the Minister of being responsible for that, but they are different scenarios. Against that background, we are asking an important part of our trade, industry and welfare somehow to operate almost instantly, albeit we have this six-month waiver. As the Secondary Legislation Scrutiny Committee states in paragraph 8 of its 32nd report,

“HMRC expects significant one-off costs”.

Is the Minister in a position to indicate the scale of those costs and what they are likely to be? Are they software or staff costs, for example?

I can see that my noble friend the Minister faces a huge challenge. I thank him for what he has done so far and what he will need to do in the weeks ahead. Against the background of what my two colleagues and I have raised, I look forward to his response with great interest.

My Lords, my colleagues and I do not object to this SI. Given how little prepared this country is to cope with imports from the EU into the UK, the six-month delay in requiring ENS declarations is inevitable. How likely are the Government to hit the July target and the staging posts in between? On the continent, all countries’ customs organisations have completed their preparations, and they too have experienced Covid.

To what extent does the Government’s expectation that SNS declarations will not apply to goods transported from the GB to Northern Ireland rely on breaking international law? It would be helpful to understand.

I would also like the Minister to help me understand some rather more granular issues, in particular the impact of post-transition customs barriers on the flexibility or loss of flexibility for hauliers in determining their route when crossing the Channel. I particularly have in mind the accompanied roll-on, roll-off traffic which handles most of the perishable and critical just-in-time cargo. For example, car factories in the UK order parts in the morning from EU suppliers that are to be put into the production line in the UK that afternoon and vice versa. The Explanatory Memorandum accepts that it is the norm for drivers on the Continent to decide whether they will use the Calais-Dover ferry or Eurotunnel only as they approach the entrance at Coquelles or Calais. Does the requirement for declarations to be filed even just two hours pre arrival allow flexibility for such decision-making and a change of route to continue in the same way as now? It has been very important in managing issues around congestion through industrial action or, indeed, a change in destination delivery.

Reading the Government website for ro-ro traffic from the UK to the EU, I cannot work out how much flexibility will exist in that direction. Again, drivers decide between the Dover-Calais ferry or Eurotunnel only after leaving the M20. I can see from the website that the process of getting export clearance has multiple steps in which the exporter files details, including the vehicle registration number, often known only at loading, along with customs duty tariffs and presumably rules of origin, also often known only at loading. HMRC then notifies the exporter if more documentation is required or gives permission to progress to port. How flexible is this side of the regime? What happens if the haulier wishes to combine loads at the last minute? Is the entry paperwork different going into France, Belgium and Holland? I believe that it is. Also, have the EU states had time to adapt to the new UK systems? Given that some of them are still a work in progress, it seems quite tough to expect someone else to integrate with systems we have not completed.

Large companies have the resources to cope with these changes, expensive though they are, but the Minister will be aware that 150,000 exporters to the EU have never experienced a customs regime and many of them have been unable to prepare for the change, especially as they are dealing with Covid and because they do not know exactly what the systems are. The NAO notes that the Government’s latest reasonable worst-case planning assumption of September 2020 is that 40% to 70% of laden lorries may not be ready for border controls. It has also made clear that the customs intermediary market, which most small exporters rely on and will have to use, is inadequate, despite some recent investment by the Government.

Many of the Government’s new IT systems, while welcome, are either unfinished or are still being tested, leaving businesses with only a tiny window to understand what is needed to adapt to them and then to implement the adaptation. Will the Minister update us on the readiness status of NCTS, which is the new computerised transit system, GBS&S, the safety and security system, and GVMS—the Goods Vehicle Movement Service. Where are we on the migration from CHIEF, Customs Handling of Import and Export Freight, which at least is understood, to the Customs Declaration Service, which appears to be a major headache? Indeed, why has the CDS not been delayed, given the trouble it is causing? Further, while some ports are prepared, others are not. Can he comment on BBC reports that Felixstowe is already in chaos with unacceptable delays because of pre-Brexit stockpiling and Covid?

Lastly, I ask the Minister about the Economic Operator Identification and Registration System. As the amendments in this SI make clear, this scheme is a nightmare, and the SI appears to admit to another layer of complication. The Government have been frequently asked to devise and negotiate a proportionate version for small exporters. In the Explanatory Memorandum, the Government proudly declare that no specific action is proposed to minimise regulatory burdens on small businesses. Why have they chosen not to do this?

My Lords, I am grateful to the Minister for introducing this statutory instrument and to other noble Lords for their contributions to this debate. I also express my thanks to the Secondary Legislation Scrutiny Committee for its important comments on this instrument.

The importance of getting customs processes right cannot be overstated. As we all know, we have left the EU and will soon leave the 12-month transition period. It is still possible that there will be a deal that facilitates trade in goods, but we cannot know whether the noble Lord, Lord Frost, and his team will succeed. Had the Government chosen to pursue a different course during the Brexit process, it is possible that we could have avoided the need for a new customs regime to be designed and implemented in record time. However, we are where we are, and it is in everyone’s interests—those of businesses and consumers alike—that Ministers get this right.

This instrument introduces a temporary waiver on the entry summary declarations. It also amends requirements in relation to the registration of businesses to ensure there is no major change to the UK’s powers at the end of the transition period. On this matter, the measures before us supersede a previous set of regulations. In relation to the first change, the Government present this policy as a favour to businesses, allowing them more time to prepare for our movement to new procedures, particularly in the light of the Covid-19 pandemic. While businesses will undoubtedly welcome the degree of flexibility, I hope the Minister will forgive me for being sceptical about his justification.

The Government set out the bulk of their customs policy proposals earlier this year, promising an array of new IT systems and the recruitment of 50,000 new officials by the end of the year. In recent months, we have seen a number of media reports, supplemented by National Audit Office analysis, suggesting that things were not progressing as hoped. On the IT side, could the Minister give us an estimate, in percentage terms, of our readiness? Is there any link between the ENS postponement and the Government’s ability to process the data? On recruitment, the Government have repeatedly refused Labour’s requests for information on numbers. Can the Minister confirm today how many of the 50,000 have now been recruited? Of this number, how many have received the necessary training to operate on the ground from January? I am happy for the noble Lord to write if he does not have the information to hand.

The changes to the timing of entry and exit declarations appear, at face value, a sensible step. Over the past four years, the road haulage industry has voiced concerns that the Government have not fully got to grips with the challenge hauliers will face beyond the transition period. I appreciate that Ministers have engaged with industry, but there have sometimes been concerns that such engagement has been half-hearted. With many ports already facing capacity issues, coupled with the well-documented steps being taken in Kent, we need to take any and all steps that will keep vehicles moving and ferries departing on time. I understand the justification for the two-hour deadline but would like to ask the Minister whether this will be kept under review and, if any changes are required, how they will be delivered.

I turn now to the Secondary Legislation Scrutiny Committee’s exchange with the department on the lack of impact assessment alongside these regulations. HMRC may be correct that this measure does not require an impact assessment due to its short-term nature. However, the Minister and I have had several exchanges on the quality of Explanatory Memoranda in recent months. Does he accept that, even if a formal assessment was not deemed necessary, the inclusion of relevant facts and figures, including the likely costs to businesses within and after the ENS waiver, was desirable? If he does, will he feed that back to his officials?

Finally, I will make a brief point that goes slightly beyond this instrument. The SI does what it can on the matter of imports but excludes exports for obvious reasons. While I appreciate that the Minister cannot control the protocols put in place by others, I hope he can provide some reassurance that this other, rather large piece of the trade jig-saw is being dealt with through the relevant channels.

My Lords, I thank the House for this debate. I will seek to address the questions that have been asked. If I do not give enough detail, I ask noble Lords to feel free to write to me because this is an extremely complicated area and I certainly do not pretend to be across every detail.

I shall start with my noble friend Lady Altmann, who asked about the number of stages of requirements. There are simply two stages, one from 1 January and one from 1 July. It may be that my noble friend has something else in mind, so if she wants to seek clarification, I ask her to write to me. HMRC is standing up approximately 7,000 new customs officers for this process, around 6,000 of whom are already in place. The bulk of the others are either in training or under offer, so I am reasonably confident that we will have enough. I get a weekly report on that information.

A number of noble Lords asked about the Northern Ireland protocol. It is a very complicated international agreement, made more so by the fact that we do not have everything nailed down yet. I share the frustration of many noble Lords who wish to see certainty. However, the Trader Support Service has been established to support traders in Northern Ireland and has already started sending out bulletins to traders in Northern Ireland who have registered. As of last week, 2,800 Northern Ireland businesses had registered and at least 2,000 GB businesses are looking to trade with Northern Ireland. That figure is changing daily and going up quite quickly. They will link into the computer system that will operate in Northern Ireland, the Customs Declaration Service, which will operate only in Northern Ireland initially because it is capable of managing a dual-tariff system. I will talk more about systems later on.

My noble friend Lady Wheatcroft asked about delays on the other side of the channel. She is right that it is not something we can have a great deal of control of, but we are engaging substantially with all the EU countries that trade with us and we see from surveys that awareness is going up weekly. However, this is of course made more complicated by Covid.

The noble Baroness asked why we could not provide longer-term waivers in this SI. The practical limit is that under the international customs rules one cannot make these things permanent, but we believe that the six-month delay will give businesses a chance to adjust. The noble Baroness also asked about the number of businesses that have registered for an EORI number: it is a bit over 260,000 and they are still coming in.

The noble Baroness expressed concern about complexity. It is absolutely our intention and aspiration to operate the most efficient border in the world by 2025, as we have stated. We are not able to do that straightaway, and I fully accept that there will be complexity and arcane rules that we would like to remove now but cannot necessarily remove in the next few weeks or months. However, we are absolutely committed to improving the system.

My noble friend Lady McIntosh also asked about the Trader Support Service. I assure her that it is standing up at a rapid rate. It is led by Fujitsu, a large computer company that has been working with HMRC on other systems for a number of years. One of its consortium members is the software company Descartes, which is going to link to CDS. I am in very regular contact with the HMRC teams on the implementation of that work.

Businesses have been able to sign up since 28 September and, as I mentioned, those that sign up now receive bulletins. However, we are concerned that not enough Northern Irish traders have registered. We continue to communicate as assertively as we can with trade bodies and hauliers in Northern Ireland. The noble Baroness asked about one-off costs. We expect that importers will face some increase in costs as a result of the declaration requirements, but they are very variable. We do not know how importers will choose to manage the declaration, which is often just one part of a wider customs process. Because of this uncertainty, the estimate on the admin burden is not currently available. As noble Lords will know, the negotiations with the EU on an FTA are ongoing. That is why we cannot be crystal clear for traders. As I have said, it is frustrating, but I have personally pushed HMRC to get out all the decisions that it can as quickly as possible, to remove the uncertainty that traders face.

My noble friend Lord Naseby asks whether trade associations and hauliers were consulted on the changes to the timing of the notification of the ENSs. It is worth clarifying that this change was requested by stakeholders. It gives flexibility to hauliers and carriers to pick the route nearer to the time of departure. They do not have to submit the information on that timescale; they can put it in earlier if they know what route they are taking. We consulted with 40 trade associations and business representatives on this, and that is why we have made these changes. My noble friend also asked about communication with hauliers, referring to his old constituency. We have created 40 advice and information pop-up sites across GB. In the last week or two, 7,000 hauliers have visited them, as they collect information and increase their level of familiarisation.

Many noble Lords asked about IT readiness. There are a lot of systems, so I will not go through each one in detail. The main one, CHIEF, the existing system, is tried and tested, and has been upgraded to take the higher volume of transactions. Regarding congestion, particularly around the short straits, we have created a facility, “Check an HGV”, which will enable hauliers to answer a simple questionnaire before they go into Kent, to ensure that their paperwork is in order. That has been in beta testing with a number of hauliers over the last few weeks. Noble Lords have mentioned costs. We have provided support of £80 million to the intermediaries sector—customs intermediaries, freight co-ordinators and so on—to uprate their businesses. That money is still going out. Not all of it has been claimed by grants, and this week we widened the criteria to give more flexibility. Noble Lords will also be aware of the port infrastructure fund which closed on 31 October, and which again was well received by the port sector. It will probably be oversubscribed, but it will provide substantial capital to enhance the sector’s facilities.

The noble Baroness, Lady Kramer, asked a number of questions, some of which I hope I have answered. She asked particularly about small business support. We have made efforts to support the small business sector. HMRC has introduced a number of support mechanisms around such things as duty handling, where we have provided an accelerated system for the deferral of duty. That process is under way, but I absolutely accept that this is going to be a period of change and a lot of learning for all parts of the sector.

The noble Lord, Lord Tunnicliffe, asked thoughtful questions, as normal. He asked whether this is a response to Covid or a matter of lack of readiness on the part of the Government. We have listened very carefully to carriers, who have been emphatic that the challenges raised by Covid have required that we make this particular easement. Businesses specialising in cross-border trade have been significantly impacted by the pandemic. This disruption has prevented them preparing the introduction of customs controls at the end of the transition period, and it is really in response to those challenges that we announced the staging in. The introduction of a temporary waiver for entry summary declarations was a necessary measure to address the adverse impact of Covid while balancing the safety and security needs of the country.

The noble Lord asked about the employment of 50,000 customs agents. There may be a misunderstanding of terminology on my part, but I think the number he refers to relates to the customs intermediaries industry, not to civil servants, Border Force or suchlike. That figure was a bit of a finger in the air, to be honest: one simply extrapolated the number of customs forms from the volume increase. The reality is that the grants we have given to the sector—a moment ago I mentioned around £80 million—have been available to increase capacity, not just through hiring more people but covering IT training and innovation, basically. Our intelligence suggests that the sector is ready for the big increase in transaction numbers from January. As I mentioned a moment ago, we have just widened the criteria of the grants facility to give a wider range of eligibility.

The sector is varied, as I mentioned. It includes customs brokers, freight forwarders and fast-parcel operators, and the increase in capacity goes beyond simple increases in the numbers of staff. The Government continue to work closely with industry stakeholders to ensure that they have the capacity required. We will continue carefully to monitor preparations, bearing in mind that there will be a big jump in January and then another jump in July. Therefore, we will keep a careful eye on capacity.

The noble Lord asked about the timing requirements. I hope I dealt with that in an earlier answer, but there is a basic requirement, because Border Force needs time to collect and risk-assess data, with the practical considerations about what information the industry is able to provide and when without being overly burdensome. Of course, this varies by mode of transport, and the shorter timing requirement that this SI extends to the territories list reflects the reality for short sea movements, such as those from Calais to Dover. The change offers a more practical requirement for the submission of these declarations for businesses involved in maritime trade on historic, busy and significant trading routes. We will continue to assess feedback from the industry on how the customs system works for them and keep the requirements under review.

The noble Lord asked about the cost of the impact of the S&S requirements. As I mentioned earlier, we expect there to be some additional costs, but we have not been able to quantify them.

The noble Lord asked whether we can reassure the House that trade requirements are being considered more widely beyond the question of imports. My noble friend Lord Naseby asked a similar question. We continue to work closely with industry to ensure that it is engaging with the new requirements and can take the necessary steps to prepare. We are using a public information campaign. I accept that for some people that might sound irritating but, to a certain extent, it needs to be irritating for people to take notice of it. My right honourable friend the Chancellor of the Duchy of Lancaster is having regular Zoom conferences with stakeholders to hear their issues at first hand, as indeed, am I. I hope that addresses the questions. I think I will be back here again on future SIs and I am sure will be subjected to ongoing scrutiny. If noble Lords want to write to me on any particular issues, they should feel free to do so.

To sum up, the Government are introducing this SI as an important part of the process of updating retained legislation to support our status as an independent customs regime. By providing extra time for businesses affected by Covid to prepare to meet their safety and security requirements, we are listening to businesses and supporting them at this challenging time.

Motion agreed.

House adjourned at 6.25 pm.