Brexit latest - £2 billion plus 3,000 extra staff
This is the latest government announcement regarding Brexit funding. The spend will be spread across 25 government departments and is aimed to support planning for all eventualities, including ‘no deal’. Meanwhile, business is not happy. The ‘big five’ business groups have expressed their dismay at the growing prospect of a ‘no deal’. Read more …
Recently, the government declared a significant shot in the arm for Brexit preparations. Twenty-five government departments will be sharing the £2 billion. The major beneficiaries are –
HMRC has announced that it will be using its allocation to take on 3,000 new customer service and compliance employees. Their role will be to deal with the inevitable increase in customs activity, making sure that trade and revenue continue smoothly, without interruption. HMRC will also be investing in new border technology and IT.
HMRC is working hard to update its Customs Handling of Import and Export (CHIEF) system, including the installation of a new Customs Declaration Service (CDS). Jon Thompson, the CEO of HMRC, caused controversy last year as he warned a public accounts committee session that, in the event of a no-deal scenario, the department would need extra funding of up to £450m, plus up to 5000 new staff.
The extra £2 billion covers 2019-20 and is on top of the £1.5bn announced earlier in 2018.
Pressure on the government from the big five
Meanwhile, the government is under pressure from five major business organisations – the CBI, The Institute of Directors, the CBI, the EEF and The British Chambers of Commerce. They have jointly released a letter demanding that MPs act decisively to avoid a no-deal Brexit – a scenario that they judge would be disastrous for the UK economy.
The letter joint letter states – ‘Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that a business needs to move forward. The lack of progress in Westminster means that the risk of a no deal Brexit is rising.
‘Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money. Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay, into stockpiling goods or materials, diverting cross-border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.
‘While many companies are actively preparing for a no deal scenario, there are also hundreds of thousands who have yet to start – and cannot be expected to be ready in such a short space of time.’
The business groups warn that, with just 100 days to go, ‘the suggestion that no-deal can be “managed” is not a credible proposition’, without massive new customs costs and tariffs.
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