May 28, 2018 / 11:17 PM / a year ago

Manufacturers slam UK Brexit customs idea as naive

LONDON (Reuters) - British manufacturers turned up the pressure on the government to abandon one of its post-Brexit customs proposals on Tuesday, slamming the idea of a technology-based plan for border checks as naive and a waste of money.

FILE PHOTO: Britain's Prime Minister Theresa May and Secretary of State for Business Greg Clark visit an engineering training facility in the West Midlands, Britain November 20, 2017. REUTERS/Andrew Yates/File Photo

Prime Minister Theresa May has ruled out Britain staying in a customs union with the EU bloc - to the dismay of many employers groups - and says her government is working on two possible solutions to minimize delays at Britain’s ports and airports.

But the EEF manufacturers’ body said it was unrealistic and naive to think a technological border solution, known as “max fac,” or maximum facilitation, could be implemented by the time a planned Brexit transition period ends in December 2020.

“It may have some long-term benefits, but suggesting max fac is a solution to our immediate problems is a non-starter,” EEF Chief Executive Stephen Phipson said in a statement.

Phipson said a max fac-style arrangement at the U.S.-Canada border had not eliminated the need for checks on most goods.

The customs conundrum - which will define commerce between Britain and its biggest trading partner for decades - is a test of May’s leadership as she tries to pacify rival factions in her Conservative Party and her cabinet.

She also needs to win agreement from Brussels where officials have dismissed both the options being considered.

The max fac option is favored by Eurosceptics in May’s party who want looser ties with the European Union after Britain leaves the bloc.

But last week Britain’s most senior tax official said such a customs arrangement could cost businesses up to 20 billion pounds ($27 billion) a year.

Under the other option, Britain would collect tariffs on imports from outside the bloc on the EU’s behalf.

A senior EU official last week dismissed as “fantasy” some of Britain’s main demands for Brexit, including on the Northern Ireland border. Chief negotiator Michel Barnier urged Britain to stop playing “hide and seek.”

May’s spokesman on Tuesday criticized what he called “sound bites and negative anonymous briefings” and called for a more constructive tone to the negotiations.

The EEF has previously urged the government to give businesses clarity on what Brexit will look and has warned of possible damage to complex cross-border supply chains.

Last week another major employers’ group, the Confederation of British Industry said remaining in a customs union was currently the only workable option for Britain. Finance minister Philip Hammond rejected that view.

(This version of the story refiles to fix typo in paragraph 8.)

Reporting by Alistair Smout and William James; Additional reporting by David Milliken; Editing by David Holmes and Richard Balmforth

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