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The peril of the chocolate orange

by Quentin Peel | 14.07.2017

Sir Amyas Morse, Comptroller and Auditor General of the National Audit Office, has never been known as a headline snatcher. But this week the silver-haired, softly-spoken accountant coined an expression that is likely to haunt the Brexiters in the British government throughout the coming years: he warned against the peril of the chocolate orange.

Sir Amyas was referring to the danger of the mighty UK civil service falling apart in squabbling between its constituent departments under the pressure of exiting the EU, without a stronger lead from the centre.

“There has to be strong integration [between departments on implementing Brexit],” he told a media briefing. “I am not seeing evidence of that… What we don’t want to find is that at the first tap [departmental government] falls apart like a chocolate orange.”

The existence of fierce inter-departmental rivalry has been apparent to any observer of the confused and secretive Brexit process over the past 12 months. Under Theresa May, the Treasury and the Foreign Office, the two mighty departments of state that best understand the EU, have been relegated to a back seat in negotiations led by her Home Office acolytes in Downing Street and the Department for Exiting the EU. Relations have veered between icy, poisonous and paranoid.

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Sir Amyas was far too diplomatic to go into any such sordid detail. His primary concern was more focussed and more practical, and yet potentially just as devastating. He had summoned the media to an unprecedented press briefing at the NAO, to publish his organisation’s latest report on the implementation of a comprehensive new customs clearance system. His concern is that it will be introduced on the very eve of Brexit, and precipitate bureaucratic chaos just as the UK leaves the EU.

Her Majesty’s Revenue and Customs estimates that leaving the EU customs union will mean an additional 200m transactions a year requiring customs clearance from March 2019. At the present, just 55m transactions do. Some 180,000 traders are expected to have to make declarations for the first time, compared with just 141,000 traders currently filing declarations at all.

Yet in January 2019, just two months before this vast administrative exercise caused by Brexit is due to begin, HMRC will be launching a whole new digital customs clearance system. The NAO – answerable to parliament, not the government – is clearly alarmed at the dangers of chaos, confusion and delay. If the new system were not ready and tested, Sir Amyas said, and the old manual procedures had to be continued, it would be a “horror show”.

Now the NAO is not supposed to make any comment on policy. It just tests the system to see if it lives up to the government’s stated intentions. So Sir Amyas would not comment on the need for an extended transition period under the old EU rules. But he did point out that we still don’t know what customs system is going to prevail – so HMRC cannot prepare for it.

HMRC insists it can cope – although Sir Amyas did suggest that more resources would almost certainly be needed. And that’s when he came to comment on the danger of an even greater horror show, because of the lack of “joined-up government” in dealing with the greatest challenge to the government’s capability in peacetime.

His quietly stated, practical fears have been predictably dismissed in Downing Street. But his warning about the danger of a chocolate orange outcome in the Civil Service – suggesting a UK bureaucracy that is almost as confused and divided as May’s government – seems certain to linger on.

Edited by Sam Ashworth-Hayes