HMRC admits double-counting in its £20bn customs warning

BY Iain Martin | iainmartin1   /  8 June 2018

There is a lot going on for media outlets to report on Brexit. This week has been a veritable festival of shambolic chicanery. More of that in my weekly newsletter this weekend for Reaction subscribers if I ever make it off this Grayling Express, named in honour of the “Transport” Secretary. In a previous era Chris Grayling would have been transported forcibly to the colonies.

Truly, if Brexit doesn’t do for the the Tories, trains and rising crime, moped mayhem in London for example, will do the trick.

Anyway, it is understandable that on Brexit some stories get more attention than others. Big or bad numbers are more interesting than small or manageable numbers.

Even so, it is surprising that there are not more repercussions when a key number that dominated the news turns out to be bogus or a mistake.

When the head of HMRC said recently to a Commons committee that the bill to British business for customs (forms etc) would post-Brexit be up to £20bn a year, it was a huge story. The FT gave it big licks, for example. When the number appeared it was a stunning moment. It appeared, I thought so, to all but kill the Max Fac customs option favoured by the Brexiteers and disliked by Number 10.‎

Now, it turns out that the number was wrong and surprisingly little attention has been paid.

‎This week, Jon Thomson of HMRC clarified the sums.

The Tory MP Simon Clarke published a clear account of the ‎methodology on Brexit Central this week.

Clarke writes:

“The £20 billion figure includes the estimated cost of customs declarations for both UK businesses and EU businesses. This, apparently, was not made clear at the original evidence session as many media outlets implied – or at least failed to make clear – that this figure was not an accurate account of the cost solely to UK businesses. Indeed, once we discount the cost to EU businesses (something which is a problem for the EU, not us) then a whopping £6.5 billion is immediately struck off the total figure.”


‎Now it is clear one large number was miles out, might we ask if the other numbers cited by HMRC and anti-Brexit forces are reliable? Indeed, is the estimate there out by as much as £18bn, as the highly-respected economist Graham Gudgin put it last week?

That £20bn figure helped drive the debate. It shocked business, analysts and politicians. It was wrong. By more than £350m a week…‎