European Single Market (Hansard, 3 June 1992)

§ Sir Patrick McNair-Wilson
To ask the Chancellor of the Exchequer whether the method of calculating and presenting Britain's balance of payments figures will be altered after the establishment of the European single market in January 1993.

§ Mr. Nelson
Yes. The changes stem from the abolition of most Customs controls on intra-Community trade. Customs declarations, the current source of the statistics of visible trade, will no longer be available. Instead, a new system of monthly returns, linked to VAT returns, has been devised. Known as Intrastat, it is governed by Council regulation (EEC) No. 3330/91 of 7 November 1991. Further details have been deposited in the House of Commons Library.
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The presentation of the monthly visible trade statistics will be affected. There will be a transitional period before the new system becomes fully established, affecting all member states to a greater or lesser extent depending on the speed and accuracy with which traders supply data. In United Kingdom, complete visible trade figures and, hence, the current account balance for the early months of 1993 are unlikely to be published before the middle of the year, although extra-EC trade statistics will continue to be made available in line with the current timetable. Announcements on the timing and format of the publications will be made nearer the time.

§ Sir Patrick McNair-Wilson
To ask the Chancellor of the Exchequer what changes he expects in the role and duties of Her Majesty's Customs and Excise after the establishment of a European single market in January 1993.

§ Sir John Cope
With the creation of the single market, fiscal frontiers between member states will disappear. As from 1 January 1993, there will be no routine or systematic customs formalities and goods will move freely across internal EC frontiers. The collection of VAT, excise duty and statistics on intra-EC trade at the frontier will be replaced by arrangements based on the provision of periodic returns by companies controlled at their own premises and linked to the domestic VAT and excise systems. As a result there will be a major shift of resource and effort from frontier to inland locations.
There will be no restrictions on tax and duty-paid goods purchased for personal use in the single market. The use of the red and green channels will also cease. Although duty-free allowances will continue for the time being, control will be exercised on the vendor rather than passengers at the point of entry into the United Kingdom.
Customs currently operate a wide range of controls at the frontier which are carried out on behalf of other Government Departments, for example health checks on intra-EC traffic in animals and plants. The single market will mean that routine regulatory controls of this kind at internal EC borders will cease. The restrictions that remain will be controlled inland, with any documentary checks divorced from the physical movement of the goods.
However, anti-smuggling spot checks will continue particularly to combat illicit drug trafficking in respect of traffic from inside as well as outside the EC after 1 January 1993. Customs are creating a more flexible, mobile, better targeted and highly selective system of checks for this purpose, operating on the basis of risk assessment, intelligence and profiling which will result in far less obtrusive controls. Customs activity at the frontier will continue to form part of a national integrated law enforcement effort against illicit goods.