Weeknote #8: w/c 2023-10-09

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Hello again everyone! After a week off, it’s Simon back again with another tariff data standards weeknote.

This week, we attended the Data Standards Authority (DSA) Steering Board.

Attending the DSA Steering Board

After our Peer Review Group meeting last time, we moved on to presenting our work to the Steering Board. This is the group that will receive formal advice from the Open Standards Board about whether standardisation is recommended and will actually implement the decision.

In the room were a number of senior data experts representing Government departments, including some of the people we engaged with previously at HMRC. We presented the same material as last time with some updates to talk more about our progress to date.

The feedback was generally positive with some questions asked particularly about governance arrangements and relationship with the EU data standard which ours builds upon.

How we’re working with the European Union

A question was asked about how divergence from the EU’s own TARIC3 standard will practically work given the need to continue to implement customs arrangements in Northern Ireland. This is also a topic that was brought up in our recent stakeholder group and so is a really good question that is worth clarifying in detail.

Firstly, HMRC already implement border systems that operate both tariffs in Northern Ireland and their Online Tariff Service has been providing information on both tariffs for a number of years. The need to deliver these services has already solved the practical problems about how to marry up these two tariffs.

One part of the solution is for the UK Tariff Data Standard to maintain technical compatibility with the EU’s TARIC3, such that operators can consume both tariffs with the same technology. Our standard therefore doesn’t “diverge” from the EU’s standard – we have just applied an extra layer of strictness on top and clarified the meaning of the data where the UK’s context differs from the EU’s.

For example, the UK Tariff Data Standard retains the same data structures for modelling regulations as used by the EU, so any TARIC3-compatible system will be able to read UK data. However, we do not make use of the fields for recording the Official Journal number and page of the regulation as the UK doesn’t operate a journal in the same way as the EU. Instead, our standard provides links to legislation.gov.uk and records the S.I. number of implementing legislation. Consumers of the data can ignore the UK-specific semantics if it isn’t important for their use case.

The question is now about how this alignment will be maintained. Whilst it would be preferable for the UK and EU to evolve their standards together, the reality is that we have two independent trade regimes. There is some incentive for the UK and EU to make things as easy as possible for tariff consumers by ensuring complete alignment but realistically these are marginal compared to ease of having complete independent control over the data and representation. Working with others is harder and longer than working alone because of the added communication burden and the diversity of requirements, and so the benefits have to outweigh the costs. The fact we have already diverged suggests the incentives are not strong enough at present.

So it is likely that in some future moment the EU may choose to change TARIC3 and the UK will need to make a decision about if or when to integrate the changes. Today, this is a decision that each Department will need to make locally which has the potential to miss best outcome for the whole ecosystem. The goal of this standard is to at least make this a collective decision that the whole trade community can make together.

All this does not shut the door to drawing the UK and EU closer together on tariff data over time. It is highly possible that if we have a mature open standard with a big community of implementers then the benefits of working together more directly start to outweigh the costs, but we don’t get to that position over night. At the very least, starting with a precise and well governed standard is the first step on that path.

Future of the standard

A question was asked about who the governing body for the standard is and if that body is prepared to maintain the standard over the course of it’s life. A key maturity indicator of an open standard is how the standard would react to a change in its governing body – if a failure of the body would spell the end of the standard, that is normally a sign that it is not open enough.

Whilst government departments come and go, the functions those departments carry out tend to change at a much slower pace. The need for the standard came about through the need for Government to set its own trade policy which is a function that is likely to continue even if the unit that is responsible for it becomes part of another Department. Further, if this function stop existing, it would probably signal that the need for this standard had passed.

We originally proposed that the Department for Business and Trade (DBT) maintains the standard. This was primarily a pragmatic choice based on where the motivation and support for having an open standard is coming from. DBT also had the most incentive for stewarding a standard because it wants the legislation it sets to be used effectively and maximally, and maintaining this data standard contributes positively to that outcome.

We do need to carefully consider what would happen if a machinery of Government change resulted in DBT no longer existing in its current structure, and this is the main reason we were asked the question.

We now think that a better proposal might be that stewardship of the standard is always the responsibility of the unit that leads on enacting trade policy legislation. Today this is DBT, but if in the future this function moves to another Department, the responsibility and incentive for maintenance of the standard would move to that Department too.

If that Department no longer sees value in maintaining a standard, then it would be up to that Department to find a new home for it, potentially by establishing a separate body to take over governance.

Next time

We’ll see what the DSA Steering Board thinks of these ideas and if they have any more feedback. Tune in next time to hear about our preparations for launching a formal open standards challenge.