HMRC Impact Analysis: Customs

Greg Hands Excerpts

Tuesday 8th October 2019 Commons Chamber

[Jesse Norman]

As the House will know, a lot of mitigations have already been passed through statutory instruments, including instruments in relation to stream- lining customs import processes and procedures, special procedures for other areas, and deferment of import duty and VAT. Only yesterday, we passed a statutory instrument on safety and security declarations on our imports.

Mitigation very much depends on the shape of any deal. As the House will appreciate, the figures we are discussing today pertain to a worst-case scenario of a no-deal impact. There are many other areas in which the EU has already indicated that it is happy to give mitigations—for example, in relation to some of our haulage processes and people travelling by air into the European Union.

[Greg Hands (Chelsea and Fulham) (Con)]

In the debate around the UK-Ireland border, my hon. Friend will be aware of the confusion among commentators between customs checks and customs declarations. Of course, most customs transactions are not done at borders by a uniformed officer sitting in a customs office, but are essentially financial transactions akin to tax or VAT that are done at the point of production, shipment, transit or arrival. Does my hon. Friend agree that there is a role for HMRC in educating commentators about how modern customs practices work?

[Jesse Norman]

I pay tribute to my right hon. Friend for the work that he and the Secretary of State for Digital, Culture, Media and Sport have done on alternative arrangements. He raises a very important issue. As he says, Customs operates a risk-based assessment system of checks that is quite different from declarations. As for educating commentators, I absolutely agree with him and wish those commentators also included some Members of this House.

Oral Answers to Questions

Greg Hands Excerpts

Tuesday 21st May 2019 Commons Chamber

[Elizabeth Truss]

The hon. Gentleman will be well aware that the spending review is coming up. If there is a specific issue with London local authorities or other local authorities, I would expect that issue to be raised by the Local Government Secretary, and I encourage the hon. Gentleman to meet him to discuss the issue.

[Greg Hands (Chelsea and Fulham) (Con)]

One specific issue in relation to the London Borough of Hammersmith and Fulham is the reopening of Hammersmith bridge. It is about time that the council got on with repairing and reopening the bridge. The council has a very good financial settlement. Will the Chief Secretary join me in knocking heads together between the council and Sadiq Khan’s Transport for London to get the bridge open?

[Elizabeth Truss]

I welcome my right hon. Friend’s efforts to build bridges across London and to improve London’s infrastructure. The London mayoral elections are coming up, and I suggest that people vote for somebody who is going to make change happen much quicker.

Discrimination in Football

Greg Hands Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

I thank the hon. Gentleman for raising important points about the ability to report with confidence through the Kick It Out app and about the education piece, which is vital. We want our football clubs across the land to be welcoming, diverse and representative of the communities they serve. They should absolutely be tolerant places where people want to be, not places where they feel they have to speak out about behaviours that are not acceptable, whether in the pub or the wider community. We must work together as fellow sports fans and do our level best to ensure that football is welcoming at every level.

[Greg Hands (Chelsea and Fulham) (Con)]

May I commend the approach taken by the two premiership clubs in my constituency? Fulham has had a long tradition as a pioneer in combating racism in football. Obviously, Chelsea has had more trouble over the years, but the recent instance in December with Raheem Sterling, to which my hon. Friend the referred, led to tough action—led personally by the chairman of the club, Bruce Buck—against four supporters. Does she agree that clubs such as Chelsea need to keep up the pressure on these abhorrent fans and ensure that racism in football is stamped out entirely in the coming days?

[Mims Davies]

I thank my right hon. Friend for raising the good work done in the community. I have met with Fulham, been to its training ground and seen the work it does in the community, and have also met with Chelsea about particular issues. The pride in a football club and the badge can be used so positively, and we must harness that.

Oral Answers to Questions

Greg Hands Excerpts

Tuesday 9th April 2019 Commons Chamber

[Elizabeth Truss]

Let us be clear about the statistics. Over the past year, 90% of the increase in employment has come from full-time workers, and 97% has come from high-skilled jobs. We are building an economy fit for the future.

[Greg Hands (Chelsea and Fulham) (Con)]

9. Whether he plans to reform stamp duty land tax.

[The Financial Secretary to the Treasury (Mel Stride)]

The Government have made substantial progress in reforming the stamp duty regime. At autumn statement 2014, SDLT was cut for 98% of those people due to pay it.

[Greg Hands]

Since we last spoke about this, the spring statement showed a further decline in receipts of an additional £2.7 billion over the scorecard. That was not due to changes in Wales and the welcome first-time buyer reforms, which were already in the October Budget numbers. What are the Government going to do to reform the system, protect revenue, grow social mobility, allow the elderly to downsize and get Britain moving again?

[Mel Stride]

The year-on-year changes to the level of receipts from SDLT have reduced recently, but that is due largely to the fact that we have put a great deal of relief into first-time buyers’ relief, which is already helping 240,000 first-time buyers get on to the housing ladder.

--- Later in debate ---

[Mel Stride]

It is largely companies that fall due to the loan charge, rather than individuals—of the 6,000 cases currently being settled, 85% by value relate to companies. HMRC has always been clear that appropriate payment arrangements will be in place to ensure that those outstanding amounts of tax, which after all have been avoided, aggressively and in a contrived way, can be settled sensibly.

[Greg Hands (Chelsea and Fulham) (Con)]

What priority will the Chief Secretary to the Treasury give to reducing the tax burden in the coming spending review?

Spring Statement

Greg Hands Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

There will be many demands on the available funding at the spending review, and we intend to look at the public’s priorities in the round. Our challenge, as always, is to ensure that we direct funding in the way that most effectively delivers the end result that the public need. If I look at the knife crime debate that we have been having over the last couple of weeks, it is clear that it is not a simple question about putting more money into policing. [Interruption.] No, it is not. If the hon. Lady talks to police chiefs or school heads, they will tell her that it is a multifaceted challenge, and we need to address it as such. That is the point of having a cross-departmental spending review—we can look at our priorities in the round and decide how to allocate funding in a coherent way, to get the outcomes that the public want at the best value for money for the taxpayer.

[Greg Hands (Chelsea and Fulham) (Con)]

I warmly welcome the big improvements in the public finances, particularly those as a result of the last spending review in 2015, but the Chancellor has a problem with stamp duty. Today’s report says that the forecast has “deteriorated significantly” since October, when it was already £4 billion short. Receipts fell 9.8% in 2018, which is a new £2.7 billion shortfall in the scorecard. Transactions in my constituency are down 31% since the reforms. That is something he will need to look at and propose reforms for in due course, perhaps in November. Would he like to comment on the latest deteriorating numbers?

[Mr Hammond]

Yes. My right hon. Friend—perhaps unsurprisingly, given his constituency—is very interested in these issues, and I would be happy to meet him to go through the numbers. There are a number of moving parts underneath the headline number. Stamp duty in Wales has been devolved, which takes a significant chunk out of the total number. There is an overall slowdown in the market, which has an effect. We have also exempted first-time buyer purchases from stamp duty, which is a considerable chunk of the reduction he refers to, but I would be happy to talk him through the details.

Oral Answers to Questions

Greg Hands Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Hammond]

That is a matter for the Department of Health and Social Care, and I know that the Health Secretary is in discussion with the pharmaceutical industry. We are supporting the Department with allocations from the £3.5 billion I have allocated for Brexit preparations. We will ensure that adequate supplies of medicines are stockpiled if there is any risk of disruption at the channel ports.

[Greg Hands (Chelsea and Fulham) (Con)]

One way both to reduce the deficit and to deliver a reduction in tax rates would be to do something about stamp duty land tax. Office for Budget Responsibility forecasts show over the scorecard period a £4 billion reduction in stamp duty land tax receipts—down a staggering £800 million since the last forecast in March. Can the Chancellor give me an assurance that the Treasury is actively looking at this issue and designing a solution?

[Mr Hammond]

What I can do is assure my right hon. Friend that we look actively at all taxes at every fiscal event. He will know that stamp duty land tax has been a subject of some interest and, indeed, controversy. We do look very carefully at the receipts data, but we also have to look at the distributional impact of different taxes. As my right hon. Friend will understand, doing anything about high rates of stamp duty land tax would have a very uneven distributional impact.

EU Customs Union and Draft Withdrawal Agreement: Cost

Greg Hands Excerpts

Monday 22nd October 2018 Commons Chamber

[John Glen]

No, I cannot give the hon. Lady a cash figure for every member of the United Kingdom, but what I can say is that the Government and the Treasury are determined to make preparations for all eventualities. That is why we are preparing 70 statutory instruments to take through this House in the event of a no deal. The EU should be very clear that we are going to be ready for all eventualities while being committed to negotiating the best possible outcome, as directed by the British people two years ago.

[Greg Hands (Chelsea and Fulham) (Con)]

Of course, it is the policy of the party opposite for us to remain in the customs union forever. That is worth bearing in mind. Will my hon. Friend give a bit of detail on what work HMRC has done, in the case that we are in the customs union but outside the EU, on who determines things such as trade preferences and who runs trade defences on behalf of this country in those years?

[John Glen]

I can confirm to my right hon. Friend that these are matters with which the Government are engaged intensively in the negotiations at the moment. We are also working towards securing as much autonomy as possible for the British Government in the future. That is the mandate that we have been given by the British people.

Taxation (Cross-border Trade) Bill

Greg Hands Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Caroline Lucas]

I am afraid that I do not share the hon. Gentleman’s faith in our own Government continuing to keep higher standards. We have already heard clear criticisms of new clause 36 for many other reasons, including the way in which it drives a coach and horses through the kind of customs union that we want, so I will not be supporting new clause 36.

I was going on to give examples of ways in which food standards in the US are much lower than our own. Many may find the prospect of eating chlorine-washed chicken disturbing. Although there appears to be no clear scientific evidence that it poses a substantial risk to human health, it is linked to poor animal welfare on farms and at slaughter. Similarly, ractopamine is a feed additive used to promote growth in pigs, and its use is permitted in the United States, but prohibited in the EU. There is evidence that it has a detrimental impact on pig welfare, with the Humane Society of the United States stating that it

“causes death, lameness, stiffness, trembling and shortness of breath in farm animals”.

Concerns have been expressed about its impact on human health as well.

My amendment 71 would simply require the Treasury, when considering the rate of import duty that ought to apply to any goods, to have regard to the interests of UK producers, such as farmers and to the desirability of ensuring that UK standards of animal welfare, food safety and environmental protection are not undermined by imports produced to lower standards. I will wrap up my comments about it there.

I am supporting a number of other measures, including that on dealing with impact assessments, which are vital when we talk about impacts on the economic situation in this country and on the Northern Ireland border. However, I just thought that it was important to put something on record in this debate about the impact on animal welfare and environmental standards, too.

[Greg Hands (Chelsea and Fulham) (Con)]

Let me start by saying that I agree with my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) that the Bills we are considering today and tomorrow are vital pieces of legislation. I rise to speak against new clauses 1 and 12, which stand in the name of my right hon. Friend the Member for Broxtowe (Anna Soubry); new clause 6, which stands in the name of the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper); and new clause 11, which stands in the name of the Leader of the Opposition.

I speak as someone who voted remain in June 2016. However, having had time to study these matters at close hand, and having an objective, pragmatic and reasonable approach—I agree with my right hon. Friend the Member for Broxtowe that being objective and pragmatic is vital—I believe that it would be a grave error to enter into a customs union with the EU while being outside the EU. I shall give five reasons why I believe that to be the case.

--- Later in debate ---

[Mr Djanogly]

rose—

[Greg Hands]

I am going to carry on and explore this point. Because Turkey is not subject to that agreement, as it is not a member of the European Union, Turkey must negotiate its own trade agreement with counterparts. It is not obliged to do so, and various counterparts have agreed a trade agreement with the EU but not agreed one with Turkey.

[Mr Djanogly]

rose—

[Greg Hands]

No, I am not giving way as I am going to explore my points in the available time.

The lesson here is that these partners will be less likely, in many ways, to do a deal with such an economy, and ours is the fifth largest economy in the world. If they can get access to that economy through a trade agreement with the EU such that Britain would be forced to lower its tariffs, the people they might want to speak to are more likely to be in Brussels than in London.

My second reason relates to the pursuit of an independent trade policy and trade agreements. If we are no longer setting our own tariffs and they are set by somebody else, that weakens our ability to have a trade negotiation and to come to a trade agreement—by definition, we have a lot less to offer.

Remarkably, the third area—trade remedies—has not been explored at all tonight. I am amazed that the Labour party wants us to join—I am not sure what the official Front-Bench view is, but I think it is this—a customs union with the EU. Who would do our trade defences? Trade defences are incredibly important; they are the topic de jour in the current disputes between the United States, China and other counterparts. If we were in a customs union, it would be likely that Brussels would be making the decisions on trade remedies that would apply to the UK. We would not have a seat at that table when those decisions, which would affect our industry, were being made. Moreover, it would be likely to be against WTO rules for Brussels to make decisions that might affect the UK, because under WTO rules, people have to show the impact on their own market, not somebody else’s. So it is not at all clear to me—

[Mr Djanogly]

Will my right hon. Friend give way?

[Greg Hands]

I am going to use my three remaining minutes.

The fourth area—again, it is remarkable that Labour is ignoring this—is the potential regulation of the NHS and other public services. I think that Labour Members have forgotten the TTIP debates of four or five years ago. They got very agitated about TTIP and the prospect of granting access to the NHS and other key public services in this country via a EU trade agreement. Now they seem to be happy for the EU, through a customs union, to negotiate potential access to the NHS and our markets. Even worse, we would not have a seat at the table when that trade agreement was set up. I find it remarkable that the Labour party is prepared to do that.

My final point has also not been raised in this debate, but it is a vital aspect of the Bill: trade preferences for the developing world. Again, I think that there is cross-party support for this country doing more and better in this area. The Bill allows for the transition of the scheme of trade preferences, meaning that the UK will have its own scheme of trade preferences. It will transfer overnight the European Union GSP—generalised scheme of preferences—and GSP+ and include everything but arms. Crucially, there will be the ability to improve on that scheme. If we stay in a customs union with the European Union, we will strangle in its infancy that ability to do better than the European Union on trade preferences.

The Trade Ministers to whom I have spoken in the Governments of countries such as India, Pakistan and Bangladesh—they are all really important markets for this country and really important friends—would welcome the UK having the ability to offer better access for their goods than the European Union currently does. I am not saying that we will make a policy decision today, but it is extremely important that the Bill contains the ability for us to do that, and it is an underrated aspect of the legislation. Whatever we think of the access currently offered by the European Union, I do not think that anybody would say that the UK would be unable to offer better access if we had our own preference scheme under the Bill. That has been neglected in this debate.

Whatever we think of the original decision in June 2016, it would be a grave error to enter into a customs union with the European Union. It is not just a question of formalities and practicalities at the border; there many other really important issues, such as trade remedies and trade preferences with the developing world, that make entering a customs union with the European Union a very bad idea. I very much support the Bill and urge the House to reject the new clauses.

[Nic Dakin (Scunthorpe) (Lab)]

I apologise for the fact that I had to attend a Statutory Instrument Committee, but I was present at the beginning and I am here now. It is a pleasure to follow the right hon. Member for Chelsea and Fulham (Greg Hands), who brought us back to the detail of the Bill, which is where I wish to focus my remarks.

I was concerned that the proposed dumping methodology might not address the UK steel industry’s concerns, so I am pleased that the hon. Member for Stafford (Jeremy Lefroy) has tabled amendment 25. I am also pleased that the Government have engaged with Members from all parties and that last week, in response to a written parliamentary question from the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), they underlined their commitment to

“protecting UK industry where it is suffering injury as a result of dumped imports.”

The Government went on to say that they would not allow that to happen and would use mechanisms for the calculation of dumping methods that, on the face of it, seem to have the support of industries such as steel and ceramics. I very much welcome the fact that the Government have listened and have worked with key industries during the Bill’s progress through Parliament.

I am less convinced by the situation in relation to the economic interest test. I was rather hoping that, in line with the rhetoric that we heard throughout the whole argument for leaving the European Union, we would take advantage of the opportunity that leaving the European Union offered to reduce any bureaucratic pressure on industries such as steel, rather than adding to their bureaucratic pressures. The economic interest test in the Bill adds extra layers compared with what currently exists in the European Union, so we have the genius of a Government bringing forward something even more complex than what we already have in the European Union. I did not think that was the purpose of what we were doing; perhaps I was naive.

In Committee, we expressed concerns about the proliferation of economic interest tests that have been built into the regime and that measures must pass before tariffs can be introduced. Of particular concern was the fact that such tests will first be conducted by the independent Trade Remedies Authority and then again by the Secretary of State, theoretically on a completely different basis. As such, we have pushed for the Secretary of State’s power in relation to the tests to be curtailed and at most to act as a sense-check on what the TRA has conducted. Anything more than that will introduce an unacceptable level of potentially political interference into the process. It will be an unnecessary block on what is happening. The real worry is that it will delay the introduction of trade remedies and thereby potentially subject industry to more damage. However, the Government have tabled amendments 103 and 108, which go some way towards addressing the concerns I have just outlined.

Government amendments 110 to 112 and 116 to 118 seek to deal with the replication of tests, but they would not do that sufficiently well, so I shall support amendment 21, tabled in the name of the Leader of the Opposition, which would achieve a better outcome.

Finally, let me say a little about safeguard measures and adjustment plans. I am concerned that the Government intend to require any industry that requests safeguard measures to submit adjustment plans to demonstrate how it will adjust to new market circumstances, before any safeguard investigation can be launched. In essence, that would require an industry to demonstrate what changes it was making to its operations, including efficiencies and rationalisations, before a safeguard investigation could even start. UK Steel and others have pointed out that in situations such as those we currently face in relation to US section 232 tariffs, such a requirement would be unjustified. Industry should not have to make major adjustments to deal with what is likely to be a temporary situation introduced by the non-WTO-compliant actions of another Government. I am therefore pleased that the Government have tabled amendment 113 to modify the requirement, allowing the TRA to waive the requirement when it deems it necessary or suitable. It would, though, be better if that pressure on industry—at a point at which it is already under significant pressure—were not there.

I wanted to put those concerns on the record so that the Government have the opportunity to make further improvements to the Bill as it makes progress in the other place and before it comes back to this House.