Finance (No. 3) Bill

Lord Clarke of Nottingham Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

With respect, it is quite right to concede that some of the fears being raised about no deal are grossly exaggerated, but the problems are quite real enough. If we leave with no deal, we will be the only developed country in the world that has no trade agreement at all with anybody and that is having to fall back on WTO rules, which are made to sound marvellous by the Brexiteers but which do not actually amount to very much. We will also be erecting new barriers to trade and investment around the borders of the United Kingdom, including along the Irish border, and that is bound to disadvantage our economy very seriously indeed.

[Jonathan Reynolds]

The Father of the House is as accurate as ever. Some colleagues are pursuing a dangerous argument that all our trading relationships with countries that are not in the EU are somehow currently under WTO terms, which is an absurd misconception. We have entered into trade agreements as a member of the EU that account for something like 16% of our goods exports.

Regardless of the significant impacts of a no-deal outcome, we could go further and say that to leave the EU having not secured a deal—an acrimonious departure —would damage our relationship with our most important trading partner for years to come and fundamentally undermine our credibility on the world stage. I cannot see how any serious-minded Member of this House could understand that that would not be of severe consequence for the United Kingdom, which is why it is so important that this House makes a clear statement today about the dangers of no deal.

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[Nick Boles (Grantham and Stamford) (Con)]

I will be very brief, not least because my right hon. Friends the Members for Loughborough (Nicky Morgan) and for West Dorset (Sir Oliver Letwin) have described much better than I ever could why I am going to support amendment 7, which I signed almost while it was hot off the presses before Christmas. The one point I want to address is the question that has been raised, and indeed the accusation that has been made, that in doing so I and other Conservative Members are breaking faith with our constituents and somehow breaking a manifesto commitment. I believe this to be utterly wrong, and also a rather disgraceful suggestion to make.

In the referendum campaign on our membership of the European Union, I supported and indeed voted remain. However, the argument of my colleagues who voted and campaigned for leave that I found most powerful and most emotionally impactful was that Parliament is sovereign and should take control of all the decisions that affect the lives of my constituents. That was the argument that the leave campaign made that I found the most difficult to resist and the most difficult to say was worth compromising for the sake of our membership of the European Union. It is therefore somewhat extraordinary that the very same people who made that argument so eloquently and effectively during the referendum campaign should somehow have the temerity to criticise me or other hon. and right hon. Members for doing what we believe is right in the interests of our constituents and in the national interest.

[Mr Kenneth Clarke]

I cannot think of a single leading Conservative Brexiteer who would have changed his opinions on membership of the EU in the slightest had the remain side won the referendum. They made it quite clear that they had no intention whatever of abandoning their long-held, quite sincere views, which they would have carried on arguing in this House and voting for. Does my hon. Friend share my view?

[Nick Boles]

The Father of the House is completely right. I have to say—I am sure the same is true of him—that I rather admire them for it. I admire my hon. Friend the Member for Stone (Sir William Cash) for making the same arguments passionately and with principle for 40 years—longer, practically, than many Members have been alive.

I want briefly to address the question of the Conservative manifesto commitment. I should point out that quite large chunks of the Conservative manifesto were junked by the Prime Minister during her own election campaign, so I do not know quite why we have elevated it to be a sort of Moses-style tablet. Nevertheless, it contained a sentence saying that we maintain that no deal is better than a bad deal. I agree, and I agreed then, in my hospital bed, when I agreed to stand as a candidate in the election, that that was the right position for the Government to take. As my right hon. Friend the Member for South Dorset (Sir Oliver Letwin)—West Dorset; apologies to the people of Dorset—explained, it was entirely right for the Government to want to prepare for no deal. Unfortunately, as he pointed out, they failed to do so.

However, what we did not say in that manifesto is that no deal is better than any deal; we said no deal is better than a bad deal. I remind my hon. Friends that we have a deal; it is a deal that the 27 nations of the European Union have agreed, that the Prime Minister, who recently won a confidence motion in the Conservative party, and her Cabinet have endorsed and advocate, and that, at the last count, about 200 Conservative Members, including myself, intend to support when the vote is finally put. It is simply not possible to suggest that by saying that I will not countenance no deal, I am breaking that manifesto commitment. We do not have a bad deal; we may have a deal that you, individually, do not like —not you, Mr Speaker, but individual hon. and right hon. Members—but nobody can claim that we do not have a deal that it is reasonable for Conservative Members to support. It is therefore reasonable for us to say that, at this late stage, with the Government having prepared as woefully as they have for no deal, we will on no account countenance a no-deal Brexit.

Finally, I join my right hon. Friend the Member for West Dorset in very clearly saying this: I will vote on any motion, on any amendment, on any piece of legislation, proposed by whomsoever in this House to ensure that we leave the European Union on 29 March with a deal or not at all.

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[Sir Oliver Letwin]

rose—

[Mr Kenneth Clarke]

rose—

[Robert Jenrick]

I will give way one last time, but I have only a couple of minutes.

[Mr Clarke]

I, too, extend my sympathies to my hon. Friend, who drew the short straw of responding to the debate. He is trying very eloquently to minimise the significance of the whole thing, but of course he realises there are big issues behind this. Can he tell us what contingency arrangements the Treasury has made for the fiscal impact of leaving with no deal, and its likely impact on our trade, our manufacturing industry and so on? He must concede that the published figures for future deficits, debts and so on will be made utterly meaningless if we leave with no deal, and a fiscal crisis will occur. Is the Chancellor planning the emergency Budget he will probably require?

[Robert Jenrick]

My right hon. and learned Friend and constituency neighbour tempts me to go into areas that I should not, but the Chancellor has said that we will be prepared and that we have fiscal room available—that was what he stated in the Budget, as certified by the Office for Budget Responsibility. My right hon. and learned Friend appears to be making the case for prudent preparations in case of a no-deal scenario, which is all that clause 89 seeks to achieve.

European Union (Withdrawal) Act

Lord Clarke of Nottingham Excerpts

Thursday 6th December 2018 Commons Chamber

[Mr Hammond]

My hon. Friend is right, and he takes me back to the question from my hon. Friend the Member for Mid Bedfordshire (Ms Dorries) earlier. If we were to leave the EU in a real no-deal scenario, with such issues left unresolved, we would be in a very difficult place. The small number of transit permits available to hauliers would be just one of the many issues that would cause considerable difficulty.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Before the Chancellor started giving way, he made the point that just being in the customs union was not replicating what we have at the moment, but does he accept that, were we to join Norway, Iceland and Liechtenstein in the European Free Trade Association and, on top of that, agree a customs union that we would need to keep the Irish border open, we could keep a very high proportion of the economic benefits of membership, even if the House insists on proceeding to give up political membership and other aspects of the EU?

[Mr Hammond]

My right hon. and learned Friend is right that, strictly, the flow of trade in goods would be facilitated by such an arrangement, but there are two problems with the EFTA-EEA model. First, it would continue to impose on us the obligations of freedom of movement, which we believe the British people voted against in the referendum decision in 2016. Secondly, it would leave our financial services industry in particular extremely exposed to having to comply with a rapidly evolving body of EU regulation over which we would have no influence.

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[John McDonnell]

Let me press on now.

My fourth and final point is the vulnerability of our economy to a bad Brexit, and, indeed, the vulnerability of so many of our people—the people we represent. The Prime Minister’s deal does not give the certainty our country needs. Even the trickle of muted support from businesses when the deal was first done has now been replaced by a deafening silence. That is because businesses and trade unions alike now understand that under the Prime Minister’s deal we are facing, in 2020, more uncertainty as this Government then decide whether to extend the transition or fall into an unlimited backstop.

If a bad Brexit is forced upon our country, and the economy and jobs are not protected, many of our people who have suffered from eight years of austerity will suffer even more. Indeed, many of us believe that it has been the economic failures of the past and the present that helped to deliver the Brexit vote. I take no pleasure in saying that it was a vote from which the Government seem almost determined to learn nothing. We have an economy that has seen wages grow more slowly than in any other advanced country in the G20.

[Mr Kenneth Clarke]

The right hon. Gentleman started in a welcome tone of offering cross-party collaboration. I was waiting to see what he proposed as the starting point for the Labour party. He spent about 30 seconds on that, in a couple of sentences, and he is now back to attacking the Government and the withdrawal agreement. Am I right in understanding that he essentially agrees with me that we should stay in a customs union and collaborate with our European partners on international trade deals? He talked about us collaborating with the single market, which I do not quite understand. Nowhere in the world is there an open border between two countries unless they have a customs union and regulatory convergence. Is he advocating that? That not only solves the Irish border problem, but eases the economic consequences of leaving the European Union to a considerable extent.

[John McDonnell]

I thank the Father of the House for his intervention. Let me make this clear. First, we want a permanent customs union, and we want to ensure we have a future say in future trade deals that reflects the strength and size of our economy. Secondly, we want a close collaborative relationship with the single market, which we believe we can achieve, but we also want the ongoing protection of regulations on employment, the environment and consumer rights. Those are the negotiations that we wish to undertake—if not in government, as a Parliament.

Leaving the EU: Economic Analysis

Lord Clarke of Nottingham Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

Let me deal first with the point the right hon. Gentleman made about the Chancellor. The Chancellor is of course accountable to this House. He will be appearing before the Treasury Committee on Wednesday to give full account of the arrangements we are discussing today. Indeed, the Prime Minister herself will be appearing before the Liaison Committee.

The right hon. Gentleman raised the Chequers deal and the fact that analysis is being based around that in this paperwork. That is entirely appropriate given that, as he will know, the political declaration suggests a spectrum of possible outcomes for the arrangements. That is why we not only analyse the Chequers proposal, but have a sensitivity analysis around that proposal as well.

The right hon. Gentleman raises the issue of a no-deal scenario. It is the Labour party that is pushing us more in the direction of a potential no-deal scenario by—I have to say it—deciding for its own political reasons to object to the deal we have put forward. To be clear, that deal is good for safeguarding the economic future of our country and it delivers on the 2016 referendum, giving us control of our borders, our money, our laws and ensuring we protect the integrity of the United Kingdom, while allowing us to go out and make future trade deals. This Government are totally committed to achieving that.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend accept that it is not possible to leave a free trade area with our largest and most important wealthy customers and introduce tariff barriers, custom delays, regulatory divergences and delays at borders without making this country poorer than it otherwise would be? It is difficult to see how anybody who follows economic policy can argue the contrary while keeping a straight face. Can he reassure me that the withdrawal agreement that is being put before the House enables no change at all to be made to our economic and trading arrangements through March next year until we go into a transition period that can be extended as long as is necessary to introduce practically any economic arrangement for the future that we want? It is obvious to me that we should stay in the single market and the customs union. Can he reassure me that that is still a perfectly reasonable possibility?

[Mel Stride]

My right hon. and learned Friend raises a number of points. The paper does not duck the question of the economic impact of the proposed deal compared to the status quo—the relationship with the European Union as it persists today. It makes it very clear that it will be detrimental in the economic sense. That is extremely clear. But I would put it to him that the deal is the best for the economy going forward as part of a deal that also delivers on several other things, some of which are entirely non-economic, such as control of our borders and free movement.

Taxation (Cross-border Trade) Bill

Lord Clarke of Nottingham Excerpts

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

[Anna Soubry]

The hon. Gentleman is absolutely right. It is disgraceful, because this White Paper is a genuine attempt by our Prime Minister to heal the divisions in our party, and indeed the divisions in our country, and take us to a smooth and sensible Brexit that delivers for everybody.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend agree that, if the Government were guaranteed the support of the Labour party and the Scottish National party against these wrecking amendments, we could finally reveal what a tiny minority of the House of Commons is trying to hold us all to ransom over a reasonable deal with the European Union?

[Anna Soubry]

My right hon. and learned Friend is right, as ever.

The truth is that both main political parties are now in the grasp of the few who falsely claim to speak for the many. A lack of ability, or perhaps courage, the over-liking of the safety and sanctity of ministerial office or, frankly, just a quiet life, on whichever side of the House, and a guaranteed income for a loyal Back Bencher with a handsome majority, mean that our country is hurtling not just towards the extremes of British political life, but over the Brexit cliff, which the overwhelming majority of leavers did not vote for—indeed, they were promised the precise opposite.

The time has come for the nonsense to be stopped. The time has come for people to show courage and do the right thing by our country. We are leaving the European Union, but we have to leave in such a way that protects jobs and prosperity—and peace in Northern Ireland—for everybody in this country. It is time for people to put aside the ideology and the nonsenses that invariably come from not inhabiting the real world. Let us face up to reality, as this White Paper seeks to do, and reject these two ludicrous amendments that the Government have agreed to. In due course, let us wake up to the further reality: we will end up in the single market and the customs union; the only question is when.

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[Mr David Davis (Haltemprice and Howden) (Con)]

For the convenience of members of the Gallery, I should start by saying that this is not a resignation statement—that was last week. This week is a return to my normal business, as an ordinary Back Bencher carrying out the scrutiny of business. I thought that it would be rather mundane until I walked into what appears to be this rhetorical firefight that we have had so far in the debate.

Before I come back to that, the Taxation (Cross-border Trade) Bill and its partner, the Trade Bill coming tomorrow, are vital pieces of legislation. In the newspapers at the weekend, I read that some people were so cross with the White Paper that they were proposing to vote against this. Well, I do not think that they can be much more cross than I am with the White Paper, but I urge them not to vote against it. These are vital pieces of legislation and they are necessary, whether we have the Government’s White Paper policy, my old White Paper policy, the FTA that some have talked about or indeed even the World Trade Organisation outcome. In every single case, we need these Bills and therefore I will be supporting them.

I want to speak directly to the new clause proposed by my right hon. Friend the Member for Broxtowe (Anna Soubry). I will do so without impugning anybody’s motives or questioning whether somebody is acting in the national interest or not and I will not be firing off any gibes. I am not quite sure who she was referring to when she talked about having an excessive attachment to public office, but I do not think it was me. The simple truth is that this is a vitally important argument. It is central to the whole question of the economic aspect of Brexit—Brexit is not just economic; it is democratic as well, but it is central to that—and I will put to one side in my arguments the fact that being out of the customs union was in the Conservative party’s manifesto and therefore, in theory at least, one we are committed to.

The arguments go right to the heart of the principal issues. The proponents of the new clauses have a clear belief in the national economic interest, but they clearly believe that being outside the customs union will lead to a precipitate loss of trade and that the loss of the ability to make trade deals matters less than that potential loss of trade. That is the core of the argument. It is pretty straightforward in that respect.

Let us look at some facts. Back in 1999, the United Kingdom—we are talking about the customs union, so this is about goods—was exporting 60% of its goods to the European Union and 40% to the rest of the world. Since then, that has gone down by approximately 1% per annum, so it is now about 45% to the European Union and the rest to the rest of the world. Pretty much by the end of this decade, it is likely to be 60:40 in favour of the rest of the world, so because it takes away the right to our own commercial policy, the prospect of staying inside the customs union favours the shrinking minority of our trade over the expanding, fast-growing majority of that trade. That is the very simple, fundamental, initial point that we should take on board. It also presumes that being outside the customs union will significantly damage trade because there will be friction at the border.

[Mr Kenneth Clarke]

One of the most remarkable features of the last 20 years has been the globalised economy and the very rapid growth and emergence of major new markets, so inevitably the balance of our trade was going to grow with them and decline with the European Union. We want to remain as attractive to investors from the new economies as to the old. It does us no advantage in our dealings with China, Brazil and India to damage the value of our access to the European market. Outside events have altered this balance; it is not a failing of our EU arrangements.

[Mr Davis]

My right hon. and learned Friend was being uncharacteristically inattentive, because that is exactly what I said: because of the growth in world trade, that is what is going on. He is exactly right that we should take a great interest in the fast growth in world trade because we are best placed, probably of most countries in the world, to take the most advantage of that. Also within his comment was the presumption, which I was about to address, that friction in our trade with the European Union—low friction, but friction—will cause enormous damage.

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[Yvette Cooper]

Let me just deal with new clause 36. If the Government are saying that they will accept it, I do not understand how that does not rip a hole right through their White Paper. New clause 36 explicitly states that we cannot collect customs and excise duties at the border on behalf of another country unless that country is going to do the same for us, but the White Paper states:

“However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK.”

That is the opposite of what is said in new clause 36. Have the Government ripped up their own White Paper in the space of a couple of days? This is a chaotic approach to a matter that is so serious, and it shows a ridiculous wobbling in the face of a small group of people who I do not believe speak for the majority in this country.

[Mr Kenneth Clarke]

That phrase in the White Paper describes a perfectly sensible arrangement. If we adopt the new clause, 27 other countries will face the prospect of searching for new technology and setting up their own bureaucratic arrangements to accommodate the Brexiteers in my party. We urgently need these EU negotiations to start with partners who can rely on us to stick to a consistent line, and it could be very damaging to change the basic position on such an important matter within one week.

[Yvette Cooper]

I think that the right hon. and learned Gentleman is right on two counts. First, I think that this inconsistency and buckling in the face of objections from what I consider to be an unrepresentative group is the wrong approach. Secondly, I think that these customs arrangements are immensely important.

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[Mr Kenneth Clarke]

Mr Speaker, I am grateful to you for calling me. You may be disbelieving, but I assure you that I will do my best to speak for fewer than 12 minutes, so I shall be rather more pithy than usual.

For the last 40 years, we have achieved some remarkable transformations in the British economy. We have made ourselves one of the most attractive economies in the world for inward investment and developed an extremely competitive modern economy in both goods and services. That is not entirely attributable to the single market and the customs union, but they played a very large part. The UK is regarded by many of the great firms that invest in this country as the most business-friendly member of the EU and the most attractive place to invest in a way that gives absolutely unfettered access to the largest developed international free trade area in the world. I personally have never understood why we are seeking to detract from that. In the referendum campaign, absolutely nobody made a major feature anywhere of saying that we should withdraw from these arrangements, and certainly nobody advocated the virtues of putting in place at our ports and borders customs checks, customs procedures, tariffs, regulatory divergence and all the things that cause cost.

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[James Cartlidge (South Suffolk) (Con)]

The key concern for me is that we seem to be separating EU trade and non-EU trade, but is it not the case that so much of our non-EU exports are from foreign-owned businesses that invest in this country for export precisely because of the attraction of the single market and so on?

[Mr Clarke]

I agree and that is why I tabled, with my right hon. Friend the Member for Broxtowe (Anna Soubry), new clause 12 on a customs union. I have taken the view that, while I can see nothing wrong with that amendment, I am prepared to try to get us out of this political chaos by giving the Government White Paper a try. It is attempting to reach precisely the objectives I am arguing for: frictionless trade, with none of these procedures at the border. I cannot see what is wrong with a customs union. If anyone calls a vote on that, I shall abstain. I do not vote against amendments that I plainly agree with and that I have tabled. If a facilitated customs arrangement can be devised which achieves the same, good luck. What is most important is that, now we have the White Paper, we agree with our partners in the EU that we now negotiate on this. We have wasted two years and are facing laughable suggestions that we are going to solve all the problems now in the next three months, or possibly by Christmas if that slips. That is absolutely ludicrous. That is the uncertainty that is racking business and anybody in the country with an interest in our economic future.

Now we have actually got quite a large majority of the Cabinet to agree on this. I never thought the Cabinet we had was ever capable of agreeing on anything on this subject because of the sincerely held, completely opposite views on virtually every aspect of it. We now have most of the Cabinet behind it. If we give them a chance, lots of developments will take place. As compromise takes place, with any luck, people who actually understand the subject will be allowed to try to come up with some workable version of this that achieves the essential objectives.

I am afraid the debate that the public are listening to infuriates them as it is all about personalities. Most sensible members of the public do not have the faintest idea what we are talking about because, throughout the entire debate, no one has ever given a proper explanation to the country of what a customs union or a single market even are and what certificates of origin involve. That is inevitable. We have never debated these things before, but we owe it to the public to have a slightly more sensible debate in future.

Half the arguments used in the general debate do not understand what a trade agreement is with any other country. As things stand, if we leave with no deal, we will be the only developed country in the world that does not have a trade agreement with any other country, because it is not going to be easy to roll over all the other agreements we have with other countries, which are based on the EU. We have driven the EU to achieve all those agreements. I agree that there are problems with 28 member states negotiating, but the problems with America are far worse. All the Americans want to do is export food to us; they will not open up their public procurement or their service industries.

[Mr Djanogly]

rose—

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[Mr Clarke]

I cannot give way.

Some people want us to give up the hated European rules on animal welfare and food standards and bind ourselves to the lower American rules on food standards. So Congress—Washington—will be telling us what our standards are in those areas in future and we will be excluded from European markets and have to have a hard border with Northern Ireland and with the continent. Anyone listening to some of the opponents of the EU would think that other trade agreements simply let us have all the advantages with no obligations. All trade agreements involve mutual agreements on regulation, standards, health and safety, welfare and all the other relevant things that the parties mutually bind themselves to accept. There is not a country in the world that would accept a trade agreement of the kind that my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) seems to be describing when he warms to the subject.

These are hugely important subjects, but for the past week, we have been debating them in the national debate in the most farcical and chaotic way that I can remember in my political career. The outcome is hugely important. If, one week after the Government set out a policy that I personally was prepared to give a fair wind to, I find that they are going to accept proposals such as amendment 73 and new clause 36, which promptly change that policy in a quite ridiculous way, I shall despair. The Government have only to vote against those new clauses and amendments; I am absolutely certain that the Opposition parties would not be able to think of a sensible reason why they should help my hon. Friend the Member for North East Somerset and others to get a majority in this House. We can demonstrate that they are a tiny handful of people, and their arguments are most certainly not in the national interest.

[Several hon. Members rose—]

[Mr Speaker]

Order. The new time limit will have to be no more than eight minutes.

[Mr Clarke]

I have saved us a few minutes.

[Mr Speaker]

Indeed, and we are immensely grateful.

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[Mel Stride]

Services are most certainly not less important than goods; they make up about 80% of the economy and we will retain greater freedoms in terms of being able to do deals around the world in that respect. But under this approach, the UK will apply its own tariffs and trade policy for goods intended for the UK and the UK’s tariffs and trade policy for goods intended for the EU. This option meets the UK’s strategic objectives for our future customs relationship with the EU.

[Mr Kenneth Clarke]

I congratulate my right hon. Friend on his wedding anniversary. He has mentioned the facilitated customs arrangement, which is the point of the White Paper. In describing it, the White Paper states at paragraph 17:

“However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK,”

and also says we are not expecting it to be replicated in Europe. New clause 36 directly contradicts that. I gather that there are legalisms that the people who advised on the White paper no doubt did not consider when we put in the reference to reciprocity. Now my right hon. Friend is going to give us legalisms as to why it does not matter if we take reciprocity. The political point of these amendments is to destroy the White Paper and the arrangements it proposes. If he accepts them, their supporters will come back for more. Why does he not vote against them and leave them in the tiny minority in the House of Commons, that they actually represent?

[Mel Stride]

I thank my right hon. and learned Friend for that intervention. I have very little time, but I will come on to his point. The main point is that one has to read paragraph 17a of the White Paper in its entirety to grasp its full meaning, rather than take one part of it.

I will now address the amendments before us today. New clause 1 and consequential amendment 2, as spoken to initially by my right hon. Friend the Member for Broxtowe (Anna Soubry), would establish a negotiating objective for the UK to maintain its participation in the EU customs union and make the commencement of parts 1 and 2 of the Bill conditional upon the outcome of those negotiations. I have already set out that the UK leaving the EU customs union is a straightforward legal consequence of leaving the EU, so the Government must reject these amendments, as well as amendment 1.

The same applies to other amendments before us today: new clauses 1, 3, 4, 11 and 12 and their various consequential amendments, as well as amendments 8, 9, 12 and 14, but that does not mean that we will not seek to enter into a business-friendly and pragmatic arrangement that maintains trade that is as frictionless as possible between the UK and the EU27 as part of our future partnership with the EU. That is because this Government fully recognise, as was set out so eloquently by my right hon. Friend the Member for Broxtowe, the vital importance of the EU as a trading partner that in turn supports the economy and jobs and prosperity throughout the UK.

Let me now turn to new clause 36, tabled by my right hon. Friend the Member for Witham (Priti Patel), which would prevent the implementation of a new arrangement that would see HMRC accounting for duty collected by HMRC to the Government of another territory or country unless the arrangement was reciprocal. The Government have been clear in the White Paper that under their proposed facilitated customs arrangement, the UK and the EU would agree a mechanism for the remittance of relevant tariff revenue. The UK proposes a reciprocal tariff revenue formula taking account of goods destined for the UK entering via the EU and of goods destined for the EU entering via the UK. The White Paper itself states:

“The UK and the EU should agree a mechanism for the remittance of relevant tariff revenue. On the basis that this is likely to be the most robust approach, the UK proposes a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK.”

New clause 36 is consistent with the Chequers proposal and the White Paper, so the Government are content to accept it—

Customs and Borders

Lord Clarke of Nottingham Excerpts

Thursday 26th April 2018 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I will strive to do my best, Mr Speaker.

May I begin by congratulating the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), the other Chairmen of the Select Committees and the Liaison Committee on obtaining this debate and on tabling the motion? It is remarkable how little attention Parliament has been allowed to pay to the momentous events that are taking place at the moment and that will certainly take place over the next few months, which have a profound importance for the future health of our economy and the standing of this country in the world.

At the moment, Cabinet members are trying to agree among themselves their negotiating position, and those in the shadow Cabinet are trying to reach an agreement among themselves on their response. Meanwhile, events are moving on, and I think the House of Commons should have more opportunities to give its views, exercise influence and debate a substantive motion every now and again, not just a motion that has already been dismissed, in the curious way we do in this Parliament, as somehow not legally binding and therefore one that need not be regarded as important.

I have often agreed with the right hon. Lady in the past, but I do not think I have ever heard her make a speech in which I agreed with just about every sentence she uttered. That will enable me to respond to your request, Mr Speaker, because she said it all with great eloquence and there is absolutely no point in my simply trying to repeat all of it or anything like all of it. The only thing I disagreed with is that she revised—no doubt for party reasons—the strange conspiracy theory that trade deals with America might involve privatising the NHS. I have no doubt that someone will try to explain the logic of that argument in the course of this debate. However, I totally agreed with everything else she said.

That is rather surprising, because everything the right hon. Lady said was in line with what has always been the official, mainstream policy of the Conservative party throughout the first 50 years of my membership of it. Some of my colleagues seemed to have a strange conversion—like St Paul on the way to Damascus— about two years ago, but I am afraid that the light did not strike me.

This debate bodes well for what needs to emerge. Many of us in this House have argued for some time for a cross-party convergence, in the national interest, so that this House can make sure that no damage is inflicted by the consequences of our leaving the European Union, or—to be more precise, I am afraid—so that we can limit that damage so far as possible.

The underlying point is clear: the economy of this country and, to an extent, those of other European countries, will be damaged if a sudden decision is taken to erect new barriers at the border between the UK and our major trading partners.

[Chuka Umunna (Streatham) (Lab)]

rose—

[Mr Clarke]

I will give way in just a second. There are no advantages in introducing tariffs to European trade, which I do not think anybody wants to do, or new customs procedures and processes, and there are no advantages in producing regulatory differences between our market and the European market. If people insist on having a new free trade agreement, it should include, and as far as possible replicate, the arrangements that the customs union and the single market give us now. If any hard-line Eurosceptic wishes to get up and say why it is positively in the British interest to have new customs procedures, and that we want more lorry parks at Dover and wish to delay the lorries carrying goods one way and the other, I would be interested to hear it. I shall turn in a moment to the main argument—indeed, as far as I am aware, it is the only argument—that most of them ever give for leaving the customs union. First, I give way to the hon. Gentleman.

[Chuka Umunna]

I am grateful to the Father of the House for giving way. He has served in this House for 48 years, if I am not mistaken, and served in a number of Governments. He will know that this Government have been advised by their own officials that leaving the single market and the customs union will make this country poorer. In all his time in this House, can he think of any Government who have knowingly taken a decision of this gravity that would make the country poorer? Can he think of any example of any Government he has seen do that?

[Mr Clarke]

Not deliberately—but accidentally, several times. [Laughter.] The hon. Gentleman makes reference to my great longevity, which is the one non-controversial feature of my presence in this House. Practically all my old friends from several Governments are now ennobled and in the House of Lords, where they are debating these very matters. Actually, all my colleagues who have served in Governments during my time—particularly under Margaret Thatcher and John Major—who are still with us and in the House of Lords are voting in line with this motion. They are of the same opinion, because is it is utterly unprecedented for us to get into a position of this kind.

The only argument—certainly the only one the Prime Minister ever uses—for leaving the customs union is that we can have trade agreements with the rest of the world. We also refer to “a customs union”, for reasons that have been explained; it would be a replica of the present customs union. It is quite right to say that, in the customs union, we do not have total freedom to negotiate. We have a common tariff barrier around the customs union, and no member can punch holes through it and start letting in goods from various markets under different arrangements. Once anyone started to do that, it would be necessary to stop the goods seeping through. A great deal of work is being done at the moment, as I understand it from following the leaks in the newspapers and talking to my contacts among those involved, to try to find a way to achieve something similar that would be acceptable. We will have to see how that goes.

It has already been said that, for over 40 years, Governments of both parties in this country who essentially believed in free trade, and who found that Britain gained ever more advantages from developing a free trade climate, have been extending free trade through our membership of the European Union. First, we had the common market—the customs union—and then we added the single market to it, removing all the regulatory barriers. Then we encouraged EU agreements with an ever-increasing number of countries, which reduced the barriers yet further in all those markets around the world. Indeed, my right hon. Friend the Member for Wokingham (John Redwood) has said that this helped us to make progress in the rest of the world as well. Not only have we participated in that but, in my opinion, British Governments have been the most influential and leading advocates of that approach inside the European Union.

It is not true to say that we have been an isolated, powerless member, ignored and penalised by the others. I believe that on issues of the economy, on liberal economic policy and on trading policy, the United Kingdom has been the leading influential member in Europe, and I think that was probably as true under the Blair Government as it was under the Thatcher and Major Governments. We were responsible for the single market. All the way up to the Cameron coalition Government, we were in the lead in Europe in pressing for the EU agreements to be extended to other countries.

I do not remember even Eurosceptics bothering to raise much objection to that policy. Even during the referendum, I did not hear any Brexiteer, including the ones I debated with, saying that they wanted more protectionism or that they wanted to withdraw from all that. Dan Hannan is one of the most articulate advocates of the Eurosceptic cause, and I debated with him twice in town hall settings during the referendum. I always got the impression that he was in favour of the single market. Again it is important to stress that it is possible to leave the European Union and to stay in the single market and the customs union. There is no constitutional or legal barrier to that happening, and the Commission has made it plain that it could be on offer. However, if we are not going to do that—for reasons that I do not understand—we will have to replicate it pretty well.

[Peter Kyle (Hove) (Lab)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I will give way, after which I will go back to the question of trade relations with non-EU countries.

[Peter Kyle]

On a recent visit to Norway with the Business, Energy and Industrial Strategy Committee, we heard Norway’s lead negotiator with the EU explain that, being outside the customs union, Norway is in a permanent state of negotiation with the EU regarding trade and customs. He said that Norway would sometimes win a concession, only to lose it in a negotiation a couple of years later. Is not this precisely the status that businesses come to Britain to avoid?

[Mr Clarke]

I quite agree. The Norwegians have a second-best solution by a good long way. When I was Chancellor, we were engaged in negotiating with the Norwegian Government and with other would-be new members over full membership of the European Union, which on the whole the entire Norwegian political class, left and right, supported. The same thing happened here during the referendum, when every significant political party in this country was in favour of remaining, with the exception of UKIP and the Democratic Unionist party. The Norwegians came out with not a bad compromise, but it was far less satisfactory than the one we are starting from as we negotiate now.

[Anna Soubry]

Will my right hon. and learned Friend give way?

[Mr Clarke]

With great respect to my close ally and friend, I must make a little progress and finish making this point. I might already have had my 10 minutes.

The theory is propounded to the British people that we somehow have nothing to do with these EU trading arrangements and that somehow, when trade deals are done, grey men in the European Commission secretly impose upon us all sorts of restrictive terms. Indeed, the right-wing press give the impression to all their readers that that is what we are facing now. They suggest that Jean-Claude Juncker and Michel Barnier are somehow plotting against us, that the whole thing is being done by unaccountable Eurocrats who are trying to take revenge on us, and that the trouble with our EU trade deals is that we have no say in them and they happen mechanically. That is complete rubbish, and it is rubbish that has been propounded for the last 30 or 40 years.

The Commission does have some roles that our civil service does not have, but basically it can negotiate only if it has the approval of each and every member state’s Government. It negotiates only within a mandate that the states have agreed. In my own ministerial experience of EU trade and economic affairs, the bigger countries —particularly Britain—have a huge influence on what is being negotiated. In my last job in the Cameron Government, when I was in the Cabinet Office without portfolio, I was asked by David Cameron to lead for us on the EU-US Transatlantic Trade and Investment Partnership deal. I spent time in Brussels and Washington doing that. I cannot say that I played a key role, but the whole point was that the British were keen advocates of that, along with the Germans, the Italians and the French. We were all close to what was going on, and seeking to find out where things were going and whether we could push it. No deal has ever been done by the EU with any other country that anbody has ever objected to in the United Kingdom. For example, no British Government ever protested about the EU deal with South Korea, which is one of the better ones that we have achieved recently. No one ever told me they were against it.

[Norman Lamb (North Norfolk) (LD)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I really should not, because the Speaker will get extremely annoyed. I must come to a quick conclusion and I wanted to touch on Ireland. I apologise to the right hon. Gentleman, but other people must get in.

It is an utterly ludicrous idea that it would somehow be better if we do things on our own. The countries always cited are the United States, Australia and New Zealand, and they will do deals with us because they all want to sell us foodstuffs. There is not a great deal of trade that we can add between us and New Zealand and Australia, and the Americans are desperately keen to sell us their beef and their chicken. As someone has already said, all trade deals are not done by a sovereign country saying, “Of course we are not binding ourselves to do anything.” They involve the agreeing of market regulations and of the trading rules that will apply. We would not say, “It’s all going to be decided by the British courts.” There would be an international arbitration agreement to which businesses and countries could look if one side started breaking its treaty obligations. The Americans will say, “Give up these European food safety and environmental regulations, and we will trade with you on ours.” If we let in chlorinated chicken, hormone-treated beef and genetically modified crops— personally I am not convinced that they are the health hazards that most people in the country seem to believe they are—that means new barriers with Europe, which will not let those products go straight through, and we will probably lose a large part of our biggest market, for food and agricultural products, which is in Europe.

I have one final point to make on international trade and about where the debate is unrealistic. WTO rules have suddenly been elevated to some mystic world order that means that our new trade agreements will somehow be much better. I wish that were true. This country does abide by WTO rules, but they are nothing like as comprehensive as they ought to be because the Doha round failed. The Americans take no notice of the WTO. The Americans and the Chinese are about to start a trade war, and everything that they are doing is in total breach of WTO rules. We will not get a deal with Donald Trump subject to WTO rules. He will not even appoint judges to the WTO court, because otherwise it might do what is usually its major duty, which is settling disputes between states.

Going back to what the right hon. Member for Normanton, Pontefract and Castleford said, we want trade with Europe that has no barriers between ourselves and Europe. It will require some ingenuity to find some basis on which we might still be able to do trade deals with other people, but the idea that some marvellous new global future with fantastic new trade deals is about to open up is hopeless. If someone can get the Americans to open up their public procurement to international competition and give up the “Buy America” policy or to open the regulatory barriers that they have put in the way of professional and financial services, they will be a miraculous negotiator, because we could get nowhere when Obama was in power. I do not think that the present Administration are offering us anything; they just want their beef to come here.

Finally, on Ireland—I will be much shorter on this because it is a big question that has been touched on already—it is absolutely critical that we do not break the Good Friday agreement. It is quite obvious that most people on this side of the Irish sea had never thought about Ireland when we were debating during the referendum and when they were propounding their policies. The problem of the Good Friday agreement has been addressed by most Brexiteers by them saying, “Surely that’s all over now? Isn’t it a nuisance? What an irrelevance. Let us break it now, because it no longer matters. It is far more important that we get the kind of hard Brexit that we want.” That is very dangerous.

The Good Friday agreement is one of the major achievements of the British Governments of my time. It was negotiated with the Americans, with the Government of the Republic of Ireland and with every section of opinion in Northern Ireland. It brought an end—almost; it is the end, I hope—to 200 years of the troubles in Ireland after they erupted into violence. When the troubles were under way in the ’70s and ’80s we lost more policemen and soldiers in Ulster than we did in Iraq and Afghanistan put together. The agreement was a splendid achievement for John Major and Tony Blair, so to say, “What an inconvenience. It is getting in the way of our leaving the customs union,” is very dangerous.

I thought that the Government had accepted that. Indeed, I think they have done so formally on two occasions. First, we had the Prime Minister’s Florence speech, which addressed the matter. Talking about the discussions she had had with Europe about Northern Ireland, she said that

“we have both stated explicitly that we will not accept any physical infrastructure at the border.”

That was solemnly agreed. It was the agreed Cabinet policy. The Foreign Secretary made a strange speech before the Florence speech and a statement shortly afterwards that gave the impression that he was trying to undermine the speech, but I am sure he was not. That statement is already agreed Government policy.

Secondly, we finally managed to make progress by finishing the withdrawal agreement, and we published the texts of what had been agreed. As people have said, there are all these other possible solutions involving using congestion charge cameras and things to avoid issues at the border, but I do not think that they will get very far. We have already committed ourselves to the following:

“In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation”,

which I think means pretty well full regulatory convergence. As someone has already said, the chief constable of Ulster has said that we cannot have infrastructure at a new hard border. It would outrage nationalist and republican opinion across the whole island and take us right back to all the problems we had. Symbolism is huge in the politics of Ireland and always has been, and it would be grossly irresponsible to put a hard border in the middle of the island of Ireland again. We have never been on such good terms with the Government of the Republic of Ireland since the Republic was founded.

If we have those arrangements at the Irish border, the same arrangements will of course apply to Holyhead and to Dover. That is what I want to see. We want no new barriers and no customs processes. We want the necessary level of regulatory convergence. Obviously, the easy way to do that is to stay in the customs union and stay in the single market. If not, we will need what I think the Prime Minister described as a “customs procedure”, which will be something that looks remarkably like the single market and the customs union.

The customs union is what today’s business is about, and it would do terrible damage to this country if, for strange ideological reasons in the confused aftermath of a misguided referendum, we were to take such a foolish step as not to replicate the customs union in any future arrangements.

[Stephen Doughty]

On a point of order, Mr Speaker. I apologise for interrupting this important debate on a topic on which I have strong views, but something has come to my attention in the last few moments. As you will be aware, the Home Secretary endured some strong questioning both this morning and at yesterday’s sittings of the Home Affairs Committee about removal targets. The BBC’s political editor is now reporting that the Home Office in fact intends to scrap the internal removal targets, so I wondered whether you had received notice that the Home Secretary plans to come back to clarify the statement that she made earlier, which was of course a clarification of statements made by her and her officials yesterday and, indeed, by the Prime Minister, who is responsible for this mess starting in the first place.

--- Later in debate ---

[Kate Hoey (Vauxhall) (Lab)]

Mr Speaker, I very much think that I will not need to take cognisance of your allowing me longer than Members who will speak later.

I see the right hon. and learned Member for Rushcliffe (Mr Clarke)—my constituent—regularly and I congratulate him on his speech. He said that he agreed with every single word of the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), who moved the motion, and I can say—very carefully—that he will probably not agree with a single word that I say. I feel a little alone today. We will have an important debate about this issue in a few weeks’ time, when there will be a very different tone in the Chamber, and I hope that saying my few words today will not stop my being called when it comes to our real debate on this issue.

The right hon. and learned Member for Rushcliffe said in the final sentence of his speech that we should stay in the customs union and the single market, but there is no doubt that he was really saying that we should stay in the EU. I am afraid that a lot of Members in the Chamber are using the issue of the customs union as a way of restarting the process of trying to stay in the EU. They will not achieve that, but they are sending a message that the European Union will love. The EU will love seeing such division in this Parliament and that we cannot unite in telling it that we want a proper agreement in which we do not need tariffs and under which we can work with the EU as we would want to work with the rest of the world.

[Mr Kenneth Clarke]

Will the hon. Lady give way?

[Kate Hoey]

I will give way to the right hon. and learned Gentleman, but then I will not give way an awful lot.

[Mr Clarke]

The hon. Lady does not normally use a European debate to make the allegation that this is just a subtle way of staying in the EU and defying the referendum. She will recall that during our eight days in Committee on the European Union (Withdrawal) Bill, no amendment was tabled as an attempt to stay in the European Union. Nobody has cast a vote in this House to stay in the European Union. Although there have been only two speeches so far, there have been many interventions, and nobody has stood up to demand that we stay in the European Union. Of course, the private opinion of many Members—the majority, I think—is that it would be better if we stayed in the European Union, but we are working on the premise that, if we do leave, we must minimise the damage.

--- Later in debate ---

[Kate Hoey]

The problem with our staying inside a customs union is that we would then be subject to the decisions of a European Union of which we are not a member. Let us not forget that many businesses in this country do not trade with the EU at all, but are bound by all the rules, regulations and paraphernalia that go with EU membership. In any kind of customs union, I cannot see that the EU would allow the kind of things for which some of my colleagues are pushing.

While the EU accounts for 40% of our trade, that is because the arrangements imposed on us by our EU membership concentrate trade within this protectionist block. Although the proportion of our trade with the rest of the world is rising, I believe that the customs union holds us back and we could be doing so much better. We do not seem to have much confidence in our own country and our own businesses. Despite what the EU has insisted on, those businesses have still managed to export, trade and do very well. We could do so much better if we were outside the customs union.

[Mr Kenneth Clarke]

Will the hon. Lady give way again?

[Kate Hoey]

Oh, all right.

[Mr Clarke]

I will not intervene again, I promise. It is very courteous of the hon. Lady to give way.

Let us look at China as an important market. Germany exports four or five times as much—I am probably understating it—to China as the United Kingdom does. It is not held back in some curious way by being in the EU, and nor is the growth of all our trade with the wider world held back in the slightest by the customs union or the single market.

[Kate Hoey]

The right hon. and learned Member and other Members have said that, and we have to make a lot of changes in this country to ensure that we can do much better than has been the case inside the European Union, but being outside the EU and the customs union will be almost a catalyst by ensuring that our businesses have that opportunity and freedom to do better than they are doing at the moment.

Those people who pushed for the Norway option during the referendum campaign and even since seem to forget that Norway is outside the customs union and is doing well. In fact, when I went to a conference in Norway recently, the feeling among people there was that they wanted to get out of the European economic area as well. They are looking to us to make a successful transition from the EU and they will probably follow us.

Spring Statement

Lord Clarke of Nottingham Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.

I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.

The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.

The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.

The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.

The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.

The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.

The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackling rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.

No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.

The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I congratulate my right hon. Friend on his very forceful statement based on competent government and grown-up politics, which are worlds that the shadow Chancellor will never enter. When my right hon. Friend comes to prepare his Budget for November, I am sure he will be looking for any new source of taxation that may be needed to put even more money than he already has into the NHS and social care, which are facing vast increases in demand.

May I suggest that my right hon. Friend looks at some of the extraordinary anomalies he has inherited in the tax treatment of older prosperous people in full-time work in this country? [Laughter.] Well, I think I am perfectly well placed to make my point and cannot be accused of personal bias. It is absurd that older employees pay less tax on their income than their younger colleagues because they do not pay national insurance. It cannot be right that people in large houses enjoying capital gains from the housing market have those disregarded for means test purposes if they ever need certain types of social care. As the early Budgets in a Parliament are a time for tough and difficult decisions, will my right hon. Friend let me know that he will be looking at those much overdue anomalies, which need to be addressed? Some justice between the generations, I think, is being demanded by our constituents.

[Mr Hammond]

I am a great fan of the concept of intergenerational fairness. My right hon. and learned Friend will know, as a former Chancellor of the Exchequer, that all Chancellors look at all options in the run-up to every Budget. I can undertake that I will do so in the run-up to Budget 2018. In the meantime, I can tell him that there is a mechanism for voluntary donations to Her Majesty’s Treasury, and in case he has mislaid it, I will send him a copy of our bank details.

Taxation (Cross-border Trade) Bill

Lord Clarke of Nottingham Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Mel Stride]

I say gently to the right hon. Gentleman that we are going down a rather well-worn path. The answer is quite simple: in June 2016, the British people took a decision—people may have ended up on different sides of the argument, but they took a clear decision—that we would exit the European Union. As a consequence of that, we will be leaving the customs union.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I was almost reassured by what my right hon. Friend said in response to my hon. Friend the Member for Stone (Sir William Cash). Would it not remain perfectly lawful under clause 31 for this country either to stay in the existing union, or to re-enter it quite quickly without any further change to the law, and while remaining party to all the EU agreements with about 70 other countries and participating in them as though we were still a member of the European Union? If that is strictly the effect of the Bill, may I tell my right hon. Friend that I would be considerably reassured?

[Mel Stride]

As my right hon. and learned Friend will know, article 50 was invoked—the decision was taken to invoke that particular article—with the consequences that we will exit the European Union on 29 March 2019, and therefore leave the European Union customs union. However, clause 31 does indeed facilitate our future ability to enter into customs union arrangements with other customs unions or territories, subject to the express will of Parliament, as I detailed with reference to the affirmative resolution that would have to be passed by the House.

--- Later in debate ---

[Mel Stride]

My hon. Friend raises an extremely important point. At the heart of the issues that we are discussing are British businesses of all sizes. Because we want to ensure that we have an environment that is as good as possible for those businesses, consultation has been at the heart of our approach. We produced a discussion paper last year, as well as a White Paper, to which we received responses. I know that my colleagues in Her Majesty’s Revenue and Customs have been actively engaged for many months in roundtable discussions with not just businesses, but representatives of ports and airports, and all the important actors in the process of importing and exporting into and out of the United Kingdom.

Perhaps I could now make a little progress—

[Mr Kenneth Clarke]

Will my right hon. Friend give way?

[Mel Stride]

Before I do, I give way to my right hon. and learned Friend.

[Mr Clarke]

I am extremely grateful to my right hon. Friend for giving way so generously, and for giving way to me twice. Let me also congratulate him on the eloquent clarity that he is bringing to this whole subject. He confirmed to my hon. Friend the Member for Gloucester (Richard Graham) that this is essentially a contingency Bill in case things change, and that it covers everything from carrying on roughly as we are now to having quite different arrangements. However, does it remain the Government’s preference that things should stay the same if the negotiations are successful? Paragraph 10 of the explanatory notes states that

“it is the government’s intention that the UK’s Customs regime will continue to operate in much the same way as it does today following exit from the EU.”

Can my right hon. Friend confirm that that remains the Government’s policy intention in the context of the forthcoming negotiations?

[Mel Stride]

My right hon. and learned Friend raises an important point. The Government are indeed saying that we recognise the importance of ensuring that we have a smooth and frictionless trading situation between ourselves and the European Union once we have left it. Although we will have left the European Union, the Bill will facilitate our ability to have similarities in the way in which we trade. It will then be up to us to decide how we deviate from our starting point. We see the current position, under the European Union code—the customs code and the legislation in the European acquis—as a starting point to which we need to be reasonably aligned, even though we might diverge from it in the years ahead as a result of the negotiations, if that would be to the benefit of our country.

Exiting the EU: Costs

Lord Clarke of Nottingham Excerpts

Wednesday 29th November 2017 Commons Chamber

[Elizabeth Truss]

I can tell the hon. Gentleman what my constituents say: “The country has voted to leave the European Union.” What they want to see is us getting on with that and securing the best possible deal for Britain. If we look at the Opposition Benches, we can see Members who, like the hon. Gentleman, voted to stay in the single market and the customs union, and we also see Opposition Front Benchers who voted to leave the single market and the customs union. Today we read that the shadow Home Secretary wants a second referendum. That is not remotely helpful in securing the best possible deal.

The hon. Gentleman knows perfectly well that we are in negotiations as we speak. If we were to talk about numbers and aspects of the deal in this House, we would be cutting across our negotiating position. The people of Britain want us to get on with it, to take the advantages of leaving the European Union, to make the most of the opportunities and to secure the best possible deal. We are well on the way to doing that. I suggest that, rather than trying to refight the referendum battle, which is exactly what the hon. Gentleman seems to be doing, he needs to get with the programme and to start talking about how he can be helpful.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend agree that no Government of any EU member state could possibly be expected to agree that we should have a good future trade and economic relationship with the European Union while, at the same time, we repudiate all our past financial obligations and somehow refuse to pay a fair share of the costs of agencies and so on that will be incurred in the future? Does she therefore agree that those who oppose paying any money presumably want a no-deal Brexit, which would be catastrophic for this country, and would stop the opportunity that my right hon. Friend the Secretary of State for Exiting the European Union has of negotiating a deal that retains as many benefits as possible for jobs, investment and the growth of this country’s economy?

[Elizabeth Truss]

As the Prime Minister laid out in her Florence speech, we do want to abide by the commitments we made during our period of membership, and we also want to see progress on securing a deal. My right hon. and learned Friend is right that any settlement that we seek to achieve has to be contingent on getting a suitable outcome from the negotiations, as has been outlined by the Prime Minister, because we want to ensure that any money spent is value for money for the British taxpayer.

Duties of Customs

Lord Clarke of Nottingham Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Tom Brake]

I entirely agree. Like other hon. Members, I am perplexed as to why the Government ruled out several obvious solutions to the dilemmas they face from the outset.

I am sure that a number of Members in the Chamber will have visited Northern Ireland. When I did so, which was about five weeks ago, one of the communities I visited was Forkhill in South Armagh, which was very badly affected during the troubles. A garrison of 3,000 soldiers in that town was responsible for the safety of approximately 24,000 people. The people of Forkhill reckon that when the garrison was there, it was the most militarised place in western Europe, and they are worried about returning to the troubles they experienced there in the ’70s, ’80s and so on. People were placing improvised explosive devices in culverts, under roads and on the approach roads to the border, and the residents of Forkhill are worried that there will be no means to control safely the 275 border points between Ireland and Northern Ireland. If the proposal is that part of the solution will be to conduct ad hoc checks at separate border points, or at some distance from the border, those people are worried that the British customs officer, the British police officer, or perhaps the British soldier will become a target.

All we have heard from a succession of Ministers is dismissive comments. The Secretary of State for Exiting the European Union dismisses any concerns expressed about the difficulties that could arise at the border. We need reassurances from Ministers, not the dismissive comments they are making.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

As far as I can gather, the Government’s policy is that they are definitely not going to have a hard border and they are definitely leaving the customs union. That could be very good for the community that the right hon. Gentleman visited, because smuggling was a very profitable source of income in the past for a large number of inhabitants on both sides of the Irish border. It seems to me that so long as the Government maintain their totally contradictory pose, smuggling will once more come back to the border in a big way.

[Tom Brake]

Indeed, and it might be a growth industry. When I was in Northern Ireland, the people who were taking me around pointed out a number of large homes and suggested that they might have been acquired through not entirely legitimate means. The Government might be reopening that way of doing business. We also know what has happened with regard to common agricultural policy payments, and with cattle or fuel being transferred from one side of the border to the other within a shed. That long-standing problem has the potential to become an even greater one, courtesy of what the Government propose.

Public Sector Pay Cap

Lord Clarke of Nottingham Excerpts

Wednesday 5th July 2017 Commons Chamber

[Mr Speaker]

During the rather fractious proceedings to date, one Member has been the embodiment of calm and serenity. That Member should be imitated by others, and will now be called to contribute—Mr Kenneth Clarke.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Those are not adjectives that have been applied to me throughout my political career, Mr Speaker, but I am grateful to you for that credit. May I congratulate my right hon. Friend the Chief Secretary to the Treasury on straightforwardly restating the Government’s sensible policy on this issue? It is necessary as part of our ensuring, in this post-Brexit world, that we keep the economy on track; that steady, sustainable growth continues; and that we steadily eliminate the problem of debt and deficit that we inherited.

Does my right hon. Friend agree that if she were to give way to this week’s lobbying on the subject it would be a political disaster, because the Government would be accused of a U-turn and a surrender? It would set off a wave of pay claims across the entire public sector, which the Opposition are obviously looking forward to taking part in if they can provoke them. It might also be an economic disaster, and it would not be in the interests of the many people in the public and private sectors who are having economic difficulties in these times, and who want to look forward to a much more prosperous future as we get our economy back to health.

[Elizabeth Truss]

My right hon. and learned Friend has a huge amount of experience in this area. He is correct to say that we need to take account of the sustainable, long-term financing of public services. We need to look at the specific issues in each sector where we need to recruit and retain staff, and we also need to look at fairness with the private sector. At the moment, public sector and private sector salaries are roughly comparable. As a country, we need to improve our productivity and our growth rate. That is the way to ensure that everybody benefits. The Government have a fantastic record when it comes to getting people into work, and unemployment is at its lowest level since 1975. We need to make sure that we continue with that.