Leaving the EU: Economic Impact of Proposed Deal

Debate between Lord Clarke of Nottingham and Mel Stride

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

I thank the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) for his vociferous oration, but vociferous orations are no substitute for the facts. Let me remind him of some of the facts in respect of the points he made. He says that we have made no analysis of the impact of these arrangements on the United Kingdom economy, and that is simply not the case. The information we have come forward with is a robust analysis of the future outcomes of the four different scenarios that we consider in that analysis. He levels the charge that we are in some way treating the United Kingdom with contempt, and that is certainly not the case. The House has been very deeply preoccupied with matters of Brexit and the nature of how we might exit the European Union, and the Prime Minister has set out that there will be further debate this time next week to be followed, in the event that we do not pass a meaningful vote, with another amendable motion to be considered by the House.

The right hon. Gentleman also says that the deal, as he terms it, would have a negative impact on the UK economy. The analysis clearly shows that, under every single scenario it analyses, it is better to have this deal than no deal or any of the alternatives. Finally, he decried the fact that we had not put forward a bespoke deal for analysis within our analysis, and that illustrates his lack of understanding of what the future political declaration is all about, which is a range of possible outcomes. That is entirely what the analysis models.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

It is perfectly obvious to all those involved in the negotiations, both the British negotiators and the EU negotiators, that if Britain were to leave the EU with no deal, it would be disastrous for the British economy in the medium to long term and extremely damaging to the economies of many EU countries, particularly those nearest the UK. Does the Minister accept that it is rather silly to think that it is useful in these negotiations to take up the simplistic view that we must pretend we are threatening to leave with no deal to improve our bargaining position? Will he reassure me that the negotiations are proceeding on the basis that both sides know that they do not want no deal and that they are therefore trying to limit the damaging consequences of risking that? What we should really pursue is retaining the benefits of the customs union and the single market and continued free trade with our largest customer in the world, as it will always be, as is being urged on us by every industrial leader in this country.

Leaving the EU: Economic Analysis

Debate between Lord Clarke of Nottingham and Mel Stride

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

Debate between Lord Clarke of Nottingham and Mel Stride

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

[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—

Leaving the EU: Customs

Debate between Lord Clarke of Nottingham and Mel Stride

Wednesday 16th May 2018 Commons Chamber

[Mel Stride]

The hon. Lady raises an important issue about the security of Northern Ireland, and the first point I would make is that we are absolutely crystal-clear that there will be no hard border between Northern Ireland and the Republic of Ireland for the very reasons she raises. On her specific question about potentially receiving what would be some very sensitive information, albeit redacted, that would be best taken up with the Secretary of State for Northern Ireland, rather than by me making any specific comment from the Dispatch Box.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Will my right hon. Friend confirm that it is still the Government’s firm commitment that there will be no new physical infrastructure on the Irish border and some degree of regulatory convergence if necessary and no customs border down the Irish sea, so this will presumably apply to Dover, Holyhead and everywhere else? Will he confirm that, whatever discussions are going on, quite rightly, in private within the Government, those commitments remain absolutely firm?

[Mel Stride]

My right hon. and learned Friend will know that the joint report issued in December after the phase 1 negotiations covers exactly the issues to which he refers, and of course the Government will entirely stand by and remain committed to the commitments they made in that statement. The Government have this morning committed to publishing a further White Paper before the June European Council. This will communicate our ambition for the UK’s future relationship with the EU in the context of our vision for the UK’s future role in the world.

We have always been clear that we will not provide a running commentary on the internal work being carried out in the Government on these highly sensitive and vital negotiations. We are focused on delivering on the referendum result in the national interest, and that means having a stable and secure policy-making process inside the Government. It would not therefore make sense, and would go against the national interest, to release information that could in any way undermine the UK’s position in our negotiations, a point the House has previously recognised. To provide details of the confidential discussions between Ministers regarding our negotiating strategy to those in the EU with whom we are negotiating would be a kind of madness that surely even the Labour party would find a stretch.

We have shown our willingness to share sensitive information with Parliament, but we will not do so to the detriment of our national interests. Let us see this motion for what it truly is. It is not a motion designed to assist our country at this critical time in our history, to secure our future outside the European Union or to help Parliament to fulfil its duty to our people. No, this is a motion about something rather less noble. It is a motion designed purely for the purposes of party politics and it should be seen for what it is. We should reject this motion today.

Question put.

Taxation (Cross-border Trade) Bill

Debate between Lord Clarke of Nottingham and Mel Stride

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.