Business of the House

Debate between Stephen Doughty and Chris Leslie

Monday 21st October 2019 Commons Chamber

[Mr Leslie]

The hon. Gentleman is quite correct, and I can hear the impatience of Ministers of the Crown bubbling over—not perhaps the Leader of the House, who does not often bubble over in that way. We are all fed up with this process, but we should not sweep under the carpet concerns about the legislation simply because Ministers of the Crown are impatient. This is our job. We are employed to do it, and we were elected by our constituents in 2017, long after the referendum in 2016, to scrutinise this legislation. [Interruption.]

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Madam Deputy Speaker, there is a lot of noise. The hon. Gentleman is making some strong points, but does he agree that there are many people in the House, on different sides, who want a deal to go through, or do not want a deal to go through, or want to amend things in different ways. There are varied views on Brexit, and they want to be able to table amendments, including to early parts of the Bill, in a proper way. I imagine that some members of the European Research Group might be unhappy with the first few clauses, which continue to assert the supremacy of EU law over UK law for the transition period. Other Members, including Opposition Members, who would like to see a deal voted through, would want to propose sensible amendments to improve the Bill so that they feel able to vote for it. I do not understand why the process is being rushed in this way.

[Mr Leslie]

The hon. Gentleman is correct. I am surprised that a Minister of the Crown did not propose the motion at the Dispatch Box—it was going to be nodded through had I not cleared my throat to let the Speaker know that I was worried about it when the Question was put. Perhaps the Leader of the House will reply to the debate. [Interruption.] I am glad he says that he will.

The hon. Gentleman was correct, because those first few clauses, which I understand will be debated tomorrow afternoon, if the programme motion succeeds, have many ramifications about which hon. Members are concerned. I point generally in the direction of where ERG members normally sit or lounge in various forms on the Government Benches. They are not here, and I gently suggest to the Leader of the House that in such exceptional circumstances—[Interruption.] Certainly not the hon. Member for Winchester (Steve Brine)—I would not say that he would ever be a member of the ERG; absolutely not, I know his views well. I wonder whether the Leader of the House, given the circumstances surrounding the motion, has taken exceptional steps to alert all hon. Members, perhaps with an email this evening saying that the clauses are likely to be debated and they will need to table amendments tonight if they are not to be starred amendments. Has he gone to any lengths to alert hon. Members to these unusual and, in my view, dangerous circumstances?

[Mr Leslie]

It is indeed very serious. In this modern era, people think, “Oh well, politicians make promises across the Chamber, and if they are ignored or not honoured, that is just the nature of political to-ing and fro-ing.” That is not good enough, and I know that in his heart, if the Leader of the House makes a commitment at the Dispatch Box to hon. Members that certain amendments will be considered and given credence by the Government, he will allow time for amendments to be tabled. I am not sure that the timetable proposed in the motion is fair for those hon. Members. All it will do is annoy them further and offend them, and it will not necessarily win their support for the legislation. I suspect that he is making a rod for his own back with the timetable.

[Stephen Doughty]

To give a practical illustration—it is important that Members in the Commons and the Lords understand what has happened this evening—I became aware of the situation only 20 or 30 minutes ago. I went to the Vote Office and asked to see the programme motion if it had been published. The Vote Office told me that it did not have a copy and that I could not see anything. It told me that I might be able to find one in the Table Office. Members have not even had a look at the timetable. The vast majority have no idea whether or not they can table amendments, but they need to do so in relation to these parts of the Bill.

[Mr Leslie]

That is an incredibly important point, and I am sure, Madam Deputy Speaker, that you will want to reflect, in what appears to be not just an emergency procedure that the Government have invoked but a quite unprecedented one, on whether the programme motion details are available in the Vote Office. I am not sure whether that is the case.

Leaving the EU: Central Counterparty Clearing

Debate between Stephen Doughty and Chris Leslie

Thursday 1st November 2018 Commons Chamber

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

The title of this debate may encourage hon. Members to flee the Chamber, but I encourage them to leave via the House of Commons Library, which can explain why central counterparty clearing services are so incredibly central to the infrastructure that underpins business, corporate finance and the nature of our economy, and why Brexit could potentially have a significant effect on such services.

To give a sense of scale, the British economy is worth about $4 trillion. LCH, one of the biggest central counterparty clearing services, is owned by the London stock exchange, and this year alone it has cleared $812 trillion-worth of derivative contracts—largely interest rate swaps. That is a mind-boggling sum of money, and I am raising this issue today because it is an internationally important liquidity pool. The UK specialises in this facility, but with the UK leaving the European Union, the jurisdiction in which these CCP operations take place could well be fragmented, which could have a destabilising effect on the operation of central counterparty clearing services.

The question is: if we crash out of the European Union, or if we do not get the right sort of regulatory framework, what will happen to those trillions of dollars’ worth of derivative contracts? This is one of the most significant cliff-edge issues in Brexit, and it has not had anywhere near enough attention or coverage.

By way of background, I will provide an example of what a CCP operation does and what it clears. Imagine a construction company that is getting a big loan from a bank to build a housing estate, or whatever. That loan is quite a big liability for the business, and often the loan will come with a variable interest rate. In order to manage the liability, the construction company might want to swap that variable interest rate for something a little more predictable, a little more stable—perhaps a fixed-rate interest arrangement. Such interest rate swaps are now a common or garden part of corporate business finance. If we are talking about stability in the economy, such products, though complicated, are often the wiring behind the scenes. They really are important to how we stabilise our economy.

In recent times, central counterparty clearing facilities have developed to make sure that companies do not necessarily have to make these arrangements bilaterally with one another, because they can clear them through a central fund that has an insurance buffer arrangement in case of default on such contracts. Companies such as LCH can go through a number of layers in order to cope with the default. We saw a recent default scenario in Norway, where an energy trader was overexposed and a CCP arrangement absorbed much of that default shock and prevented contagion that could have had wider ramifications around the world. This certainly operated in respect of Lehman Brothers and others in the financial crisis. Since then, policymakers worldwide have recognised that CCP is a really important pillar of our financial stability mechanisms. So these are important insurance policies and this is an international pool of liquidity, and London and the UK are right at the heart of those operations.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is drawing attention to an important set of issues of which I was not fully aware. He would probably agree that we cannot have an “It’ll be alright on the night” approach from the Government to such complex arrangements—we need surety on them. Was he interested, as I was, to see Commissioner Barnier talking earlier about how there had been misleading press reports about a deal on financial services and about many of these matters being close to being agreed, and saying that that was not the case?

[Mr Leslie]

My hon. Friend rightly takes us to the more contemporary story about what is happening with these, because Brexit has put everything in limbo. Will these CCP operations be able to continue to service the vast majority of euro-denominated interest rate swaps or derivative products? The European Union had been developing new supervisory arrangements that would have included the UK. Brexit came along and of course those have all now been put into abeyance because the UK may be taken out of those jurisdictions. Time has ticked on and we are now five months, perhaps less, away from the moment of change, yet we still do not have any certainty about what will happen. However, we have heard various rumours.

Last week, the Governor of the Bank of England, Mark Carney, highlighted £41 trillion-worth of outstanding contracts that could be forcibly voided—that could fall out of legal certainty—if we do not get some sort of arrangement put in place. Earlier in the week, EU Commissioner and Vice-President Valdis Dombrovskis indicated that the EU might allow the UK CCPs after Brexit to operate on a temporary basis, with some strict conditionality. Of course we saw the report in The Times today that perhaps in the negotiations there was some sort of sense in which UK financial services companies, including these CCPs, would be able to operate on an equivalence basis, which is not as good as the arrangements we have, where we are around the table and able to make the rules on regulations. We would be a rule taker, but of course we may be allowed access to European markets—and, potentially, vice versa. The danger with that is that it is precarious and it could be switched off at a moment’s notice if policymakers fell out, for whatever reason.

As my hon. Friend has pointed out, today Commissioner Barnier poured a big old dose of cold water all over that, saying, “You should not believe everything you read in the paper.” He reiterated that it was really in the hands of the EU to decide whether equivalence continued. This would not be an ideal situation at all, and the risk is that we would need to see CCP clearing services develop rapidly in other jurisdictions in Europe. Of course the Americans will have their arrangements, but that could start to undermine the centrality of the UK. That would be a great pity, because the UK has expertise and a relatively good regulatory approach, working with our European colleagues.

So the main question I want to put to the Minister is: what is the Government’s attitude to the future, long-term, stable, permanent regulation environment? Are we going to align ourselves closely or in harmony with the EU regulatory framework for central counterparty clearing arrangements? If that is the case, it would be useful to know that that is British Government policy at this stage, because that might then enable something to be built on equivalence. We could possibly move to a position in which the UK still has a say in the regulatory arrangements.

In my view, the public should be given a chance to think again about this whole thing and, if they want, there should be a people’s vote so that the option to remain is still viable. Nothing has been decided that should prevent that from happening. If we are to leave the European Union, it would not be a good thing to do so and put all these things up in the air. We should not fragment the financial safety regulatory arrangements and potentially put businesses, jobs and livelihoods at risk.

Taxation (Cross-border Trade) Bill

Debate between Stephen Doughty and Chris Leslie

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

[Mr Leslie]

Well, I will certainly want to vote against amendment 73, but my hon. Friends will make their own remarks in their own time. I do not know what their intentions are, as I have not had a chance to hear from them. Intuitively, I doubt very much that my hon. Friends, knowing what the hon. Member for North East Somerset (Mr Rees-Mogg) is up to, knowing where the members of the ERG come from on the political spectrum—the hard right Brexit perspective—and knowing how important the economy is to the future of this country, will abstain on amendment 73.

[Stephen Doughty]

It is very clear, as my hon. Friend says, who those Members are working with and what their agenda is. They are working with the likes of Nigel Farage and others who would like to see us crash out, so that they can deregulate the economy and change it into a Singapore-style tax haven on the edge of Europe where they can pursue their right-wing fantasies.

[Mr Leslie]

Yes, indeed.

It is helpful if we view the two Bills we are considering today and tomorrow as a piece, as they interrelate with one another. Many of the amendments tabled for the Trade Bill tomorrow on a customs union are also on today’s amendment paper. I say gently to the Government, “Nice try with your facilitated customs arrangement, but it is not going to fly for a number of different reasons.” I urge the Chancellor and the Minister to stop putting down red lines. They will only find that they come back and embarrass them when they have to accept a customs union.

Let me quickly go into detail on why a customs union really will have to apply in this situation. There may be Conservative Members who agree with me on this point. The facilitated customs arrangement may well apply if we have a free trade agreement with the EU, but only a customs union gets rid of what is known as the rules of origin requirements—the local content thresholds needed to prove whether an FTA is in place to qualify for preferential tariff arrangements. Under a customs union, we do not have to have rules of origin checks. That is a massive advantage of the customs union.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

3rd reading: House of Commons & Report stage: Second Day: House of Commons
Wednesday 17th January 2018 Commons Chamber

[Mr Leslie]

That is indeed the case, but the Prime Minister said, “Oh no, that’s a red line.” The difficulty is that Prime Ministers can get into stubborn positions. Are they going to have to back down? How do they deal with these things? It would be a measure of the Prime Minister’s status and stature were she to say, “On reflection, I have looked at this issue and it cannot be solved.” I know that the Under-Secretary of State for Exiting the European Union, the hon. Member for Fareham (Suella Fernandes), will be encouraging the Prime Minister to do that, because she has that way about her. The Prime Minister should change her mind and say, “Things have changed.”

[Stephen Doughty]

My hon. Friend is obviously making some absolutely excellent points, but the crucial thing is how all this matters practically for people and businesses. I wonder whether he saw yesterday’s concerning announcement about the opening of a new ferry route between Spain and the Republic of Ireland. The port of Cork expressly said that it was doing that to avoid having to come through all the Brexit uncertainty that was being created in the United Kingdom.

[Mr Leslie]

I did indeed see that. Think of all the distorting arrangements that will pop up.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Report stage: First Day: House of Commons
Tuesday 16th January 2018 Commons Chamber

[Mr Leslie]

My hon. Friend is absolutely right. That right of protection for freedoms and liberties on the grounds of sexual orientation is enshrined in the charter of fundamental rights. One of the examples given was civil partnerships where in the future pension rights might be divided but at the time when the partnerships took place certain UK laws were not in place; the charter provides protections against discrimination in a way that existing UK law does not.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making a strong point and I strongly support what he is saying and Labour Front-Bench amendment 4. I accept that many Conservative Members would strongly defend the rights in the charter and other provisions we have agreed to, but does my hon. Friend agree that the public have reason to be deeply suspicious, because they hear many Conservative Members talk about a race to the bottom in regulation, particularly in employment rights, and about wanting to scrap the Human Rights Act and pull us out of the European convention on human rights? That is why keeping such rights is so crucial.

[Mr Leslie]

That is right, and my hon. Friend will also remember that, before becoming Secretary of State, the right hon. Member for Haltemprice and Howden (Mr Davis) cited many of the rights in the charter in his own legal case against the then Home Secretary, who is now the Prime Minister. The right hon. Gentleman took a case against her and cited many of the provisions in the charter; how strange it is that he now introduces a Bill that does not necessarily carry forward those provisions.

--- Later in debate ---

[Mr Leslie]

We do have high animal welfare standards. I do not deny that there could always be improvements, but I want to retain what our constituents want, which is high standards. By leaving the European Union in this particular way, I worry that we will be forcing ourselves to chase after trade deals with other jurisdictions that have a totally different approach to regulation. The world effectively has three regulatory philosophies: the Chinese have a particular view of regulation; the European Union has a precautionary principle; and the Americans have a different cost-benefit analysis view of the world. If we depart from the precautionary principle ambit, that will affect agriculture, animal rights and many other issues. It would lead to wholly different and lower regulatory standards, which in some ways is the backdrop to this whole question.

[Stephen Doughty]

rose—

[Mr Leslie]

I will take one last intervention, but then I must conclude.

[Mr Leslie]

No, I have to conclude.

[Stephen Doughty]

I thank my hon. Friend for giving way; he is being very generous. Does he recognise that people are suspicious given that, for example, the new Under-Secretary of State for Exiting the European Union, the hon. Member for Fareham (Suella Fernandes), who has just joined us in the Chamber, said that the Government were right not to copy the charter of fundamental rights into UK law because lawyers will love the extra rights that it gives? That shows the real intention behind what some Ministers want, which is to bring down the rights that have protected so many people and workers, the environment, and safety.

[Mr Leslie]

I congratulate the hon. Member for Fareham (Suella Fernandes) on her appointment, but I am very much looking forward to her speech, which will perhaps wind up one of the sections of this debate, because Parliament will want to scrutinise her views, past and present. I will conclude with that because I have taken up more than half an hour and other Members will want to contribute.

Taxation (Cross-border Trade) Bill

Debate between Stephen Doughty and Chris Leslie

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

[Mr Leslie]

If only that were the case. In fact, that same point is raised in paragraph 9 on page 6 of the explanatory notes, which states:

“The Taxation…Bill does not presuppose any particular outcome from the UK’s negotiations with the EU.”

That is not true. The Government have absolutely presupposed that the customs union is off the table. It is the ultimate presupposition, if ever anyone wanted a definition. This Bill apparently does not allow us to stay in the customs union, but it should allow us to do so, because I happen to believe that there is a majority in this House of Commons for membership of the customs union. I have a little job of work to do to continue to persuade my own party’s Front Benchers of that particular point, but I will try my best to do so because I think they will eventually recognise that being part of the customs union is incredibly important for our economy not just in the transition period, but for the longer term. I believe that the numbers are here in the House of Commons to support that and that it will eventually be proven.

I am disappointed that the Government have tried to twist parliamentary procedure by deeming this measure to be a money Bill. It is Mr Speaker who will decide whether or not it is a money Bill, and I think he will do so at the end of this particular Commons procedure. The Government, though, in a slightly tricksy way, are putting through the Bill following a Ways and Means resolution. Why have they done that? They have gutted the Trade Bill and stuck everything they possibly can into what was the customs Bill so that it cannot be amended by the House of Lords. It is the most obvious trick in the book—rule 101 for a Minister. I have been around the block a number of times, and I have to tell the Minister that there are whole clauses in the Bill, such as clause 31, that are about the formation of a customs union. How is that a matter purely for a money Bill? It is absolutely an issue of public policy to do with our trading alliances that the other place should have every right to pass comment on. If it has advice and suggestions for this place, it should be allowed to amend the Bill.

[Stephen Doughty]

I completely agree with my hon. Friend’s point. Is it not underlined by the fact that the Government’s programme motion neglects to state how many days’ scrutiny the Bill will receive in the Public Bill Committee, let alone on the Floor of the House, but does state that the Committee will be done by 1 February? If the Committee does not start for a week or a couple of weeks because the Finance Bill and other measures are going through, there will be an extraordinarily small amount of time for detailed scrutiny of a 56-clause Bill with numerous schedules that will potentially have serious impacts on our economy.

[Mr Leslie]

That is why I suspect that the other place will look at the truncated scrutiny. I tried to get this out of the Minister earlier—not the Minister before us, but the Financial Secretary to the Treasury. It was not a Cabinet Minister who came to the Chamber to introduce the Bill, by the way, but I am told that a reshuffle might be going on, so perhaps the Chief Secretary or even the Chancellor are in negotiations. The junior Minister acquitted himself reasonably well at the outset—as well as he possibly could, given the line that was scripted for him to take—but I think that a Cabinet Minister should have presented a Bill of such scale and importance. It deserves proper scrutiny in this place, with the right number of Committee sittings, because otherwise the other place will have to do that job for us.

--- Later in debate ---

[Mr Leslie]

Of course, that is an unamendable procedure. I think that, at the very least, the Government will be pushed by the other place into a super-affirmative procedure whereby the Commons has a Committee that looks at the details and suggests amendments and changes. Ministers may then plough ahead if they want, but a super-affirmative procedure would mirror more the powers of MEPs in these matters. A simple aye or nay would be a dilution of the scrutiny powers that we currently have democratically via elected Members of the European Parliament.

I want to focus on part 3 of the Bill. In the past couple of days, a lot of attention has been given to the number of firms that do business across the European Union. They think of their trade not as imports and exports, but as arrivals and dispatches. Whether they are buying components from Birmingham or Bristol or from Brussels or Berlin, they treat them all the same for customs and excise and VAT purposes. That will potentially not be the case under the Bill.

Even if we stayed in the single market and the customs union, we would not necessarily be in the EU VAT area, which is outwith the customs union. That is another decision that Ministers will have to face up to and take. I would like the Bill to be amended so that we stay in the EU VAT area or, at the very least, have a proper impact assessment of the implications of leaving it. That is the position of the British Retail Consortium, which argues that leaving it would mean a potential bureaucratic burden for businesses that currently, if they are importing goods from EU member states, can treat the acquisition VAT through the normal quarterly lodgings of their VAT returns. Henceforth, those firms will potentially have to pay VAT up front—it is known as import VAT—at the point of entry, so at the border, at the port, at Dover, at the channel tunnel or wherever it comes in, each time there is that level of transaction. To look at it in the round, the customer would pay the same amount of VAT at the end point, but it would be incredibly disruptive to the cash flow of those firms.

I looked online and at the explanatory notes, thinking that there must be a regulatory impact assessment of that situation, because the Bill abolishes acquisition VAT and introduces import VAT on goods, including those from the European Union. There does not seem to be a particularly rigorous impact assessment. I do not know whether I have missed it. There was one for the Trade Remedies Authority, but there does not seem to be one for the import VAT proposals. There ought to be an impact assessment, because that is Cabinet Office best practice, but I cannot seem to find it.

Again, I do not think voters were necessarily tuned into the implications on the EU VAT area when they cast their votes on the ballot paper. I may be criticised again for saying this, but I did not see the EU VAT area on the ballot paper. Perhaps I was not looking closely enough. Perhaps Government Members will help me out and point to where it was.

Currently, 140,000 British companies have to go through the rigmarole of registration and compliance when importing from outside the EU. A further 132,000 firms that do not trade beyond the EU but source their imports and components from within the EU will potentially be added to that. Knocking on for 300,000 businesses will be hit by this. According to HMRC’s own statistics, the number of transactions that are hit by customs duties and, therefore, potentially by import VAT will go from 55 million trades to 255 million trades a year, with all the paperwork and rigmarole associated with that level of bureaucracy.

[Stephen Doughty]

My hon. Friend is making incredibly important points about the practical implications of the Bill and the proposed changes. Was he not concerned, therefore, that the Financial Secretary refused to confirm whether any additional customs officers were being proposed or were in training? In fact, he seemed to suggest that they would be reallocated from other roles within HMRC or the Home Office. Given the scale of the additional bureaucracy that is being proposed, is that not deeply worrying?

[Mr Leslie]

We will have to hear from Ministers how they propose to deal with the extra 200 million trades going through the new system. I hope to read more in the impact assessment. If the Government can cope with, or have proposals to ameliorate, some of that administrative burden, we would like to see it in the impact assessment.

On top of that, my hon. Friend should know that, as I think was mentioned earlier, HMRC currently has a computer system or IT software called CHIEF. What does it stand for? I will not try to deal with the acronym—oh no, I can; you will be glad to know, Madam Deputy Speaker, that it stands for “customs handling of import and export freight”. CHIEF will be retired in January 2019—keep that date in mind, as it is crucial in the transition. We are moving to a new system called the customs declaration service. It is costing £157 million to implement and is potentially great news, but all these 130,000 new traders will suddenly be brought into this new system, and they will need to be given time, leeway and flexibility to get used to a system that they currently do not have to operate. I want to hear from the Minister what approach the Government will take to gradually phase in the new system while bringing so many extra businesses into that procedure.

[Mr Leslie]

That is not quite the impression I am getting from the business community. Trade bodies, such the British Retail Consortium and others I have mentioned already, are voicing their concerns, but many businesses are also waiting to see if there is any clarity on the details of how this will pan out. The warm words about phase 1 agreements—“We can sort these things out”, “Don’t worry, it will all be fine”—will only butter so many parsnips. Ultimately, businesses want to know how it will affect their bottom line, how they will cope, what sort of new systems they will need to put in place, what sort of employees they will have to bring in, and so on.

[Stephen Doughty]

I am afraid I disagree with the hon. Member for Strangford (Jim Shannon). He and I get on very well, but I am not hearing the same thing. The Freight Transport Association has made very clear the consequences of even marginal delays to customs procedures, such as those caused by the introduction of a new IT system and the additional time spent processing declarations. It has said that the addition of an average of two minutes to customs processing would result in a 17-mile queue from Dover back to Ashford; four minutes takes the queue back to Maidstone; six minutes back to the M25; eight minutes, and we are at the Dartford crossing and Essex. We could not have a clearer illustration of the types of problems that could be caused. These are substantial changes and, even with the best will in the world, they will have substantial impacts on trade.

[Mr Leslie]

That is why we should not just rush the Bill through as though it were a minor, technical copy-and-paste exercise. These are fundamental decisions we are having to grapple with, both in this House of Commons and in the other place, and it is not appropriate that it be deemed a money Bill. Yes, aspects are to do with taxation, but others are not and broaden out into trade and other areas. The Government might think they can deal with this tactically in that way but I do not think it appropriate.

I encourage my Front-Bench team, and all hon. Members, to support remaining in the customs union. I give notice to my Front-Bench team in particular. I asked the shadow Chief Secretary to the Treasury about the Labour party’s policy on the EU VAT area, a specific area of policy we need to get to grips with. The Bill should be amended so that we retain our involvement and participation in the EU VAT area, as that is the clearest, simplest way of retaining the current benefits. I am sure that amendments will come along on this issue, and when they do, I hope that all hon. Members will think carefully about what to do.

As for this evening, I worry that this VAT issue is yet another potential horror story in the Brexit saga. We pull at one thread and yet more issues start to tumble down on top of our constituents and the business community. It is not right to facilitate duties being put on trade with our nearest neighbours and closest economic allies across the EU, and that is why I hope that we will oppose the Bill this evening.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Mr Leslie]

That is getting us into this question about experts again and whether there is such a thing as a fact or whether everything in this world is an opinion. It is important to make sure that if there are facts and if we can prove cause and effect—for example, if we know that the introduction of inspections or a hard border is going to slow down lorries going through a particular port—we can, QED, prove that there is going to be a particular consequence for the economy. That sort of analysis ought to be shared with the wider world.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

rose—

[Mr Leslie]

I did say I was trying to finish, but my hon. Friend tempts me.

[Stephen Doughty]

I wanted to give my hon. Friend an example before he concludes. Last week, the Prime Minister claimed that the UK would make “significant savings” as a result of our leaving the EU, but I have asked questions and Treasury Ministers have not been able to explain what those savings will be or to put a figure on them. Yet Financial Times analysis suggests that we will lose £350 million per week, which contrasts with what was on the side of that red bus.

[Mr Leslie]

That is right. That Financial Times analysis was worth sharing and should be shared, but we should not rely on journalism alone to do the job. We have a professional civil service; let us not gag it or try to lock it under the stairs somewhere. We should let that expertise come out so that we can all see and hear it.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Committee: 7th sitting: House of Commons
Wednesday 13th December 2017 Commons Chamber

[Mr Leslie]

I will believe the Government if they publish the assessments, and I am prepared to make an appointment to go to a private reading room in the ex-Treasury building if needs be, but this must be a bit more than an analysis of how many treaties there are: it must be an assessment of their impact and importance.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an important point. Of course, I support his new clause.

I have long been in favour of the arms trade treaty, parts of which fall within EU competence. The EU as a whole was involved in the negotiations on the treaty, and we are a party to it as an individual country. We also have the consolidated EU and national arms export licensing criteria as well as domestic legislation. The arms trade is one of the issues that cut across many different areas of competence, and we are party to a number of treaties relating to it. Is that not exactly the sort of issue that should be examined?

[Mr Leslie]

It is, and I think it is particularly incumbent on those who advocated Britain’s exit from the EU to tell us what their plan was. How were they going to solve that problem? It should not be entirely incumbent on the myriad Conservative Members who were fighting for Britain to leave the EU only to disappear when the really tough job came along of deciding how we were to pick up the pieces and ensure that the treaties could continue in some way, shape or form.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Committee: 6th sitting: House of Commons
Tuesday 12th December 2017 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend mentions the single market; I wonder whether he noted the research published today by the Rand Corporation in the United States that made it clear that any kind of fantasy deal with the United States while President Trump is in charge would do nothing for us compared with remaining in the single market and the customs union.

[Mr Leslie]

Yes; I think many hon. Members are under the illusion that free-trade agreements are an okay substitute for the single market arrangements that we now have. Our economy is 80% service sector. We take for granted the frictionless movement of goods, parts and components, and amendment 124 would—

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Committee: 5th sitting: House of Commons
Wednesday 6th December 2017 Commons Chamber

[Mr Leslie]

It is worth listing the promises that were made to the British public in the run-up to the referendum, not just by Vote Leave but by individual Members of Parliament, including the Environment Secretary and the Foreign Secretary. On 22 June 2016 they wrote, on behalf of Vote Leave:

“We will take back control of our money”.

The International Trade Secretary said:

“Instead of handing over £350m a week to Brussels we should be spending that money on local priorities”,

such as the NHS.

I am delighted to see that the right hon. Member for Wokingham (John Redwood) is present. He is very assiduous when it comes to these issues: I will grant him that. Before the referendum, he asked “How should we spend this Brexit bonus?” It was suggested that riches would be available for our vital public services. Those were the promises that were made to the British public.

[Stephen Doughty]

Is it not all the more extraordinary that we are told not only that we will have to pay tens of billions as a divorce bill, but that the Chancellor has already put aside £3 billion—on top of the £750 million that has already been spent—just to cope with the costs of preparing for a potential no-deal Brexit?

[Mr Leslie]

We saw that £3.7 billion of supposed Brexit preparations in the Treasury Red Book at the time of the Budget, but I suspect that it is quite a modest sum. I know that there are former Chancellors of the Exchequer and others who have more experience than I do in this regard, but I think that those sums may have been set aside for a softer Brexit. If we ended up with a cliff edge with people saying, “We don’t need even a free trade agreement; we can cope on our own in a WTO scenario”, those Brexit preparation costs could be significantly higher.

--- Later in debate ---

[Mr Leslie]

And we have not left the EU left. The hon. Gentleman makes the point that in any election or referendum campaign there are of course claims and counter-claims, but the success of the leave campaign has caused the situation we are now in, compounded by the choices made subsequently—the interpretations that were not on the ballot paper about sweeping away the single market and the customs union. These have led not to my assessment of what will happen to tax revenues, but to the hon. Gentleman’s own Chancellor of the Exchequer’s assessment. We can talk about our expectations during the campaign, but the hon. Gentleman must acknowledge that the public feel that a result was reached during the course of that referendum and they will look to those who advocated leave and think of the promises made at the time, and expect them to be fulfilled.

[Stephen Doughty]

We rightly debate all the figures, including the infamous £350 million on the side of the bus, but do we not also need to look at the real impact on the ground? The fact is that we are now having to recruit new customs and border officials to deal with the potential consequences of Brexit instead of spending Home Office budgets on new police officers.

[Mr Leslie]

Yes, there is a sense that the nation should be talking about how to tackle the massive challenges that we face—questions of productivity, of opportunities for young people and of the kind of healthcare improvements we can expect in the 21st century—but they have now been put on the back burner while we try to negotiate an inferior free trade arrangement to the one that we currently have. This is a kind of salvage operation.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Leslie

Committee: 1st sitting: House of Commons
Tuesday 14th November 2017 Commons Chamber

[Mr Leslie]

I suspect that that is because the Government are struggling to get such a transition. They have admitted that one is necessary, which is a good step. In her Florence speech, the Prime Minister made that concession. In fact, it is probably the biggest single negotiating input that we have seen from the Government since the triggering of article 50.

I have been talking to businesses and I know many hon. Members have done so, and we are hearing that if they do not have some clarity by January or February, they will have no choice but to put in place contingency plans for a no deal and the fabled cliff edge that we would reach at the end of March 2019. This goes beyond the financial services issues, because it applies to a number of sectors of the economy. We need to make sure that we have some certainty. That is why so much is on the shoulders of the Prime Minister in the December European Council meeting, when we are told that we might get some movement from the European Union on this issue.

[Stephen Doughty]

My hon. Friend is making an excellent point about the transition. A whole series of amendments have been tabled on this issue, and I wholeheartedly support his new clause. Are the businesses he has spoken to not already having to make very difficult and costly hedging decisions because of the uncertainty caused by the Government and, indeed, the siren call from the small number who want us to go off the cliff into a catastrophic, no deal Brexit?

[Mr Leslie]

There is a sort of sadism or masochism— I do not know which it is—on the part of a small number of hon. Members who relish the idea of a no deal scenario, saying, “The WTO has a fantastic set of rules —let’s just dive straight in.” However, I think there is consensus in the House that a transition is necessary, and if that is the case, we must work together across the parties to make sure we put in place the right legislative framework to deliver and facilitate such a transition.

The Prime Minister pointed out after her Florence speech that the European Court of Justice will

“still govern the rules we are part of”

during a transition. The Prime Minister is right. The European Union has said in terms that the entirety of the acquis communautaire needs to apply during a transitional period and that it is the equivalent of the single market, the customs union and the four pillars—the freedoms—within them. That has to include the European Court of Justice, if we are going to sign up to that set of arrangements. That is also the Labour Front Benchers’ policy for the transitional period. Indeed, they will want to speak to their own amendments detailing how they envisage the transition needs to take place.

It is worth reminding ourselves why it is that, during a transition, we will still need a resolution mechanism through the European Court of Justice. The right hon. and learned Member for Rushcliffe (Mr Clarke) mentioned in an earlier intervention that the UK took the European Central Bank to the European Court when there was a question whether the euro clearing arrangements might not be feasible in the City of London. From time to time, therefore, we have benefited from that dispute resolution arrangement.

What would happen if other circumstances arose during a transition? For instance, if UK citizens living abroad wanted to get their pension payments but there was an obstacle to them doing so, they would need to be able to seek redress, and that could be provided by the European Court. If a breach of competition rules adversely affected a UK firm, it might seek to get redress through the European Court of Justice. If the European Union started passing rules in conflict with the transition agreement, we would want the Court to resolve the situation in our favour. If UK firms were denied market access in the European Union, we would need resolution arrangements during a transition period. The application of the European Court of Justice is integral to such issues—the Prime Minister was right to accept that—but the Bill presents a problem.