Duty on Shopping: UK Entry Points

William Cash Excerpts

Wednesday 6th September 2023 Commons Chamber

[Henry Smith]

The hon. Lady is exactly right; I have experienced similar when travelling to Australia or closer countries such as Switzerland. The boost that that gives to those local economies is quite significant.

In this country, however, we need to act quickly. Such a plan for arrivals duty-free is under active consideration by the European Commission as part of the directorate-general for taxation and customs union’s review into travel and tourism taxation. Introducing arrivals duty-free is the only way we would be able to level the field.

The third benefit is greater choice and passenger convenience. The modern passenger has come to expect the retail element of the travel experience. Duty-free purchases on arrival will contribute to a more seamless travelling experience. Arrivals shops are a separate market in competition with departure duty-free sales from airports abroad. The lack of arrivals duty-free is placing us at a competitive disadvantage.

Arrivals duty-free is not only convenient, but popular too: polling commissioned in 2022 found 45% of travellers regard carrying duty-free items back to the UK on their flight as an inconvenience. Polling conducted at several UK airports last year found that in many areas, including my own Gatwick airport, two thirds of people would support the Government introducing such stores.

Nevertheless, I am aware that there remain concerns among those on the Treasury Bench, and I am keen to address them. The first concern from His Majesty’s Treasury, I suspect, is the revenue implications for the Exchequer. Research from York Aviation predicts that such stores will result in additional sales of £100 million each year. An increased spend of between 20% and 30% per passenger is also anticipated. I therefore ask the Government to again look at the example of Norway, where, as of 2019, duty-free on arrival sales have increased by 108% since the policy’s implementation, and are growing consistently at an average rate of more than 10% each year.

In this scenario, the initial loss of excise duties for HM Treasury is quickly offset by other forms of taxation, in addition to new jobs. At Zurich airport, for example, the introduction of a single arrivals duty-free store meant an additional 50 jobs. For the UK, the increase in income tax and corporation tax is estimated to be an additional £50 million each year for the Exchequer. Even at the lowest levels of predicted sales, the impact on Government revenues is still likely to be only cost-neutral at worst. The policy would also increase sales on duty-paid categories.

The second concern that I suspect the Treasury has is about the impact on the domestic high street. Although I appreciate that concern, we need to be clear that the only competition to arrivals duty-free stores is from overseas departure duty-free stores. The introduction of the policy has the support of many brands that sell in the domestic market both on the high street and in travel retail channels. The size of the inbound duty-free market is less than 2.2% of the domestic market for the same products. Even if the policy were more successful than expected, any impact on the high street would be nominal. Passengers at an airport are drawn from a far wider catchment area than those in town centre stores, for example. To look again at examples from elsewhere, Switzerland and Norway have both had arrivals stores for over a decade, and neither has detected any impact on high street sales.

The third concern that I suspect the Treasury may have is about implementation. Let us be clear: in the model of arrivals duty-free stores proposed by the industry, arrivals stores would be located before customs clearance. That would avoid any additional staffing or resourcing pressures, and could provide a more robust level of control and oversight. Border Force and His Majesty’s Revenue and Customs would have the opportunity to observe and audit purchases using existing mechanisms, as they do now, and monitor inbound duty-free allowance limits. As a result of Brexit, only secondary legislation will be needed for implementation, so the change would not be burdensome on the busy schedule and agenda of this House.

Let me reiterate my support for sustainable aviation fuel more broadly, and for the wider aim of the aviation sector reaching jet zero—the commitment that UK domestic aviation will achieve net zero carbon emissions by 2040.

[Sir William Cash (Stone) (Con)]

Will my hon. Friend give way?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. No. The hon. Gentleman has only just come into the Chamber. This is an Adjournment debate, and he should have been here from the beginning to intervene, as he knows.

Draft Postal Packets (Miscellaneous Amendments) Regulations 2023

William Cash Excerpts

Monday 17th July 2023 General Committees

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Further to that point of order, Mr Pritchard. I have two quick points.

First, I understand that the knife on the Illegal Migration Bill will fall at 6.26 pm. If you were a cynic, you would believe that the Government deliberately timed this debate for this evening, knowing that it would be ripped up by all those votes, bearing in mind we had 18 votes on the Bill last week. If you are a cynic, it is perfectly obvious to see what the Government have done; they have timed the debate now so it will be interrupted by the votes. However, can you confirm, Mr Pritchard, that if these proceedings are interrupted, there will be injury time so the debate will begin again quite a long while later, after the votes have taken place?

Secondly, for the record, the Committee of Selection nominated Members to this SI Committee last week in the normal way, including my hon. Friends the Members for Windsor, for Rochford and Southend East, for Devizes, for Dudley North and for Don Valley. I understand that some or all of those people indicated to the Whips in conversations over the weekend that they had what theologians might call “doubts” about the Government’s approach. Some even threatened to vote against the legislation, whereupon they were summarily removed from the Committee by the Whips, using a procedure that is normally used only for last-minute substitutions and very special circumstances—for instance, if a family member is ill.

In 22 years in this House, I have never known the Whips, from either side, to do this. This is beyond sixth-form politics. This is manipulating the parliamentary process because the Windsor framework is clearly a failure, and it is such a failure that the Whips have to rig Committees to get it through, so they have found a bunch of other Members, at short notice, who perhaps, shall we say, are not quite as inquisitive as the five who were nobbled. You have been here a long while, Mr Pritchard; have you, in your time in this House, ever known anything quite as shameful as this?

[Sir William Cash (Stone) (Con)]

Further to that point of order, Mr Pritchard, I thoroughly endorse what my hon. Friend the Member for Rochford and Southend East and my right hon. Friend the Member for Rayleigh and Wickford have said. I have been here nearly 40 years, and I have never seen anything like this. I really do deeply resent the fact that this has been done in the manner in which it has been done. Already, comments are being made on the Floor of the House, which are part of the record, and it is an extraordinary situation. I have never seen anything like it and I think that it is outrageous.

--- Later in debate ---

[The Chair]

I am grateful for that point of order, and I can say to you that the Clerk very ably read out why we are here. We are definitely going to move on to it as some point.

[Sir William Cash]

On a point of order, Mr Pritchard. So many of our arrangements are exercised by virtue of conventions. The question of what the precision of a particular rule is has to be weighed against the conventions, against which the debate is being conducted on this occasion. As my right hon. Friend the Member for Rayleigh and Wickford and my hon. Friend the Member for Rochford and Southend East made clear, the bottom line is that there are occasions when the conventions are bypassed for good reasons. But under the precept that convention is about the reason for the rule, I can say only that this is a gross breach of the convention, because it is perfectly apparent that the reason for making the changes that have been made in this Committee has nothing to do with the question of whether the people who are being substituted on the Committee were there in the first place. It is precisely because it is quite clear that the Government would lose the vote in Committee—that is where the problem lies. That is the constitutional problem with which you and we are faced, Mr Pritchard.

[The Chair]

On the point about convention, the hon. Gentleman is absolutely right, but he will know, probably more than anybody else on the Committee, that this House, apart from “Erskine May”—parallel to that—runs very much on convention. I refer him to the most recent ruling on such an occurrence happening, which was from Mr Speaker in the main Chamber this afternoon. That is the very latest ruling from the Speaker, drawing on convention. I am just a minor Member of the Panel of Chairs: the hon. Gentleman would not expect me to take a different view from that of Mr Speaker, given all the advice he received.

--- Later in debate ---

[The Chair]

I am grateful for that point of order, which comes from possibly the master of civility himself. He will recognise that my right hon. Friend the Member for Rayleigh and Wickford has put the record straight, even if he did not have to in the opinion of my right hon. Friend the Member for North East Somerset, and I am grateful for his doing so.

[Sir William Cash]

On a point of information as well as a point of order, Mr Pritchard. If I heard you correctly, I think you said that the decision was taken by the Committee of Selection. I do not think that is necessarily the case, but I would be grateful to know whether the changes were made by the Committee of Selection or by other persons.

[The Chair]

No, I said that the Committee sets its own rules. I was not referring specifically to whether the Committee of Selection was involved in any of the changes. I refer the hon. Gentlemen to the reply I gave some moments ago on convention—whether it is popular or not, it is convention. If the House wants to change the rules, the House and hon. and right hon. Members in this place might want to raise it elsewhere. If they want to raise this debate more comprehensively over a wider expanse of time, they can do so, as I set out earlier.

Finance Bill

William Cash Excerpts

2nd reading
Monday 28th November 2022 Commons Chamber

[The Exchequer Secretary to the Treasury (James Cartlidge)]

I beg to move, That the Bill be now read a Second time.

In the face of challenging global headwinds, my right hon. Friend the Chancellor of the Exchequer delivered an autumn statement that was honest about the difficult decisions this Government will need to take to tackle the cost of living crisis and rebuild our economy. We are not alone in dealing with economic problems. One third of the global economy is forecast to be in recession this year or next. At the same time, while inflation is high in the United Kingdom, it is notably higher in Germany, at 11.6%, in Italy, at 12.6%, and in the Netherlands, at 16.8%.

It is our duty to curb rising prices, restore faith in our country’s economic credibility internationally and, ultimately, to deliver growth. The independent Bank of England is responsible for controlling inflation. However, as the Chancellor set out in the autumn statement, monetary and fiscal policy need to move in lockstep. That means, for the latter, taking a disciplined approach and giving the world confidence in our ability to pay our debts. We have been clear that we will be following two broad principles in this consolidation: first, we ask those with more to contribute more; and, secondly, we will avoid the tax rises that most damage growth. With just under half of the £55 billion consolidation coming from tax and just over half from spending, the autumn statement set out a balanced plan for stability.

Today, we are debating a small number of the tax measures that were announced last week. In order to provide certainty to markets and help stabilise the public finances, we are taking forward important tax measures in this focused autumn Finance Bill, ahead of a fuller spring Finance Bill, which will follow the Budget early next year as usual.

[Sir William Cash (Stone) (Con)]

During the autumn statement, I raised the point about High Speed 2 with the Chancellor, and I also wrote to the Chief Secretary to the Treasury and, indeed, to the Chair of the Treasury Committee, my hon. Friend the Member for West Worcestershire (Harriett Baldwin). According to the Office for National Statistics yesterday, annual inflation in the infrastructure sector was 18.1% in September, which is 80% higher than the consumer prices index for the same month. How can the Government continue to bankroll phase 2 of the HS2 project at a cost of more than £40 billion when all the independent advice suggests that it will make rail services to the north-west worse than could be achieved with merely phase 1 and the Handsacre link? Could I also have a reply from the Chief Secretary to the letter I wrote to him?

Autumn Statement

William Cash Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

I have been pretty straightforward about saying that there were mistakes in the mini-Budget, and within three weeks we reversed them. Long-term gilt yields, which are the thing that really drive the cost of borrowing for the country, are down to the levels they were at before the mini-Budget, and to try to say that all the problems we face now are a result of decisions that were reversed in three weeks does not stand any scrutiny at all.

[Sir William Cash (Stone) (Con)]

My right hon. Friend argued for sound money and sound foundations. Would he be good enough to explain how it is that High Speed 2 will continue beyond Birmingham at a verifiable cost of at least £40 billion, when every independent report on HS2 condemns the project and confirms that phase 2 will make rail services to all west coast destinations north of Birmingham much worse? I ask him to make a clear commitment to keep this matter under review at all costs; it is in the national interest.

[Jeremy Hunt]

My hon. Friend is right that the increases in the budget for HS2 are disappointing, but a strong economy needs to have consistency of purpose, and that means saying we will make sure that we are a better connected country. The lack of those connections is one of the fundamental reasons for the differences in wealth between north and south, which we are so committed to addressing. There is a bigger issue about the way that we do infrastructure projects: it takes too long, and the budgets therefore get out of control. We are just not very good at it, and we have to sort it out.

Prime Minister’s Chief of Staff Appointment

William Cash Excerpts

Monday 7th February 2022 Commons Chamber

[Sir William Cash (Stone) (Con)]

Does my right hon. and learned Friend agree that nobody is better qualified to be both chief of staff and Chancellor of the Duchy and Lancaster and Minister for the Cabinet Office than my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), given that he already has the widest possible experience of interdepartmental responsibility, for the Treasury, for health, for financial services and for Brexit, and has the comprehensive knowledge and capacity both to understand and to have the necessary authority and stature to carry out the new functions allocated to him?

[Michael Ellis]

My hon. Friend is absolutely right, as usual. One could hardly have a more qualified person to be chief of staff than my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), a former Secretary of State answerable to this House, and now Chancellor of the Duchy of Lancaster, an elected person answerable to this House as well as the electorate.

Northern Ireland Protocol: EU Negotiations

William Cash Excerpts

Thursday 18th November 2021 Commons Chamber

[Michael Ellis]

With regard to the latest on the UK-EU relationship, my noble Friend Lord Frost and Vice-President Šefčovič met in London on 12 November to consider the state of play in discussions relating to the Northern Ireland protocol. Lord Frost noted that there remain significant gaps to be bridged between the UK and EU positions. He noted that it remained the United Kingdom’s preference to find a consensual way forward, but I must say that article 16 safeguards were and are a legitimate part of the protocol’s provisions.

The noble Lord Frost also underlined the need to address the full range of issues that the United Kingdom had identified in the course of discussions if a comprehensive and durable solution was to be found that supported the Belfast/Good Friday agreement. That is in the best interests of Northern Ireland. In that context, although talks had so far been conducted in a constructive spirit, Lord Frost underlined that, to make progress, it was important to bring “new energy and impetus” to discussions. Accordingly, intensified talks are taking place this week between teams in Brussels on all issues, giving particular attention to medicines and customs issues.

This week, Lord Frost has also been in Belfast, talking to political, business and civil society leaders and will meet with Vice-President Šefčovič at the end of the week to consider progress. I will continue to keep Parliament informed.

[Sir William Cash (Stone) (Con)]

With respect to the right hon. Member for Orkney and Shetland (Mr Carmichael), who raised the urgent question, perhaps he does not know that, in line with what the Paymaster General was saying, Lord Frost appeared before the European Scrutiny Committee only a few weeks ago. We asked him questions about article 16 and the European Court of Justice and he answered them with great clarity.

It is quite clear that the EU has been intransigent. For example, it invoked article 16 with regard to the covid laws that it introduced some time ago, and disruption of trade has taken place. Regarding the European Court of Justice, we are more than entitled to ensure that we are not governed by it given the repeal in the European Union (Withdrawal Agreement) Act 2020.

Health and Social Care Levy Bill

William Cash Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[Jesse Norman]

That is a helpful suggestion. I do not think there will be any ambiguity in the language on the slip, but of course it might not be clear that it is not the totality of the funding that goes through Government. If I may, I will take what my right hon. Friend has said as a suggestion and refer it to colleagues.

[Sir William Cash (Stone) (Con)]

I would like to ask the Minister, as he has such responsibilities across the board, whether he has contemplated the question of public waste in the context of, for example, HS2? If we were to cut that back and to cut back waste generally throughout Government, would that not send an enormously powerful message to the British people that we are not only concentrating on this aspect of public expenditure but balancing it off by making real savings in other areas, given that the Treasury or its economic advisers have said that they have put phase 2a of the HS2 legislation on red watch because it is so impossible to achieve its objectives?

[Jesse Norman]

My hon. Friend has successfully dragooned a topic that has nothing to do with national insurance contributions or the levy into the debate, but let me reassure him that the Treasury seeks to exercise a hawk-like vigilance over all public spending. I do not think it would be appropriate to think of the response to the pandemic of the past two years as characteristic of the Treasury’s overall largesse, and we look very closely at the spending on HS2, which is the specific responsibility of my right hon. Friend the Chief Secretary to the Treasury and one that I know he takes with great seriousness.

Northern Ireland Protocol

William Cash Excerpts

Thursday 15th July 2021 Commons Chamber

[Sir William Cash (Stone) (Con) [V]]

The United Kingdom left the EU lawfully and democratically under our own constitutional arrangements by sovereign Acts of Parliament, including a referendum, all based on our fundamental internal domestic law of sovereignty under our own unwritten constitution. The EU has always known that.

We left the EU and the European Communities Act 1972, in the light of previous centuries of democratic self-government and contribution to European peace, because of long-standing concerns about European integration, undemocratic majority voting for law making behind closed doors without even a transcript, EU regulations incompatible with our desire for competitive global trading, and awareness that there has never been a level playing field.

Our sovereign Acts of Parliament are Acts of the United Kingdom, including Northern Ireland. They cover trading co-operation, withdrawal itself, and the Northern Ireland protocol, which was made during parliamentary paralysis in 2019 before the last general election. There is also, of course, the Good Friday agreement, which is important. It is in the mutual neighbourly interests of the United Kingdom and the EU to recognise that we have left the EU and are no longer in its legislative and judicial sphere.

Crucially, in addition to article 16, section 38(2)(b) of the European Union (Withdrawal Agreement) Act 2020, an Act of Parliament of the United Kingdom passed by a large majority—what is known as the “notwithstanding” section—expressly enacted, after the protocol was made, that we are able to pass our own primary legislation to override the withdrawal agreement and the protocol should Parliament so decide, notwithstanding those instruments. That is within our sovereign constitutional framework of national interest and the constitutional and territorial integrity of the United Kingdom, including Northern Ireland, and to maintain peace and stability.

Indeed, Mr Lauterpacht and other great authorities have made it abundantly clear that, as far as they are concerned, international law and the Vienna convention include provision for terminating treaties and for recognising fundamental errors in their composition and implementation. Section 38, therefore, is consistent with clear universal recognition of our fundamental internal constitutional domestic law of sovereignty and fully respects international law. It is in our mutual interests, therefore, with mutual enforcement, to protect the constitutional integrity of the UK and to maintain trade stability and order, and to protect the peace process, as is clearly stated in the legal instruments. We also need to do that, as has been stated, given the unique political circumstances of the constitutional and political situation in Northern Ireland.

The Government will be well aware of all this and, I believe, will not be deflected from insisting on our sovereignty when the EU persists in its current attitudes. Therefore, I urge the Government to continue negotiations in the short term, bearing in mind what I and others have said in this debate, and mindful of the necessity in our national interest to take such action as is our right if the EU does not alter its current approach, as Madame von der Leyen has previously indicated repeatedly, along with the leaders of some of the member states, in a way that is consistent with how the protocol should be interpreted.

Taxation (Post-transition Period) Bill

William Cash Excerpts

3rd reading & 3rd reading: House of Commons
Tuesday 15th December 2020 Commons Chamber

[Sir William Cash (Stone) (Con)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

New clause 2—Provisions of Act to have effect notwithstanding inconsistency or incompatibility with international or other domestic law—

(1) The provisions of this Act have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.

(2) Accordingly (among other things)—

(a) regulations under this Act are not to be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law (and section 6(1) of the Human Rights Act 1998 does not apply in relation to the making of regulations under this Act);

(b) all rights, powers, liabilities, obligations, restrictions, remedies and procedures which are, in accordance with section 7A of the European Union (Withdrawal) Act 2018, to be recognised and available in domestic law, and enforced, allowed and followed accordingly, cease to be recognised and available in domestic law, or enforced, allowed and followed, so far and for as long as they are incompatible or inconsistent with any provision of this Act;

(c) section 7C of that Act ceases to have effect so far and for as long as it would require any question as to the validity, meaning or effect of any relevant separation agreement law to be decided in a way which is incompatible or inconsistent with a provision of this Act; and

(d) any other provision or rule of domestic law that is relevant international or domestic law ceases to have effect so far and for as long as it is incompatible or inconsistent with a provision of this Act.

(3) Regulations under this Act are to be treated for the purposes of the Human Rights Act 1998 as if they were within the definition of “primary legislation” in section 21(1) of that Act.

(4) No court or tribunal may entertain any proceedings for questioning the validity or lawfulness of regulations under this Act other than proceedings on a relevant claim or application.

(5) The period mentioned in each of the following provisions (standard time limits for seeking judicial review), or any corresponding successor provision, may not be extended under any circumstances in relation to a relevant claim or application—

(a) rule 54.5(1)(b) of the Civil Procedure Rules in relation to England and Wales;

(b) section 27A(1)(a) of the Court of Session Act 1988 in relation to Scotland; and

(c) rule 4(1) of Order 53 of the Rules of the Court of Judicature (Northern Ireland) 1980 (S.R. (N.I.) 1980 No. 346) in relation to Northern Ireland.

(6) The jurisdiction and powers of a court or tribunal in relation to a relevant claim or application are subject to subsections (1) and (2).

(7) In section 7A of the European Union (Withdrawal) Act 2018, in subsection (5)—

(a) omit the “and” at the end of paragraph (e); and

(b) at the end of the subsection insert “, and

(g) the provisions of the Taxation (Post-transition Period) Act 2020 (provisions to which this section is subject).”

(8) In this section—

“relevant claim or application” means—

(a) a claim for judicial review in relation to England and Wales,

(b) an application to the supervisory jurisdiction of the Court of Session in relation to Scotland, or

(c) an application for judicial review in relation to Northern Ireland, where the claim or application is for the purpose of questioning the validity or lawfulness of regulations under this Act;

“relevant international or domestic law” includes—

(a) any provision of the Northern Ireland Protocol;

(b) any other provision of the EU withdrawal agreement;

(c) any other EU law or international law;

(d) any provision of the European Communities Act 1972;

(e) any provision of the European Union (Withdrawal) Act 2018;

(f) any retained EU law or relevant separation agreement law; and

(g) any other legislation, convention or rule of international or domestic law whatsoever, including any order, judgment or decision of the European Court or of any other court or tribunal, but does not include the Convention rights within the meaning of the Human Rights Act 1998 (see section 1(1) of that Act);

“relevant separation agreement law” has the meaning given by section 7C(3) of the European Union (Withdrawal) Act 2018.

New clause 3—Treasury use of powers—

(1) The Treasury must, within four working days of the day on which this Act is passed, publish a report setting out the timeframe within which it will use the powers to make regulations conferred by—

(a) section 40A(2) of TCTA 2018;

(b) section 40B(1) and (2) of TCTA 2018;

(c) section 30A(4) of TCTA 2018;

(d) section 30B(1) and (3) of TCTA 2018;

(e) section 30C(5) of TCTA 2018; and

(f) section 5(2) of this Act.

(2) The Treasury must publish an annual report setting out how it has made use of the powers referred to in subsection (1).

(3) Each report under subsection (2) must include an assessment of—

(a) what considerations the Treasury made when deciding to use its powers, and

(b) the impact of the regulations on individuals and businesses throughout the UK, and specifically in Northern Ireland.

Amendment 1, in clause 1, page 2, line 43, at end insert—

“(4A) The Treasury must publish guidance setting out its proposed approach to the reliefs, repayments and remissions referred to in subsection (3)(b) within four working days of this section coming into force.”

Amendment 2, in clause 2, page 4, line 24, at end insert—

“(5) The Treasury must publish guidance setting out its proposed approach to the reliefs, repayments and remissions referred to in subsection (4)(a) within four working days of this section coming into force.”

[Sir William Cash]

The clauses before us are directly related to what was originally in the United Kingdom Internal Market Bill, and they were there for a very good reason. They were there because it is absolutely essential that we maintain our sovereignty, and the decisions must be taken by Parliament, and should not be taken by the House of Lords, whose Members are unelected. We are the House of Commons, and that part of the House of Commons which is elected has a Government who were elected in December 2019, almost exactly one year ago. In that general election, it was made quite clear that the decision before the British people was effectively to be decided in line with what was decided in the referendum. There are therefore two things joining together, in conjunction with one another: the referendum in 2016, followed by a whole series of enactments of Parliament. That includes the decision on the notification of withdrawal, which was accepted by the Labour party and was voted through in the House of Commons by 499 to around 120. It is not as if anybody could say that the supremacy of Parliament was not made manifest in the light of the referendum.

There was then a series of other enactments, and we eventually ended up with a confirmation of Acts of Parliament, including the European Union (Withdrawal Agreement) Act 2020, which was passed after the general election. Section 38 of that Act made it abundantly clear that we had the right to insist—as a matter of constitutional principle and through the enactment of an Act of Parliament—that the United Kingdom was sovereign, and, furthermore, that we would be allowed to override the withdrawal agreement. That was contained in section 38(2)(b), which specifically refers to section 7A and in turn therefore directly relates, through the use of the word “notwithstanding”, to the overriding direct effect. That is a very important point—a point that is conveniently overlooked by some people, who continually assert that somehow or other the Government have been out of order, breaking international law or breaking constitutional principles. But they never come forward with any arguments; as I said in a recent speech in the House regarding the attitude of the House of Lords, they were basically strong on assertion and empty in argument.

[John Redwood (Wokingham) (Con)]

Does my hon. Friend agree that those of us who could only vote for the withdrawal legislation because it contained clause 38 understood fully that it was a conditional agreement to the withdrawal agreement, because the EU always said that nothing is agreed until everything is agreed, and we wished to see the full package before deciding whether to allow it to be untrammelled?

[Sir William Cash]

Yes, indeed. I sometimes find that Lewis Carroll has some very useful ways of putting things. There was the famous exchange between Alice and Humpty Dumpty, in which Humpty Dumpty says: “Words mean what you choose them to mean. The question is who is to be master, that is all.” Words can be used in all kinds of different ways to try to justify propositions that are unsustainable.

I say with respect, but none the less very firmly, that in this particular case it is absolutely clear that when the decision has been taken by the British people—the voters—in the referendum and has then been endorsed by an Act of Parliament and a whole series of other Acts of Parliament, including section 38, it really is not down to the unelected House of Lords to resist it on the scale that they have, and to claim that they can override the House of Commons. We have just had a whole series of agreements and disagreements going backwards and forwards on the UKIM Bill alone.

As Lord Bingham made absolutely and abundantly clear in chapter 12 of his magisterial book “The Rule of Law”, it is for Parliament to make law and pass Acts of Parliament; it is not for the judges to intervene, to seek to make law and to impugn the sovereignty of Parliament. Anyone who wants to get the full flavour of it should read chapter 12 of “The Rule of Law”, because it is the most explicit and clear statement that one could possibly imagine.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

If section 38 of the European Union (Withdrawal Agreement) Act 2020 has such overarching reach, why are new clauses 1 and 2 necessary in this Bill?

[Sir William Cash]

Because what section 38 does is reaffirm the capacity of Parliament to be able to make such provisions in other enactments should it be necessary to do so. Because of the complexity of the United Kingdom Internal Market Bill and the issues it raises—for example, as I have said in a previous speech this afternoon, with respect to the Northern Ireland protocol itself—there remain a number of matters that are still subject not only to the negotiation over in Brussels going on right now, but to the operation of the internal market of this country. I support that Bill, but I still believe it was a mistake to withdraw the “notwithstanding” clauses, because I think we are going to find that we will need them and we may yet need to reintroduce them on a future occasion. However, it will be section 38, which is explicit with regard to the withdrawal agreement, that will give us the authority and the statutory basis for doing that, and the same applies to the provisions I am referring to here. With regard to this Bill, we had expected that the “notwithstanding” clauses would be included in it and they were not, so I have taken the opportunity—in, one might say, my usual manner—to ensure that we have an opportunity to debate this issue today.

I now turn to the reasons why I am so clear in what I have said about state sovereignty in the context of international law. The United Kingdom as a state retains its sovereign right, and it was always capable of doing this, to withdraw from the EU. The EU is an international organisation; it is not a sovereign state. On the basis of state sovereignty, it would actually be contrary to the legal position under international law that the UK would require EU consent or agreement to leave the EU, but we do have article 50 and we did implement that in the European Union (Notification of Withdrawal) Act 2017.

State sovereignty is paramount to international law. As has been said:

“If States were not sovereign, no international law would be possible”.

It is quite an interesting idea. International law would be impossible if states were not sovereign, because they combine together to create the circumstances in which it applies. Each state has internal supremacy over how governmental functions are run and is shielded from external interference without consent. The UK as a sovereign state has a right to withdraw from an international organisation, and this right is recognised by the EU treaties themselves. This is evident from the words of article 50:

“Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”

It could not be clearer from what I have said and from what everybody knows, as they have been through this passage or on this journey, that we have been through enactment after enactment. Nobody could possibly say that we have not done it lawfully. It has been done completely in the sight of the world, and I am astonished that anyone would even consider that we had not done it in the proper manner—we have done so, lawfully and in accordance not only with our constitutional law but with international law. In short, the UK’s right to withdraw from the EU is approved and agreed by international law, and only limited by UK constitutional law and thus by our own discretion, which we have exercised.

Following the Brexit referendum, the United Kingdom exercised its sovereign right to leave the EU and, as far as I am concerned, I believe this cannot be disputed. It is quite clear that we have done what was required under our own constitutional requirements and also, in my judgment, with regard to the question of international law itself. That was confirmed, for example, by the German federal constitutional court in the Maastricht treaty constitutionality case—I am now speaking about the Germans’ view of this, but it is interesting to observe—in which it said:

“Because the German citizen entitled to vote exercises his right to participate in conferring democratic legitimacy on the institutions and bodies entrusted with the exercise of sovereign authority principally through the election of the German Bundestag,”—

this is the same point I was making about our voters being represented by our Members of Parliament who passed the enactments in question—

“that parliament must also decide what is to be done about Germany’s membership of the European Union, its continuance and development”.

In other words, the principle is a common one between us and the German constitutional court.

That is of great importance in our understanding the context in which we must have the right to legislate ourselves in accordance with what our voters expect of us. We are entitled to do that in relation to the UKIM Bill or the Taxation (Post-transition Period) Bill, and we are entitled also to have a “notwithstanding” clause if we so decide. It is not for unelected persons—whether they are distinguished or otherwise, and whether they are numerous in the House of Lords or otherwise—to interfere with that.

The UK Parliament, being the supreme body in the British constitution, has the right to enact legislation inconsistent with the withdrawal agreement—I have already dealt with section 38—thereby explicitly reversing the direct effect option under article 4 of the withdrawal agreement. That is crucial, because article 4 says that, but for the fact that we are entitled to do that, it would have direct effect. That position has been set out on the UKIM Bill, which was published in September, and it was specifically stated that we would ensure that we had a “notwithstanding” clause. That has been unwisely removed, but we may come back to that on a future occasion.

The next question is, what is the position regarding the EU’s own attitude towards international law? I am afraid to say that it is guilty of recurring double standards. Article 3(5) of the treaty on European Union states:

“In its relations with the wider world, the Union shall…contribute to peace, security…and the protection of human rights…as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.”

But in the Kadi case, it was held that EU law is an autonomous legal order, meaning that in order for an international agreement to form part of EU law, it must not call into question the constitutional structure and values on which the EU is founded.

In the second Kadi case, the European Court of Justice, confirming its previous findings in the first case, ruled that the EU Courts

“must…ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the European Union legal order, including review of such measures as are designed to give effect to resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations.”

It is worth pointing out that the Security Council resolutions in question were adopted under chapter VII, which meant that those resolutions were adopted for the purposes of maintaining international peace and security and had to be carried out by members of the United Nations directly. Article 103 of the charter states:

“In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.”

It is clear that our capacity as a sovereign nation is endorsed by the United Nations charter as well.

What is the position regarding the necessity of these “notwithstanding” clauses in principle? I have already explained the general power to override treaties,  particularly by reference to the European Union (Withdrawal Agreement) Act 2020. In the Miller case, a majority in the Supreme Court said that Parliament, in the exercise of its sovereignty, is free to legislate in any way it sees fit, including contrary to the UK’s international obligations, thus

“the sovereign power of the Queen in Parliament extends to breaking treaties”.

That was confirmed in a series of other cases, such as in Salomon, in EN (Serbia) and in the Attorney-General of Ontario v. Attorney-General of Canada. The Supreme Court has unambiguously stated that this power is a corollary of parliamentary sovereignty. I have already referred to what Lord Bingham said in chapter 12 of “The Rule of Law”, so I do not need to repeat that.

[Kevin Hollinrake]

My hon. Friend said a few moments ago that Parliament has a general power to override treaties. How would that work in the case of the free trade agreements that we have negotiated with other nations? Can we simply override those treaties at will if we do not like the findings of an investor-state dispute service?

[Sir William Cash]

Interestingly, I made some reference to the principles that are under discussion in the current negotiations. Of course, we do not know the outcome of those negotiations as we speak—as I said in the previous debate, I wish them well—but it has to be made clear that, certainly as far as I and those of my friends who agree with me are concerned, one of the most crucial questions is that of state aid, because that issue is right at the heart of the discussions and negotiations this week. I asked the Secretary of State for Business, Energy and Industrial Strategy to assure the House that nothing in any treaty text or subsequent Act of Parliament will prevent the UK from having its own sovereign state aid rules, including on energy, so that we are not subjugated to EU state aid rules, nor to the European Court, given that the EU intends, as it has stated over the past week or two—in very bad faith, in my opinion—to impose and enforce its rules against us. Ultimately, of course, that would be done by a majority vote in the Council of Ministers, behind closed doors, without our even being at the table after 31 December. The fact is that we have to assert our sovereignty in the negotiations so that any treaty that emerges from them—if one does—must comply with the assertion of the sovereignty of this House, this country and this Parliament, and must at the same time apply whether in respect of direct or indirect effect.

[John Redwood]

Is it not also the case that the agreement with the European Union is muddled and contradictory? The EU has always said that it understands that the UK is going to be sovereign, so if this House simply asserts our sovereignty, as it can do, that is, in a way, our fair interpretation of the agreement.

[Sir William Cash]

Yes, absolutely. Sovereignty is also a question of fact. I do not want to get into the intricacies of 15th century history, but there was a chap called Henry VII who made it abundantly clear that as far as he was concerned he won the battle of Bosworth and that was it. I do not think we need to pursue that one too much, because sovereignty is quite a simple thing when it comes down to it: it is called political will and legal arguments of the kind I am addressing.

[Kevin Hollinrake]

I am interested in my hon. Friend’s point about sovereignty over free trade agreements. In 2009, an American firm called Cargill was awarded around $90 million because Mexico had broken a free trade agreement with the United States by, in effect, banning soft drinks that were made with high-fructose corn syrup, putting Mexican producers at an advantage. Mexico acted unilaterally, with sovereignty; is my hon. Friend saying that Mexico was allowed to do that? That is not what the dispute-settlement service determined.

[Sir William Cash]

I cannot speak for that dispute-settlement service and nor can I speak for the Joint Committee that is currently considering some of these matters. We do not really know exactly what is being decided in that Joint Committee, which is why I was concerned earlier to point out that I have asked the Chancellor of the Duchy of Lancaster to appear before my European Scrutiny Committee, of which I have the honour to be Chairman and on which I have served for 35 years, so I have a little experience of how it operates. Under our Standing Orders, it is our task—our duty—irrespective of party politics, to examine matters of legal and political importance and report to the House, and we are doing that. Of course, we need evidence, and we need to have people to appear before us and give evidence, and sad to say, despite the fact that I have written four letters to the Chancellor of the Duchy of Lancaster, he has declined to appear in front of the Committee, although he seems to be happy to see the House of Lords equivalent Committee and also the Committee chaired by the right hon. Member for Leeds Central (Hilary Benn).

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[Jim Shannon (Strangford) (DUP)]

I just want to clarify one matter. Perhaps the hon. Gentleman can do that. When it comes to sovereignty and the free trade agreements that he and others have referred to, can he give me an educated guess on where Northern Ireland stands with sovereignty? Do we have the same freedom and the same rule of law across the United Kingdom of Great Britain and Northern Ireland, or will Northern Ireland be treated differently?

[Sir William Cash]

Provided the treaty itself, and therefore the Act of Parliament that follows from it, maintain the principles I set out in my question to the Secretary of State for Business, Energy and Industrial Strategy yesterday, there is no question as to whether we will be entitled to exercise our sovereignty and to displace European Court jurisdiction and the EU laws, for example—there are many others—on state aid. We will be entitled to do so, but it is a matter of constitutional law and also, as I have explained, international law.

I am afraid that there has been a great deal of assertion that we are so-called potentially in breach of international law, but international law recognises the fact that a country can exercise its sovereign rights to defend its economic interests from a national point of view. In fact, Helmut Schmidt did precisely that in, I think, 1998 over the question of the deutschmark and the dollar. There are many examples, and we have not got time to go into them all today.

I will turn to some of the precedents just to illustrate the fact that it is not such a novel idea somehow or other to use a “notwithstanding” clause or formula, and that applies to all parties, whether that is the Labour party, the coalition, where the Liberal Democrats joined in and voted with us on these matters, or the Conservative party. For example, the Income and Corporation Taxes Act 1988 provides that the parts that diverge from treaty obligations—the language of the section was completely unambiguous—were “notwithstanding anything contrary” to those arrangements set out in the Act. The section was enacted to retaliate against the introduction of unitary tax systems adopted by certain states in the US, most notably in California. I think my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) may know about that.

What I am saying is that such provisions are not exactly unusual. Indeed, in the Finance Act 2013, which was under the coalition, the Liberal Democrats went along with allowing Parliament to effectively write a blank cheque to interfere with international treaties—approximately 130 of them, in fact. That provision is still in force. No one questioned the Chancellor’s right to introduce any such legislation or, indeed, the lawfulness of the work of Her Majesty’s Revenue and Customs, which still relies on it in combating questions relating to such arrangements.

Then there are other precedents. I shall stick to Finance Acts at this juncture as that is what we are dealing with in the context of this particular Bill, which is, of course, a finance Bill. Section 52 of the Finance (No. 2) Act 1945 overrode aspects of the Ireland-UK tax treaty of 1926. I hope I may be allowed a slight smile here, as I look across the Irish sea and consider the position with regard to the Irish Government in relation to the “notwithstanding” clauses, because we actually did this in 1926. The Act was used as an example in a case involving Collco in which the court said that if the statute is unambiguous, its provisions must be followed even if they are contrary to international law. It could not be clearer. The Finance Act 1955 again overrode the Ireland-UK tax treaty. In the Inland Revenue Commissioners v. Collco Dealings, Viscount Simonds said, “The company has no rights under any agreement. Its rights arise from the Act of Parliament, which confirmed the agreement and give it the force of law.”

Section 59 of the Finance Act 2008 excluded UK residents from benefiting from provisions in respect of profits from the trade etc. Then there is the coalition arrangement under the Taxation (International and Other Provisions) Act 2010 where, again, the position was made entirely clear in accordance with the precedents.

Indeed, it is not just the UK, or even a party in the UK, that has been doing this over a period of time in its economic and national interests. An example from 2020 is the European Central Bank’s bond-buying scheme. In May 2020, the German constitutional court sought to override EU law and the Court of Justice, suggesting that the ECB’s public sector purchase programme was unconstitutional. Then there are the bail-outs. Every one of the bail-outs from 2010 to 2015 could justifiably be described as in breach of article 125 of the Treaty on the Functioning of the European Union. I will not read out the details, but I shall give some examples: the first Greek bail-out in 2010; the Irish bail-out in 2010; the Portuguese bail-out, the second Greek bail-out; the Spanish bail-out; the Cypriot bail-out; and the third Greek bail-out in 2015. There are so many examples—whether in the UK, or in relation to other member states, or, indeed, in relation to the EU itself—that have demonstrated that, when it comes to the question of sovereignty and the ability to override treaties, this is done quite often as a matter of course. I am not saying that it is done generally. I am not saying that it happens every week or every day. What I am saying, however, is that it happens and that it happens for good reasons which are directly related to the arguments on sovereignty which I gave at the beginning, and it is not for the unelected House of Lords to tell us. That is why, in this Bill, they would not have been able to do so because of the issue of financial privilege.

I am bringing forward these amendments. I shall decide as we proceed whether I will press them to a vote. I will leave it at that for the moment, because I am more than fascinated to hear the usual Europhile utterings of the right hon. Member for Wolverhampton South East (Mr McFadden) who is about to speak.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

It is a pleasure, as always, to follow the hon. Member for Stone (Sir William Cash). I rise to speak to new clause 3 in the name of the Leader of the Opposition, and, with it, amendments 1 and 2, which are also in his name and the names of my right hon. and hon. Friends. These amendments are pro-business and pro-compliance. They are motivated by trying to get as much information to the businesses affected by the changes in this Bill in as short a timescale as possible.

The Bill that we are discussing sets out a number of taxation changes, many of them as a result of the Northern Ireland protocol. These measures will have an impact on businesses throughout the United Kingdom, but in particular, businesses in Northern Ireland and those who trade with them. In a recent evidence session for the Northern Ireland Affairs Committee, HMRC was asked how many new declarations there would be under the kind of system set out in the Bill. The official giving evidence said, to be fair, that it was a new system, so they could not be sure, but that there could be about 11 million new declarations a year. That is a sizeable additional amount of information that businesses have to publish.

The amendments we are putting forward this afternoon try to help those businesses to cope with the changes set out in the Bill. I should stress that nothing in these amendments alters the terms of the changes set out in the clauses or the purpose of the Bill. The Government have signed up to the protocol and we want to see them abide by the agreement they have made. There may be those in the Conservative party—in fact, there almost certainly are—who do not like the obligations that the protocol entails, but we believe that the Government should stick by the commitments they have made. The changes in the Bill are largely, though not entirely, a consequence of that agreement.

However, many of the clauses in the Bill are enabling in their nature. They confer on the Treasury powers that are to be filled in at a later date. For example, clause 1 says that the Treasury may by regulations provide a definition of goods being imported into Northern Ireland that

“are at risk of subsequently being moved into the European Union.”

It goes on to talk about which duties shall apply in the case of these so-called at-risk goods. Very similar language is used in clauses 2 and 5 and a number of the schedules—that the “Treasury may by regulations” provide.

To be fair to the Minister and to the authors of the Bill, there is nothing unusual about a Bill taking enabling powers that are then to be set out in further detail in regulations that come after the Bill has passed its parliamentary proceedings, but what is unusual is the context and the timescale involved. The end of the transition period is in just 16 days and, in the middle of those 16 days comes the Christmas holidays, so the Government are asking businesses to absorb, prepare for and comply with a new series of taxation regulations that those businesses have not yet seen, and to do so over a two-week period coinciding with the biggest holiday of the year. And they are doing that at the end of a year in which the very same businesses have already faced unprecedented turbulence in the wake of a global pandemic.

The businesses concerned do not want to fall foul of regulations. They want to comply. They want to be able to get this right. Businesses in Northern Ireland and the trade bodies that represent them have put in enormous efforts over the past few years to try to prepare for this moment. Of course, they could have spent all that time and effort doing what they were set up to do, which is to provide goods and services to their customers, but the process of Brexit and the specific circumstances of Northern Ireland, which are now enshrined in the Brexit withdrawal deal, have meant that a great deal of effort has had to go into trying to understand the trading and taxation rules that will kick in after the end of this year. So here we are with this Bill, with just over two weeks to go. With the best will in the world, how do the Government expect them to do this on this kind of timescale?

The purpose behind the amendments is very simple: it is, even at this late stage, to encourage the Government to get a move on. When I moved a similar amendment in Committee last week, the Minister said that guidance had been published in October, but that is not what we are talking about here. We are talking about the details of the regulations enabled by this Bill, which was published only last week.

The Minister cannot seriously be telling the House that everything covered by the Bill was dealt with in October, and there is nothing more to add. If that was the case, it would prompt the question as to why it was published only last week. The answer, of course, is that the Government wanted to use it to hold the threat of the kind of provisions that the hon. Member for Stone has just been talking about over the trade negotiations—a damaging and self-defeating tactic.

--- Later in debate ---

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register of Members’ Financial Interests.

I rise to support what may be an amendment that we are going to vote on or may be a probing amendment from my hon. Friend the Member for Stone (Sir William Cash), because I think there has been a deliberate misunderstanding by the EU and its friends over what Brexit is about and what we need to do in order to achieve a proper Brexit. A proper Brexit is taking back control; it is recreating the sovereignty of the people of the United Kingdom through their Parliament.

My hon. Friend has a distinguished career in this place trying to rebuild that sovereignty and watching, year after year, more and more of our powers taken away by successive treaties, by successive directives and regulations, many of them automatic ones over which the UK had little or no influence, and by court judgments which, again, we had precious little ability to shape. He is right that, as we come to legislate for our new arrangements as a sovereign country from 1 January next year, we need to make quite sure that we have back under the control of people and Parliament all those powers that we need to regulate, to govern and to take wise decisions on behalf of the United Kingdom.

I am very worried about some elements of the withdrawal agreement. I was told, as we were all told, that nothing was agreed until everything was agreed, and that that meant the future relationship as well as the withdrawal agreement. The EU decided for its own convenience to sequence things and say, “You have to sign the withdrawal agreement first and then the future relationship agreement will follow.” A bit of flesh was put on the bones of the future relationship in the so-called political declaration, which one would have thought there was a lot of moral pressure to go along with even if it was not as strictly legally binding as they hoped the withdrawal agreement would be.

I now think there has been a lot of bad faith, because, according to both sides, the central feature of the future relationship was always going to be a free trade agreement, and where is the free trade agreement? We now discover that the EU wishes to take all sorts of other powers away from us as the price for the free trade agreement, which we have already overpaid for in the withdrawal agreement and which one would have thought, in good faith, the EU would now grant. It is very much in its interests—even more than it is in our interests—given the huge imbalance in trade, and above all in the trade that would attract tariffs if we had no free trade agreement: the trade in food.

That is really what we are talking about: are there going to be tariffs on food or not? We, the United Kingdom, run a colossal £20 billion trade deficit with the EU on food. We have to impose pretty high tariffs on food from the rest of the world—that makes absolutely no sense where we could not grow any of it ourselves; it may have some benefit for some of our farmers some of the time—but we are not allowed to put any similar tariffs on EU-sourced produce where we could produce it ourselves.

The EU system is to try to use tariffs to buttress domestic production, but it has not worked for the United Kingdom; it has worked the other way. The tariffs have been taken off in order to benefit the Dutch, Spanish, French or Irish suppliers of our market with food at zero tariffs. The EU already has rather more interest in tariff withdrawal than we do, because we could have a range of tariffs that would probably achieve the aims both of cutting food prices by having a lower average tariff and of having a bit more protection on the things that we really could make and grow for ourselves here, which we are not allowed to protect against continental products at the moment.

I therefore think that the Bill could be improved by reminding the EU that we will not be pushed around and we will not suffer too much bad faith from those original negotiations or from the withdrawal agreement itself. I think it was a very imperfect agreement. It is pretty ambiguous in places; it is imprecise in places. I have never felt that anything the Government have done, or thought of doing, was in any way illegal. Lawyers could make a perfectly good case under the withdrawal agreement treaty terms themselves, and anyway, we have the protection of my hon. Friend’s section 38, which made it very clear that this Parliament’s acceptance of the withdrawal agreement was conditional. Why else would anyone have put section 38 in the withdrawal agreement Act unless they were making a point?

[Sir William Cash]

Does my right hon. Friend appreciate that it was the Prime Minister who, after an eight-hour meeting I had in No. 10 that day—17 October 2019—insisted that section 38 was necessary and appropriate?

If we go back to the previous Administration, just imagine where we would be when we consider the Chequers arrangements, and then imagine what it would have been like if we had not decided to vote against that dreadful withdrawal agreement in its original shape. There were provisions that needed to be rectified, and section 38 provides the mechanism that enables us to do that.

[John Redwood]

Indeed. I think my hon. Friend has confirmed that under the previous Prime Minister, when those of us who could not vote for her agreement said that we needed a sovereignty escape clause, we were told that that would not be permissible because it would not be effective implementation of the agreement; which was then reassuring to us, not liking the withdrawal agreement very much and realising that it was a provisional agreement and would be completed only were there to be a satisfactory outcome to the total range of talks. It was a totally artificial constraint that the EU invented that it had to be sequenced, when up until that point everybody had always rightly said that nothing was agreed until everything was agreed.

I would like to hear from the Minister a little more explanation on the detail of the Bill. As I understand it, the Northern Ireland protocol would apply only to goods that are passing from Great Britain to Northern Ireland and then on to the Republic of Ireland, or the reverse—goods coming from the Republic to Northern Ireland and then passing on to Great Britain. Am I right in thinking that that is a very small proportion of the total trade? In what ways will the Government ensure that it is properly defined, so that we do not catch up most goods in those more elaborate procedures? The bulk of the trade will be GB to Northern Ireland and back, or Republic of Ireland to Northern Ireland and back, and it should not in any way be caught up in any of these proposals. I am not sure that we do have a de minimis way of dealing with the so-called things at risk.

It is not clear how the system will work for items at risk where we agree that they are at risk—and I hope it is a UK decision about what is a risk, not some other kind of decision with EU inspectors. It would be helpful to me and the wider community interested in this debate to know how a business would proceed if it had such a good at risk, to whom it would answer, and what decisions would be made about such a good in Excise, because it sounds a rather complicated and difficult arrangement, both for the business concerned and for those who are trying to enforce.

I am trying to tease out from the Minister, in pursuit of the interests of my hon. Friend the Member for Stone and myself on sovereignty, whether we are really in control if the trade has started off from GB and is going to Northern Ireland. What kind of external intervention can the EU or the Republic of Ireland engineer—how is that fair, and how will it be determined? I think that is what we are most worried about in this piece of legislation, and we would be more reassured if there were the override that my hon. Friend proposes. I should be grateful for some explanation.

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to be called to speak in this debate. I will speak particularly to new clause 1 and new clause 2 because, as my hon. Friend the Member for Stone (Sir William Cash) said, this is a matter of sovereignty. I am very keen to explore where sovereignty ends and international law starts, and that is right at the heart of those new clauses, I guess.

We have made reference several times in these debates to section 38 of the European Union (Withdrawal) Act 2020, where it says that,

“the Parliament of the United Kingdom is sovereign.”

If that is the case, and I accept that it is the case in areas of our jurisdiction, is there a need to reiterate it in every piece of legislation, or is it simply a fact that Parliament is sovereign?

My hon. Friend has rightly stated quite clearly that the UK Parliament has a general power to override treaties, but I am very keen to understand how that works in the sphere of international treaties, particularly in terms of trade agreements. As I quoted in my intervention earlier, there was a case between Mexico and the US, settled in 2009, where a US company, Cargill, took the Mexican Government to court on the basis that they had breached the general agreement on tariffs and trade regulations of 1994. The Mexican Government had applied some punitive tariffs on soft drinks coming from the US, produced by Cargill and other companies, which effectively blocked access to the Mexican market.

[Sir William Cash]

Let me respond briefly. This provision is really going to apply only where there is an impugnment —an infringement—of sovereignty itself. In this case, the entirety of our leaving the EU, as is well understood by the EU and provided for by article 50, and which we have done lawfully, demonstrates that when the EU and the remainers start prattling on about the idea that somehow or other we should do it on their terms, which is the basis on which the whole thing was constructed when the negotiations began, however many years ago it was—I cannot quite remember, as it seems so long ago—we see that the bottom line is that they have acted in bad faith. That is the problem. If it were not for that —we had reasonable negotiations—we probably would not be having to discuss these matters now. Most recently, we have seen that over the state aid rules, with their saying, “We’re going to punish you if you don’t do what we want.”

--- Later in debate ---

[Kevin Hollinrake]

Therein lies the difficulty, does it not? As soon as a nation, however powerful, is allowed to make a subjective judgment, it leads to international chaos. We can have international agreements that people sign and adhere to, with independent resolution. My point is that as soon as we have done that, we have handed over the settlement of the issues and disputes to another body, and we are, in effect sharing some of our sovereignty. We do not have total sovereignty at that point. We have sovereignty to sign the agreement and to exit the agreement, but I cannot see how using sovereignty to override an agreement works. I think it would result in chaos.

[Sir William Cash]

This is about when the issue of the override is to do with sovereignty itself—that is the point. That is why this matter is essential. That is why international law actually recognises it, in article 46. My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) accepted that, as, indirectly, did Lord Judge, on this Bill. So, for practical purposes, I have quite a lot of support, even from those who originally opposed my proposals.

[Kevin Hollinrake]

The trouble with new clause 1 is that it says the provisions have effect

“notwithstanding any relevant international or domestic law”.

Subsection 2(g) states that that means “any other legislation”. This Parliament’s decision would affect any other legislation, and so this is an overarching amendment. The key thing is that we would all agree that international agreements and free trade are important, and we need to make sure they are fair on all parties subject to those agreements. We must not forget that this is a two-way street. We want the other signatories to these trade agreements—be it Canada, Japan, the EU or whatever—to adhere to these agreements as well. It is not just about the UK heading into these agreements. We partly do that through the agreement itself, of course, but also through the soft power that the UK holds and the respect that people have for the United Kingdom.

There are some special circumstances regarding the withdrawal agreement, because there were two sides to the coin. Yes, there were the commitments that we made under the withdrawal agreement and the Northern Ireland protocol, but there was also the EU’s commitment to use its best endeavours to deliver an ambitious free trade agreement. As Members on both sides of this Chamber have said, there is no doubt that some of the things that the EU has done over the past few months have indicated that it was not using its best endeavours and that it was acting in bad faith, particularly on things such as requiring exit summary declarations for products manufactured in Northern Ireland and then shipped to the rest of the UK. That is simply unacceptable. As the right hon. Member for Leeds Central (Hilary Benn) said, what on earth would the EU do with these things if we exported them from Northern Ireland to the rest of the UK? Describing all goods that went from Great Britain to Northern Ireland as “at risk” would also be simply unacceptable. I was very pleased that those key issues were resolved last week. It largely went by without notice or recognition from many Opposition Members and some parts of the media. New clauses 1 and 2 are interesting. I will not be supporting them, but I will be supporting the Bill.

[Stephen Flynn (Aberdeen South) (SNP)]

It is a pleasure to see you in the Chair again, Mr Deputy Speaker.

When I put my name down to speak in this debate, I guess I did so more out of intrigue than expectation, given the shenanigans and the boorach of last week. We all saw what unfolded over the Ways and Means resolutions, the Bill coming 24 hours later and then off to Committee of the whole House, where nothing changed whatever. A week later, here we are on Report, with, as far as I can see, a very clear likelihood that the Government’s Bill will move forward without a single change, despite the best valiant efforts of the hon. Member for Stone (Sir William Cash) and his desire again to get the Government to break international law.

In that regard, I must pause and reflect; I find it utterly fascinating that, despite getting what they appear to want, Members of this Parliament who have—from what I have heard—seemingly spent their entire lives working towards the political cause of leaving the European Union still seem thoroughly unhappy. I take a little bit of joy in knowing that they are so bitterly disappointed that even their friends in the Government still refuse to do just what they want. Now, I cannot be the only one who has looked at Twitter, and it appears that there may well be a breakthrough in terms of an EU trade deal. I do not know whether the Minister is sighted on the developments on this occasion, because I do not think he was last week, but I do not think that I am overreaching or overstepping in any way, shape or form to suggest that, although that may be the case, the hon. Member for Stone may still be unhappy.

[Sir William Cash]

Will the hon. Gentleman give way?

[Stephen Flynn]

Of course I will let him intervene.

[Sir William Cash]

I am so glad. I can only say that, actually, sovereignty is not just a theoretical concept; it is a practical necessity. It is on the basis of that that we are able to enter into arrangements internationally that are justified by our own terms of reference. The problem with the EU is that it wants to impose its terms of reference, and it never wanted us even to be able to compete with it as a third country after we had left. But it could not deny that it was lawful, so it resorted to all these other obstructions.

[Stephen Flynn]

I admire the hon. Gentleman’s repetition, but ultimately, when it comes to sovereignty, there is only one sovereignty that I am interested in: the sovereign will of the people of Scotland. When we look at the European Union in terms of sovereignty and the will of the people of Scotland, our views have been completely ignored. The people in my constituency voted overwhelmingly to remain. Aberdeen city as a whole is projected to be the hardest hit city in the entire UK as a result of Brexit, irrespective of whether we get a deal or not. Although I do not want to encourage the hon. Gentleman any further, I simply cannot understand the premise of his argument—that he is willing to break international law and is talking about sovereignty, while simultaneously rejecting the sovereign will of the people of Scotland.

[Sir William Cash]

Will the hon. Gentleman take one last intervention?

[Stephen Flynn]

No, the hon. Gentleman has had plenty of opportunities to intervene and, indeed, speak today, and I think I will be doing everyone a favour if I just continue. I see that the Minister is laughing as well.

On the purpose of the Bill, I would like to reflect on the comments of the shadow Minister, the right hon. Member for Wolverhampton South East (Mr McFadden), because what he said was incredibly important. I apologise if I am misquoting him but I think he talked about the Bill hovering as a threat. That is an important point to reflect on, particularly as we look at what was being undertaken last week and the entire process that we have gone through.

I want to conclude, because I am aware that I am close to havering, and in Scotland, when someone starts doing that, they should probably sit down. As we look forward to what the Bill will do for online sales and the level playing field that it will create on VAT sales, which is important—I see the hon. Member for Thirsk and Malton (Kevin Hollinrake) nodding his head, and it is worth repeating that we agree on this point—we know that that level playing field should go further, because Northern Ireland will, in effect, have a beneficial agreement compared with anywhere else in the United Kingdom, be that Wales, England or Scotland. The level playing field that the Government are putting in place for online sales should also apply to Scotland to help our ability to access EU markets, and I would encourage the Minister to reflect on that point.

--- Later in debate ---

[The Financial Secretary to the Treasury (Jesse Norman)]

I am grateful to everyone who has contributed to the debate. I will address the proposed amendments and then come to the specific points that have been raised.

New clauses 1 and 2, tabled by my hon. Friend the Member for Stone (Sir William Cash), would, if adopted, mean that the provisions in the Bill would apply notwithstanding any domestic or international law. The House will be aware that on 17 September, the Government set out that Parliament would be asked to support the use of so-called “notwithstanding” provisions in clauses 44, 45 and 47 of the United Kingdom Internal Market Bill and any similar subsequent provisions in a Finance Bill, but only in circumstances where the fundamental purposes of the Northern Ireland protocol would be undermined. Only in those circumstances would Parliament be asked to support the use of so-called “notwithstanding” provisions, as described.

[Sir William Cash]

We do not really know exactly how the Northern Ireland protocol is going to be interpreted, nor do we actually know its full content, and the Chancellor of the Duchy of Lancaster is declining to appear before my Committee to explain it.

[Jesse Norman]

What we do know is that the agreement was reached by the Chancellor of the Duchy of Lancaster acting for the Government on a duly legitimately and democratically elected basis in the exercise of our national sovereignty, and that should, I think, be enough for my hon. Friend.

These clauses were previously introduced as reasonable steps to create a safety net so that the Government would always be able to discharge their commitments to the people of Northern Ireland in the event that a negotiated outcome could not be reached in the Joint Committee. Following intensive and constructive work over the past weeks by the UK and the EU, the Government have now reached an agreement in principle on all issues in relation to the protocol on Ireland and Northern Ireland. This is an agreement that discharges the Government’s commitment to the people of Northern Ireland to ensure that there are no tariffs on goods remaining within the UK customs territory.

As part of the agreement, the Government committed to removing the notwithstanding provisions in the United Kingdom Internal Market Bill and not to introduce them or any similar provisions in this Bill. As was noted by the Chancellor of the Duchy of Lancaster in his statement to the House last week, in view of the agreement these provisions are no longer required. On that basis, I hope the House can agree that new clauses 1 and 2 are unnecessary.

New clause 3 and amendments 1 and 2 tabled by the Opposition would, if adopted, require the Treasury to publish guidance setting out its proposed approach to any reliefs, repayments and remissions for which the Bill allows provision to be made. The provisions contained within the Bill ensure that the Government have the flexibility they need to establish the framework for such reliefs, repayments and remissions. Details of any policies along these lines would be announced in due course, and HMRC will publish detailed guidance providing certainty to traders and businesses, as is its normal procedure. For this reason, putting such additional provisions in the Bill is unnecessary, and therefore I urge the House to resist these amendments.

New clause 3 would, if adopted, require the publication of various reports setting out the timeframes in which the customs duty charges contained in clauses 1 and 2 would be implemented as well as the factors taken into account when using these powers. The provisions contained in clauses 1 and 2 allow the Government to establish customs charging provisions to support the practical application of article 5.1 and 5.3 of the protocol and to deal with the movement of goods from Northern Ireland to Great Britain. This is important legislation, which will ensure that the Government are able to implement the Northern Ireland protocol as required in UK law ahead of the end of the transition period. The regulations that set out the detail of the charging regimes will be laid after the Bill receives Royal Assent.

This Bill thus provides the framework, and the detail will be provided alongside the relevant regulations. When bringing forward regulations the Government will also provide explanatory material in the usual way.

If I may, I will now turn to some of the questions raised by Members who spoke in the debate. The right hon. Member for Wolverhampton South East (Mr McFadden) encouraged the Government to get a move on; as he will know, the Government have been proceeding extremely rapidly and energetically in this area ever since the issues first arose. He also asked about guidance, and of course he is right that in the normal course of these things guidance will follow the publication of the Bill, but he also ought to be aware that the guidance that will be published follows the Northern Ireland protocol and the Command Paper and that in relation to other matters, which is what I was referring to, the House has seen customs guidance on 7 August, the trader support service launched on 20 September, guidance on VAT and excise on 26 October, and a whole host of other information designed to support traders and others involved in these changes.

The right hon. Gentleman asked what new systems are being put in place, as did my right hon. Friend the Member for Wokingham (John Redwood), so let me respond on that. My right hon. Friend will be aware that, in terms of the agreement for at-risk and not-at-risk goods, there is a requirement for there to be genuine and substantial use for the goods to be classified as at-risk. HMRC expects there to be up to 11 million declarations in relation to trade between Great Britain and Northern Ireland, and the Customs Declaration Service, which has been put in place, has a minimum viable product up and running as we speak.

The hon. Member for Glasgow Central (Alison Thewliss) referred to hokey-cokey clauses, but of course the clauses have never been included. They were themselves a response to a perfectly plain concern, which every Member of the House should feel, that, as matters stood, even a bag of salad would be considered an at-risk good, a consequence of the previous understanding that was patently absurd and which has been removed by this change.

The hon. Member for Warwick and Leamington (Matt Western) talked about a last-minute approach, but I would remind him that when this point, or this attempted point, was made by the shadow Chief Secretary, the hon. Member for Houghton and Sunderland South (Bridget Phillipson), I asked her if she could recall a single occasion when the EU had ever failed to negotiate except at the very last minute of a negotiation, and she was unable to point to such a case. That is, I think, the principal reason why we are in the position that we are in.

With those remarks, I would urge the House to resist these amendments.

[Sir William Cash]

We have had an interesting debate and, as far as I am concerned, the Government had originally proposed putting these clauses in the Bill itself. I personally think that they will find, in due course, a necessity to have something that is on exactly the same lines, and the same applies to the UKIM Bill. However, in the circumstances, because I want this Bill to go through, I beg to ask leave to withdraw my new clause. I just simply say: sovereignty is indivisible.

Clause, by leave, withdrawn.

New Clause 3

Treasury use of powers

“(1) The Treasury must, within four working days of the day on which this Act is passed, publish a report setting out the timeframe within which it will use the powers to make regulations conferred by—

(a) section 40A(2) of TCTA 2018;

(b) section 40B(1) and (2) of TCTA 2018;

(c) section 30A(4) of TCTA 2018;

(d) section 30B(1) and (3) of TCTA 2018;

(e) section 30C(5) of TCTA 2018; and

(f) section 5(2) of this Act.

(2) The Treasury must publish an annual report setting out how it has made use of the powers referred to in subsection (1).

(3) Each report under subsection (2) must include an assessment of—

(a) what considerations the Treasury made when deciding to use its powers, and

(b) the impact of the regulations on individuals and businesses throughout the UK, and specifically in Northern Ireland.”—(Mr McFadden.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Taxation (Post-transition Period) Bill: Business of the House

William Cash Excerpts

Wednesday 9th December 2020 Commons Chamber

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I want to make a few comments about this business of the House motion, because I think it is indicative of where we have got to.

After four years, we have a Bill on the taxation arrangements after Brexit that is to be debated in less than four hours. Not only that, but it is a Bill of over 100 pages in length that was published less than 24 hours ago. The Minister may claim that the House has passed emergency legislation in a single day in the past, and of course that is true: the House can do that in emergency circumstances. But this deadline that we face at the end of the year is not new. It is not a surprise. It has been known ever since the withdrawal agreement was reached. The Government have said repeatedly over the past year that this was an immovable deadline. So why is it, just three weeks before that deadline, that the Government are only publishing these arrangements and this timetable now?

Businesses in Northern Ireland, and those that do a lot of trade with Northern Ireland, could have been given some idea of what was coming long before now, but as it stands, not even the Bill before us gives them certainty, as so much of it has to be followed up with further regulations. The truth is that there was no need for this last-minute legislative scramble. The real reason we are in this position—the reason why this business motion is before us and gives the House so little time—is that the Government thought that it was a good negotiating tactic to breach the agreement, or to threaten to breach the agreement, that they reached with the EU last year. They threatened to do that in this Bill as well as in the United Kingdom Internal Market Bill. As so often, it was a threat posing as strength that ended up doing more harm to us than to anyone else. That is why this Bill was so late, and that is why the time to debate it is so short.

The Government, immediately before they embark on a new future based on trade deals, chose to advertise around the world that they were willing to break the last one that they signed. Boasting about your willingness to go back on your word is not an illustration of strength; rather, it is a graphic portrayal of what Brexit has done to the Conservative party.

[Sir William Cash (Stone) (Con)]

Will the right hon. Gentleman give way?

[Mr McFadden]

I am going to continue, because I do not have long to go.

As the House has been reminded, it was Mrs Thatcher who said:

“Britain does not break treaties. It would be bad for Britain, bad for our relations with the rest of the world and bad for any future treaty on trade”.

The threat to do so has left us with the timetable for this Bill. That inevitably means that scrutiny of today’s measures will be severely truncated and parts of it will go through without being properly examined. What we have before us is the appearance of scrutiny, not the reality—Potemkin scrutiny. That is what a timetable like this gives us.

This is not just about us here in this House—it also leaves businesses affected, with little or no time to absorb and understand what is being planned. There have been many comments on the state of things in recent days, but perhaps the most pithy has come from the chief executive of the Road Haulage Association, who said this week, commenting on the border arrangements:

“Frankly, it’s just a mess.”

The bigger point here is that the reason why we are in this position is that the Government’s approach to all of this has relegated concerns about business, prosperity and people’s livelihoods to a distant second place. This motion and the approach behind it are not only bad for the legislative process, but bad for the country too.