Taxation (Post-transition Period) Bill DebateFull Debate: Read Full Debate
Alison ThewlissMain Page: Alison Thewliss (Scottish National Party - Glasgow Central)
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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.
We still do not understand the real definition of “at risk” goods or indeed how they are going to be monitored. Jess Sargeant also pointed out issues around the rules on VAT and second-hand goods. That might sound like a small thing, but actually it is quite a big thing because it involves second-hand cars, many of which are exported to Northern Ireland from the UK. If people want to buy cars, they will need to know what the rules are around VAT. That is quite significant in terms of the costs that could be involved.
I do not propose to detain the House for very long. I thank the Minister for the typically courteous way in which he has led these short debates on the Bill. He has outlined the changes that the Bill makes through its various clauses on customs, VAT, insurance liability and so on, and I do not propose to repeat all that.
From our point of view, and as I have made clear all along, we do not oppose the passage of this Bill, because we understand that these changes have to be put in place. The Government reached agreement on the Northern Ireland protocol. We want them to stick to and abide by their agreements as we want the EU to stick to and abide by its agreements, too. Many of the changes in the Bill stem from those agreements. I also reiterate my party’s strong support for the Good Friday agreement and for policies and practices that uphold the spirit and letter of the agreement into the future.
We have set out our views on the timing of the Bill and the difficulties that the changes it outlines pose for businesses trying to comply with them. The Minister has said it is always last minute with the EU and that it was always going to be like this. I am not sure I fully agree with that. We are asking a lot of businesses with just a couple of weeks of the year left, in the midst of the pandemic and as we are about to enter the Christmas holiday period. I hope that the Minister and the Exchequer Secretary to the Treasury, the hon. Member for Saffron Walden (Kemi Badenoch), who joined him last week, are correct when they say that everything will be in place by 1 January, but I cannot help but reflect at this time of year that perhaps in the minds of many it did not always need to be like this. Perhaps the Prime Minister’s Christmas wish—all he wanted for—was that the German car manufacturers would come riding over the hill and influence the negotiations. I hope that Santa visits all good boys and girls over the Christmas period, but I do not think that that particular Christmas wish of the Prime Minister and many of his colleagues is going to come true. This week, just as last week, one gets the impression that the action is elsewhere. I do not know whether an agreement will be reached in the next couple of days. There has been some rumour and social media chatter that we are heading in that direction over the past hour or so. Time will tell and wisdom would counsel us to wait to see what happens before making any predictions.
These measures in the Bill are largely a result of the commitments that the Government have made. I hope they are not too burdensome on businesses because at the end of all this—both the Brexit process and the covid period, which we hope to see come to an end through the use of the vaccine—we will have to gather around a process of business getting back to what it does: trading, serving its customers, providing goods and services and helping economic growth to come back to the country. There may be competing visions as to how best that should happen in the future, and what a blessed debate that would be in our politics, rather than some of the issues that have coloured it over recent years. I thank you, Mr Deputy Speaker, and all the Members who have contributed to debates on this Bill.
I have declared my business interests in the Register of Members’ Financial Interests.
The Bill is a great missed opportunity. It should have been the Bill in which we started to cut and reorganise the taxes, celebrating our new freedoms as we leave the European Union. There is so much good we could do by remodelling and reducing the incidence of VAT, for example, or by having excise duties and tariffs that make sense for British business and for British importers, because we need to balance the two. Instead, it is a rather technical Bill.
I think it is a pity that this House has not been given a detailed account of what the Chancellor of the Duchy of Lancaster has agreed so far, and a detailed account of what still remains to be agreed, because I believe that there were outstanding issues. On behalf of Northern Ireland within the United Kingdom, we need to know the extent of this possible dual jurisdiction and how it actually works.
The Minister has kindly assured me on more than one occasion that the VAT regime in Northern Ireland will be the UK VAT regime and will be enforced by normal UK enforcement. That is very good, but cannot be the whole story, because we know that there is this overlapping jurisdiction for certain types of goods. We are still not privy to how big an issue that is. I presume it is a small proportion of trade, but we have not been given any indication of that, and we have not been told—perhaps the Joint Committee has not yet agreed it, or does not want to share it with us yet—exactly how that might work. It is a pity that we do not have more of that detail.
I am also concerned that we should not get drawn into the state aid issue, which is clearly part of the wider discussion between our Ministers and negotiators, and those in the European Union. We know that the European Union takes a very wide definition of state aids. State aids definitely include all taxation, which is the subject of this piece of legislation, and grants, subsidies, the competition framework and general industrial policy. It is very wide ranging, and there is no way we can say we have Brexit if the EU will have powers over our state aid policies, because that would be tentacles stretching into this Bill and the powers of the Treasury, Customs and Excise, and the Business Department and its competition and industrial policies, as well as into energy and practically every other major area one can imagine. I therefore hope my right hon. Friends and the UK negotiators are firm on that in their discussions.
We must have control of taxation and state aids as a fundamental part of our Brexit departure. We would have taken more confidence from the Government if they had used this Bill to show just how much better a UK-based taxation policy could be. We need a taxation policy that promotes more fishing and farming at home, promotes more industry and manufacturing at home, and promotes that green revolution they want by stripping the VAT off the green products that the EU has imposed on them—a policy that allows small businesses to flourish and does not overburden them with compliance and red tape. That is what we wanted from Brexit, and the sooner Ministers bring it forward, the better.