Taxation (Post-transition Period) Bill

Alistair Carmichael Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 9th December 2020 Commons Chamber

[Jesse Norman]

VAT in Northern Ireland will be subject to the EU principal VAT directive, and for that purpose the ECJ will be the judicial body. I cannot comment as to whether or not there will be anything more than staff, except to say that excise processes in Northern Ireland will be carried out by Her Majesty’s Revenue and Customs.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The Minister was asked by his right hon. Friend the Member for Wokingham (John Redwood) whether the ECJ would be the ultimate arbiter, and the Minister replied that it would be the judicial authority. Is that the same thing?

[Jesse Norman]

Yes, I was simply paraphrasing the point that my right hon. Friend made.

Under the terms of the protocol, we need to treat goods at risk of such onward movement into the EU differently from those groups that are not at risk. On the specific details of what will be defined as at risk or not at risk, the House will be aware of the EU-UK joint agreement made this week setting out that an agreement has been reached in principle regarding the implementation of the Northern Ireland protocol. In accordance with that statement, the draft texts will now be subject to further consideration in both the EU and the UK. Once that is complete, a joint committee will be convened to adopt them formally. Further details will be set out in due course, and before the end of the year.

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[Sir William Cash (Stone) (Con)]

I simply would like to put on record it on Second Reading the fact that, as I made clear in a point of order earlier, consideration on Report will take place next week and a lot will happen between now and then. The UKIM Bill at the moment has the “notwithstanding” provisions in it; they have not yet been taken out. We do not yet know what will transpire this evening or at any point between now and the Report stage of this Bill next week. Therefore, I have given instructions for the tabling of amendments to reinsert the “notwithstanding” provisions for the purposes of this Bill, which would have appeared but for the fact that the decision had already been made yesterday, before a statement was made to the House of Commons. That was dealt with today in principle, although not the question of what actually is going to be done. Therefore, for practical purposes, all I need say on Second Reading is that there are relevant provisions within the scope of this Bill, in clause 9, which is entitled “Recovery of unlawful state aid”.

Earlier this afternoon, I chaired, as I always do on Wednesdays, the European Scrutiny Committee. We have a 10 or 15-page paper on this question. The report, which will be signed off today and then published, covers reform of state aid rules and potential implications for the UK and includes a full description of what the state aid rules would mean; what the evaluation is at the moment by the European Commission; what it intends to do with respect to state aid in relation to enforcement proceedings; matters of sovereignty regarding the United Kingdom; the timetable for amendments to the EU state aid rule book; and the continued relevance of EU state aid law to the UK.

I am reading out some headline points, which also include infringement proceedings for state aid granted before 31 December; state aid law under the protocol on Ireland and Northern Ireland; state aid commitments—this is of course highly relevant to what the Minister said at the beginning, and I strongly advise him to read the report carefully—and state aid commitments in the EU-UK trade agreement, which the Prime Minister is going to be discussing today, and we do not know the outcome of that; the impact of EU subsidy controls on the competitors to UK businesses; and article 10 of the protocol on Ireland and Northern Ireland, which my right hon. Friend the Member for Wokingham (John Redwood) referred to. Indeed, I did too this afternoon, when my right hon. Friend the Chancellor of the Duchy of Lancaster made his statement and I pointed out that not only do I agree 100% with what the Prime Minister said at Prime Minister’s questions on all those relevant matters, wishing him well for this evening, but that what the Chancellor of the Duchy of Lancaster announced yesterday, in principle, and then reaffirmed today must not be allowed to undermine the unfettered sovereignty of the United Kingdom Parliament. That sovereignty is based on the referendum, the votes, the Acts of Parliament that everybody in this House on the Government Benches and the House of Lords agreed to, and, for that matter, section 38 of the European Union (Withdrawal Agreement) Act 2020, which was passed by a majority of 120 in this House—not a word of dissent from the House of Lords and not a word of dissent from any Member of this House.

In conclusion, I intend to table these amendments to examine the question when we get to the Report stage next week.

[Mr Carmichael]

Will the hon. Gentleman give way?

[Sir William Cash]

It is always a pleasure to give way to the right hon. Gentleman, with whom I have been jousting on these questions for the best part of 20 years.

[Mr Carmichael]

I hate to think it is the best part, but certainly it has been almost 20 years. The hon. Gentleman gives an interesting list of topics that his Committee has considered. The actual, practical application of these matters will be very different if the ratio decidendi in the Factortame case continues to have application in Northern Ireland post 31 December. Is that a matter he has considered, and what impact does he think it has on these things?

[Sir William Cash]

As somebody who has taken a great interest in Irish matters since I came into this House, I can only say the answer to that is yes. However, I also know that there is an enormous amount of malicious rubbish talked about the implications for the hard border. We are not going to impose a hard border. If anybody does, it will be the EU. If the EU gets its way on these matters, believe me, we are going to end up with difficulties that will have been created by the EU, not by us. I remember Martin Selmayr saying that the price the United Kingdom would have to pay would be the loss of Northern Ireland. I mean, it is as bad as that. I therefore say that I do take a great interest in it, because I want the Union to survive and to prosper. I believe it can, but it will not be able to if we end up with provisions that undermine the sovereignty of the United Kingdom Parliament.

On the specific question of state aid, that is a matter within the scope of the Bill. I therefore expect our amendment to be able to be called. Precisely what I do about it at that time will depend on the outcome of the negotiations, but I am not going to buy a pig in a poke and accept the idea that it is all over and done with because somebody who happens to be a Government Minister made a statement yesterday from Brussels and then came to the House to put forward his case today. We have not seen the details, so I want to reserve my position until I know exactly what the outcome of the negotiations is. I would warrant that the 70% of the British people would agree with me.

--- Later in debate ---

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Somehow or other, I always thought that taking back control would look rather different for this place than this: to have just 24 hours to consider 112 pages of highly technical and detailed taxation legislation is an affront and insult to this House, and an abuse of the process by which we are supposed to govern ourselves. Those on the Treasury Bench who have brought forward this legislation in this way should hang their heads in shame. But, as the hon. Member for Oxford East (Anneliese Dodds) indicated in her contribution, it is, unfortunately, necessary. It is remarkable that amongst these 112 pages there are so many enabling provisions; so we know that in fact the detail is still to come and there will require to be secondary legislation to implement the detail of what our businesses will actually need.

The kindest comment I can make about the Bill at this stage, given the time available to me, is that it is just a foretaste of things to come. Essentially, most of what we have here pertains to the relationship with Northern Ireland, and even at this stage the Government are still tying themselves in knots because they promised three things of which they could only ever at best deliver two. They said we could come out of the customs union or we would have no border north and south or have no border east or west. In fact, if we were going to come out of the customs union, eventually we had to have a border north or south, or east or west; we could not have all three. I listened to the right hon. Member for Wokingham (John Redwood) talking about electronic borders, but the clue is in the title: it is a border. Once sovereignty trumps economics, that inevitably leads to having borders—something that should be heard in all parts of this House.

I was struck by the hon. Member for Glasgow Central (Alison Thewliss) quoting Robert Burns, saying:

“The best laid schemes o’ Mice an’ Men

Gang aft agley,”

I was disappointed and a little surprised that she did not then deliver the next line of that stanza:

“The best laid schemes o’ Mice an’ Men

Gang aft agley,

An’ lea’e us nought but grief an’ pain,

For promis’d joy!”

If ever I heard the perfect way of describing Brexit, that has got to be it:

“An’ lea’e us nought but grief an’ pain,

For promis’d joy!”

The House will remember, of course, that Robert Burns was an exciseman, so he would know quite a lot about customs and the matters in this Bill; Lord alone knows what he would make of it if he were alive today.