Taxation (Post-transition Period) Bill

Andrew Griffith Excerpts

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

[Alison Thewliss (Glasgow Central) (SNP)]

The way this Bill has been brought to the House today, less than 24 hours since it was published yesterday, really shows the disrespect the Government have for Parliament and for all of us here today. It is unacceptable that the UK Government are coming so late in the day with these proposals and are blatantly using them as a form of leverage in their negotiations.

The proposals before us today will impact on the daily lives of residents in Northern Ireland and of businesses more widely. I have concerns, not least from what the hon. Member for Stone (Sir William Cash) has just said, that the clauses being taken out could easily be put back in again—if not by him, then by the Government themselves. We have no certainty over that because of the way they have conducted these negotiations.

As MPs, we do not have adequate time to scrutinise what is in front of us this afternoon. Businesses and stakeholders have also been excluded from the process and they are, of course, those who will feel the impact the most. It is typical of the slapdash, chaotic way the UK Government do things, but I would like very much to put on record my dismay and regret at this shambles. I would also like to say that, while I have huge sympathy for those who have worked on the drafting on the Bill, it would not be the first Bill that has come back with errors and drafting issues because it has been prepared in haste. We have also seen that with some of the financial services statutory instruments that have gone through. I am very concerned that this has been done so hastily that we will not find out what the errors are until the UK Government come back to fix them later.

The Northern Ireland provisions have huge complexity and give significant powers to the Treasury to define in regulations the goods that are “at risk” of being moved into the EU. The Minister confirmed yesterday that we do not know exactly what those at-risk goods are, which causes huge uncertainty for those moving goods in and out of Northern Ireland. As the hon. Member for Oxford East (Anneliese Dodds) said, that has a chilling effect on businesses that want to transact their business as normal, but just do not know what it is that they are being expected to prepare for.

The letter that we received earlier from the Financial Secretary to the Treasury confirms that changes to the regulations will be made under the negative procedure, so this House will have no ability to further scrutinise them. The same is true of Stormont and it is crucial that we hear Stormont’s views on these regulations and the effect of them.

“Take back control,” this Government said. Well, it seems that most of the control is either going to the Treasury or to officers in HMRC. All these regulations are being put forward in such a way as to remove scrutiny and to remove control. Throughout the letter that we received earlier from the Financial Secretary to the Treasury, references were made to the use of the negative procedure and, curiously, to powers that there are no plans for the Government to use. It may not be the plan now to use them, but even the best laid plans gang aft agley, as happens so often and so wildly with this Government. How will the scrutiny work should the Government decide to make these changes? Lots of powers are being hived off, as we can well see. The amendment tabled in my name and the names of my colleagues attempts to redress some of the democratic deficit in the way that the Government are conducting themselves.

The affirmative procedure, as with many procedures in this place, is not perfect by any means, but at the very least this would make the UK Government come to this House to explain the reasons for their actions and to be scrutinised on their thinking, rather than just making changes that will make a real difference to the lives and livelihoods of people across these islands and more widely. Changes should not just go through on the nod.

The withdrawal agreement has the consent mechanism for Stormont, which will kick in only at the end of 2024. The UK Government must explain how their engagement will operate on all the mechanisms between then and now. This matter is horribly complicated and my sympathies are with all those who have to operate under these very difficult circumstances. So much of the uncertainty is also swathed in huge amounts of red tape. The red tape that the Brexiteers claimed they were going to remove will now be wrapped around Northern Ireland.

I received very little by way of reassurance from the Chancellor of the Duchy of Lancaster in his statement and his responses to Members earlier today. Too much is uncertain, and a lot of it is mince. The derogation in chilled meat, sausages, mince and unfrozen prepared meals is one such aspect. [Laughter.] Keep up, keep up! RTÉ’s Tony Connelly notes that when the as-yet-to-be-determined derogation period expires, supermarkets in Northern Ireland will need to source products locally or from the Republic of Ireland. That may well be good for those producers and good luck to them, but a clear competitive disadvantage is being placed on food exporters in Scotland, Wales and England and that cannot be justified by the Government.

The trusted trader scheme itself is subject to review three and a half years after the Northern Ireland protocol begins, but what mechanisms exist to hold it to account in the meantime to ensure that it is effective and that it does not have a distorting effect, which we suspect that it may do? What is in place now to ensure that there is not a further panic in a couple of months’ time due to a lack of qualified staff to carry out checks for export health certificates? Given the propensity of this Government to hand in their homework late if the dog has not already eaten it, what concrete assurances can they give?

I turn now to enforcement. The Prime Minister could not answer the question earlier from the Leader of the Opposition on the existence, or otherwise, of 50,000 customs agents, and the Minister today could not answer the same question from the hon. Member for Oxford East. I want to know a bit more about these customs agents. Where are they? How many of them are there? Will they be prioritised for the big ports in the UK, or will the Government run the risk of leaving the door open to smuggling and tax-dodging via the short straits? As the hon. Member for North Down (Stephen Farry) mentioned earlier, there is a risk of criminality as well as just of error.

What assessment have the Government made of the competitiveness of our export businesses with reference to schedule 3 of the Bill? If customs charges now apply, surely it will make it more difficult for people to export as well as to import? This is a general concern that has been raised by my hon. Friend the Member for Aberdeen North (Kirsty Blackman) on multiple occasions. It presents an extra hassle for small businesses as well as an extra unanticipated expense for consumers. I give the House a small example. I ordered a necklace some time ago from the United States and when it arrived a huge customs charge was slapped on it. Had I known about it before I had ordered it, I might not have ordered it, given the scale of the charge. Consumers do not know what they will end up with if they order something online. When we see something online, we see what the price of it is and what the postage is, but we do not see that customs charge, which is really not transparent. The earrings that I am wearing today are from a small business based in Slovenia, which was able to send them with no additional charges because we were a member of the European Union. Some 70% of Irish online purchases come from the UK. I want to know from the Minister what the impact of the changes will be on our own businesses that wish to export to the Irish Republic.

[Andrew Griffith (Arundel and South Downs) (Con)]

The hon. Lady makes an almost persuasive case about the difficulty of fragmenting a customs union that has been in place for only 40 years or so. How much more difficult would it be to fragment the United Kingdom, a customs union that has been in place for centuries?

[Alison Thewliss]

The hon. Gentleman makes a good attempt there, but the issue is really the UK Government and their incompetence in dealing with all these issues, which could well have been anticipated, as well as in taking us out of the large trading bloc on our doorstep from which we have benefited for 40 years and from which our businesses have been able to export their goods. We in Scotland have been able to export our food and drink very easily, very simply and without any barriers. These are barriers that the UK Government wish to put in place—and if they wish to put them in place with an independent Scotland, that is their choice, not ours.

Taxation (Post-transition Period) Bill

Andrew Griffith Excerpts

Committee stage & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Wednesday 9th December 2020 Commons Chamber

[Alison Thewliss]

That is absolutely fine. I wish to speak to the amendments in my name and the names of my hon. Friends.

As I outlined on Second Reading, I have real concerns about the scrutiny aspects of the Bill. It is a thick and substantial Bill that gives substantial powers to the UK Government to move things through this House under the negative procedure, which gives very little opportunity for us or anybody else to scrutinise their proposals. We wish to see the proposals come under the affirmative procedure wherever possible, to allow extra scrutiny of the Government.

As I said, I am very concerned about the letter that the Minister sent to Members. It talks about a huge range of duties that the Government are creating but that, at this moment, they do not intend to use. I question why they are creating such duties if they do not intend to use them. At some stage perhaps they will use them, so we need a mechanism to scrutinise them. It is unfortunate, but perhaps not surprising, that the Government see taking back control as bringing it back from bureaucrats in Brussels to give it to bureaucrats in Whitehall, bypassing this place altogether. It should have been an opportunity for this place to get more powers to scrutinise such duties, but no; it all goes to Her Majesty’s Revenue and Customs or to the Treasury, and very little comes here or indeed to the Committees of this House. There should have been an opportunity to look at the new taxation structures that we are bringing in here and that we have responsibility for in this House, but the Committees of this House will not get the opportunity to scrutinise these measures either. I know that some have suggested that an additional Committee would allow that scrutiny to be made.

I very much support what the right hon. Member for Wolverhampton South East (Mr McFadden) said and the questions he asked. We are dealing with complex supply chains when we talk about the movement of food, chemicals and manufactured goods. In my constituency and in the constituencies of some of my colleagues, for example, we have manufacturers of leather, who move raw hides from Ireland to the west of Scotland. They need to know how they will be able to move these goods through different territories, as they really should not be left hanging about for any length of time; they need to be moved quickly to where they are processed. We do not know whether they would fall under what the Government have termed “at risk goods”. It is not surprising that businesses are tearing their hair out with this shambles of a Government, because they do not know whether they will be able to continue with their business come the turn of the year.

There is also the cost and the red tape, whether it is the 265 million customs forms that will need to be filled out compared with the 54 million now, or whether it is the issue of rebates and the processing of fees and money. This is the end of the transition period, but we do not know what we are transitioning to. We certainly know what we had and what we will not have any more: free and unfettered access to a huge market in Europe. We do know that we are losing that, but we do not yet know what the Government’s plans are.

Despite the Government’s attempts to reassure us, concerns remain. Aodhán Connolly of the Northern Ireland Retail Consortium, while acknowledging the progress that has been made, said of the delays:

“We are just 22 days out and retailers are still unsure about the exact processes needed to move food to Northern Ireland. Therefore, the Government needs to assure them how this will be done without additional bureaucracy.”

There are real concerns about the cost and the choice of food that people of Northern Ireland will have if we do not get this right.

The point that I made earlier about customs charges and duties was reflected in an item on RTÉ at about 2.30 this afternoon. It said that customers in Ireland will be faced with VAT and customs duty from 1 January if buying goods from the UK worth over €22. That is significantly lower than the levels that were spoken about earlier. It was said that the Irish Revenue has no way of knowing whether consumers will continue to buy from the UK when additional charges apply. I ask the Minister to consider this and to do some studies on whether these additional charges will have an impact on people in this country who make good-quality goods and export them to Ireland. A total of 70% goes to Ireland, and we need to have some certainty from the Government about the long-term impact.

The scrutiny mechanisms that we suggest give us ample opportunity to do that at every stage of this process, not just today while we are considering this Bill, and then putting it in a box and leaving it, but on an ongoing basis. This Government definitely need to be held to account.

The First Deputy Chairman of Ways and Means (Dame Rosie Winterton): I believe that the Members who were numbers five to 11 on the call list spoke in the earlier debate and have withdrawn from this one, which means that we go straight to Andrew Griffith.

[Andrew Griffith (Arundel and South Downs) (Con)]

It is a pleasure to speak under your chairmanship, Dame Rosie.

I welcome this set of pragmatic measures. The Bill is a building block on the way to regaining our national self-determination in this very important area. I will oppose the amendment, although not on the principle— greater scrutiny and giving business greater certainty are things that I hope that those on both sides of the House can support. However, we should recognise that we are in a fast-moving environment. The Treasury team have been working incredibly intensively in the context of the pandemic and I think it is unfair to impose on them a specific timeframe when I know they will—perhaps the Minister will address this point—use their very best endeavours to give the very greatest amount of certainty as quickly as possible.

I follow the hon. Member for Glasgow Central (Alison Thewliss), who I have to say takes something of an 18th-century approach to customs, borders, forms and tariffs. The reality is that, as my right hon. Friend the Member for Wokingham (John Redwood) said earlier, we are in an age of online forms and digital electronic surveillance. Any good that passes across any internal or external border is tracked through a multiplicity of different technologies. I made the observation to the hon. Lady that of course when one introduces any customs border—this is one reason why Government Members are so keen to keep our United Kingdom together—there is an added level of complexity, but we should not overstate the complexity or understate the ability of business to innovate and deal with that.

[Alison Thewliss]

I thank the hon. Gentleman for allowing an intervention. Is he aware that we were told in the Treasury Committee that the UK could have adopted the French customs system, which was up and running before ours? Ours is not ready, as the Business, Energy and Industrial Strategy Committee heard yesterday. Technological solutions exist, but they do not exist in the UK, and we do not have them up and running to get this moving by the turn of the year.

[Andrew Griffith]

I beg to differ with the hon. Lady. There will be different systems for different territories, but on the business side of things there is already sophisticated tracking of stock, sales and data, which can be used to feed into accounting systems.

What I really want to do is to celebrate—I hope that those on both sides of the House can do that—the absolute game-changer that is contained within clause 7 to crack down on the leakage of the important tax revenues that fund our valued public services, and, most importantly, to create a level playing field for the nation’s small and online retailers. That has needed to be addressed for far too long. I welcome the Minister to his place and what clause 7 will do for the enterprising small businesses of our nation.

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

Dame Rosie, what a delight it is to see you in the Chair, metaphorically if not actually.

It is a measure of the wide gulf between the House’s professed intentions and its actual activities that we are about to wind up within a very few minutes, and nothing like to time, the scrutiny of the Bill in Committee. I thank those who have spoken. Let me do service on my part by keeping my remarks brief, although I will say that nothing could have surprised me more than that my hon. Friend the Member for Stone (Sir William Cash) will not be taking the opportunity to make a trivial two-hour speech.

The right hon. Member for Wolverhampton South East (Mr McFadden) said that somehow the Government were pretending there was no change. Of course, he then went on to say that nothing has changed. We are not pretending anything. We acknowledge that there is change and that is specifically why we have used the language we have of making the changes as easy and as frictionless as possible for all parties concerned.

The right hon. Gentleman raises concerns and questions about Northern Ireland. I remind him that the Trader Support Service, which was launched on 28 September, has 18,000 subscribers already. He asks us to publish guidance. I can tell him that guidance has been published already, on 26 October.

The hon. Member for Glasgow Central (Alison Thewliss) saw Brexit—rather helpfully—as an opportunity to return powers to Parliament. How right she was. That is why I am a supporter of the United Kingdom of Great Britain and Northern Ireland, and of the Parliament that stands at its centre. My hon. Friend the Member for Arundel and South Downs (Andrew Griffith) rightly said that it should be for the Bill to make matters as easy as possible. I agree with that. He pointed to the absolute game-changer in clause 7. I agree with that too.