Duties of Customs

Angela Smith Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Ian Murray]

I am glad my hon. Friend makes that point because the Scotch whisky industry is not just a Scottish industry. It is a UK-wide industry involving bottling, packaging and delivery companies—a whole UK supply chain. If the main driver of that supply chain, which is the whisky coming out of Scotland, is disturbed, the jobs in my hon. Friend’s constituency are potentially disturbed, too.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Much though I enjoy a decent malt whisky, the impact of leaving the customs union would be far greater. If we take into account the agriculture, defence, aerospace and automotive industries, it is clear that if we do not get this right, the impact on complex supply chains in the integrated European Union marketplace could severely disrupt the UK economy.

[Ian Murray]

That is why the three motions before us tonight, the customs Bill, the Trade Bill and the European Union (Withdrawal) Bill are so important.

--- Later in debate ---

[Ian Murray]

That is indeed the case. The Comprehensive Economic and Trade Agreement between the EU and Canada has been held up as a blueprint for what world trade agreements should look like in the future, and we look as though we are just about to walk away from it because we want something better. If there was something better, I am sure Canada and the EU would have negotiated it. I was aware of my hon. Friend’s question, because I was sitting behind him when he posed it to the Secretary of State for Exiting the EU during Brexit questions. I thank him for his intervention.

I would like to set out the three reasons why I tabled my amendments. The first reason chimes with what my hon. Friend the Member for Bootle (Peter Dowd) said from the Opposition Front Bench about Parliament having a say. “Taking back control” became the strapline for the leave campaign during the EU referendum. If taking back control is truly what we wish to do—I think that it is what the public wishes us to do—it should surely mean taking back control for this Parliament. Whether through the European Union (Withdrawal) Bill, which is going through the House at the moment, this Ways and Means motion or the customs Bill when it is published, Ministers will hold the power to do anything they want, carte blanche—on trade, tariffs, immigration and removing us from the EEA and the customs union—without any recourse at all to this House.

In the past six weeks or so, the Government have been championing a meaningful vote—whatever a meaningful vote would mean—that would be neither meaningful nor even a vote. The Government’s position on what it means is never the same from one day to the next. Indeed, a couple of weeks ago they made three clarifications on one day, with the Secretary of State and the Prime Minister saying contradictory things. Their spokespeople had to correct what they had said, as they had both been incorrect.

We need greater clarity from the Government, rather than platitudes from the Minister, on what they want to do. Lord Callanan has had to make two statements to correct what he said about article 50 in the other place just a few weeks ago. We need answers to these questions. Opposition Members are very doubtful about whether we can trust a Government who say, “We’ll take the power. We may not use it. We may use it. We need to use it. We need to have it in case we want to use it, but trust us everything will be fine.” Unfortunately, trust has to be earned. The Opposition are being told clearly that they cannot trust the Government to do things properly on our behalf, because they are not able to do so. My first point, therefore, is to ensure that that power is not held by Ministers. We should give Parliament a say if we truly want to take back control.

That leads on to my second point. Nobody in this House, when we get to the end of this process, will ever have voted on leaving the customs union. Nobody will ever have voted on leaving the single market. Nobody will ever have voted on leaving the EEA. The people of this country voted to leave the European Union. When we start to work through the process and see how complicated it is—how difficult it could be for businesses, and all the challenges, barriers and hurdles that will be put in place—it is quite clear that nothing can be as good as what we have at the moment. Whatever happens, there will be losers, but nobody voted to be poorer. It is wrong for the Government to bring this motion on excluding tariffs with the European Union, because nobody has yet voted for us to leave the customs union. The customs union is vital to this country and not just for businesses on the UK mainland—I will come on to comment on the island of Ireland shortly.

My third point, and the main reason why the motion should be defeated or at least amended, is that the Government are clearly preparing for no deal. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said that a former Minister will make a speech tomorrow saying that the Government should be persuaded to prepare for no deal. It seems that the talks are stalling. The clock is still ticking, but they seem to be no further forward. The Brexit Secretary and the Foreign Secretary seem to have the attitude that we can wrap ourselves up in a Union Jack, ride the waves like Britannia used to and everyone will listen to us. That is the sort of 19th century British arrogance that created many of the problems in the world today. Everything the Government are putting through Parliament is being done on the basis of preparation for no deal, which would be utterly disastrous for this country.

I am very grateful to Mr Speaker for selecting my amendments. Let me tell the House why no deal would be disastrous and why I tabled them. We have heard many Members talk about that economic impact. Our annual goods trade with other countries within the customs union is £466 billion. It has been estimated that leaving the customs union would cost £25 billion every year until 2030. If the Opposition brought a proposal to this House for the Government to consider that cost £500 billion and £25 billion every year, the word “bankruptcy” would be coming out of the Minister’s mouth every second minute. It would be irresponsible for us to do that, yet that is what is being proposed with the customs Bill and this motion.

The cost of new tariffs alone could be at least £4.5 billion for UK exports, according to detailed research, and analysis by HMRC suggests that new customs checks could increase the cost of imported goods by up to 24%. We have already had reports that there will be 17-mile tailbacks at ports across the United Kingdom. I wonder whether the Minister can remember the French customs strike and how long the queues were. They formed very quickly and the impact on local communities, let alone the perishable goods sitting in trucks, was devastating. It is okay for the Minister to suggest that we will have so many customs border checks and that we will pushing things through as quickly as possible, but the way to resolve the situation is to stay in the customs union.

[Angela Smith]

A humble bottle of fabric conditioner crosses the border of a member state four times in the process of its manufacture. Imagine how many times the components that make up a Rolls-Royce jet engine cross the border—thousands of times. On that basis, how can this country’s economy afford to even think about leaving the customs union?

[Ian Murray]

I am grateful to my hon. Friend. If I were the Minister and she made that point to me, I would just say, “It’ll be okay. We want something that’s as close to the customs union as possible. It will be frictionless. It will only take seconds. We’ve got new technologies”, but the Government are not spelling out what those are, how they will work or how a company such as Rolls-Royce, exporting and importing goods and parts all the time, would actually operate. It seems that we have to take this on trust. Well, many of the businesses around the country need certainty, because they will be making decisions very shortly about the years ahead.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

I am pleased to speak in favour of amendments (c) and (e) in the name of the hon. Member for Edinburgh South (Ian Murray). I sincerely hope that he will press them to a vote later this evening.

No one here would disagree with the need to have new customs legislation in place. Given that much of the customs legislation that we currently have is derived from EU legislation, nobody would argue with the fact that when the UK leaves the European Union that legislation will have to be replaced. However, as is so often the case in the debate about the European Union, we have moved very quickly from, “We need to have something in place” to being told that, “You will agree to put this in place whether you like it or not.” It is quite clear that there is a fundamental disagreement between—I suspect—a substantial majority of Members of this House and the Government on whether we should also be preparing to leave the customs union and the single market.

As well as paving the way for new customs tariffs, which is what this resolution is about, the resolution also implicitly paves the way for all the additional bureaucracy, all the additional infrastructure and all the additional border delays that leaving the customs union will inevitably create for every single journey of every single person and every single lorry and every single suitcase that travels to and from the European Union in future. It has been estimated that there will be an additional 548,000 customs declarations needed every day—that is six and one third declarations per second.

[Angela Smith]

I am sure that the hon. Gentleman will recognise that this particular problem will apply pretty severely to perishable goods such as food, agricultural produce and fresh fish.

[Peter Grant]

Absolutely. There are significant implications for perishable goods and, as was mentioned earlier, for the manufacturing supply chain where the goods can cross borders several times. There are also implications for medical supplies such as radioisotopes, which are useless if they are held up for a few hours at customs. That, of course, is before we even think about the massive inconvenience to travellers—either for business or leisure. Even if they have nothing to declare, they have no guarantee that they will not be on a plane when, for whatever reason, UK or French customs decide that they are going to search every single passenger coming off that plane.

We are told that in return for that, we will have this brave new world of trade deals with everybody and anybody. The hon. Member for Aberdeen South (Ross Thomson), who is no longer in his seat, harked back to the glory days of Glasgow’s place as the second city of the empire, blithely forgetting that, to our eternal shame, that empire was built on slavery. We cannot go back to the days when Glasgow was a huge trading port for tobacco, sugar and cotton because—thank God—we no longer have the slave plantations that were such an important part of that economic model.

We are not going back to the days of empire and too many virtual reality Government Members—well, there are not currently many Members on the Government Benches—need to understand, once and for all, that empire has gone. It is now partnership. Partnership means that when we are in a weakened position and the big players such as the Chinese, the Singaporeans and the Malaysians are in a strong position, we are not going to get a favourable deal from them if we negotiate on our own.

I do not want this motion to apply to goods going to and from the European Union or the customs union, because I want us still to be in the customs union. It has been made clear that that offers by far the simplest and least disruptive way of giving effect to the referendum result in June last year. The referendum, as far as the voters of England and Wales were concerned, certainly gave a mandate to leave the European Union, and we have to respect that. But there has never been a referendum mandate to leave the customs union or the single market. There was what looked to be an almost spontaneous, hasty and precipitate decision by the Prime Minister; a red line was drawn that has now painted the Government into a corner.

It is becoming clear that many of the Government’s highly plausible-sounding objectives simply cannot happen if we leave the single market. Those highly plausible-sounding objectives include the “deep and special partnership” that we are going to have with the European Union, the “continued close association” with the customs union, and the

“freest and most frictionless trade possible”

with the single market. Except it will not be as deep and special a partnership as it would if we were in the EU, it will not be as close an association with the customs union as being in the customs union, and it certainly will not be anything like as free or frictionless a trade deal as we can get by staying right where we are now in the single market.

As an indication of how much substance there is to these sound bites that the Government Whips are so fond of encouraging their Back Benchers to use, it is worth remembering that they were doing the same thing just over two years ago. But the sound bites that got cheers on the Tory Benches then, on the days when there was anybody there to cheer, were “long-term economic plan” and “Majority Conservative Government”. “Hear, hear”, they would shout. The Government’s current platitudes about easy trade deals are likely to be consigned to history just as quickly as the things that they thought would be around for a long time back in 2015.

We are now more than halfway through the journey from referendum to leaving day, and there is not one single major policy area where the Government have put forward a clear, concrete proposal for discussion. That means that on every major policy decision, the Government have taken longer to come up with an idea than 27 Parliaments—and 27 Governments will have to agree it. Putting pressure on those Governments and telling them that it is not fair to delay it will not work; they will act and speak in the interests of their people. It is ridiculous to condemn the Irish Prime Minister for speaking in favour of the interests of the people of the Republic of Ireland. That is what Prime Ministers are supposed to do. I wish that some Prime Minister would maybe listen to that.

As it stands, we are in serious danger of crashing out of the EU without a deal, but there is a simple way that the Government can avoid that. There is a simple way that they can move very quickly to clear the logjam—to avoid having interminable discussions about Northern Ireland that do not have a solution and to avoid having interminable discussions about the rights of 4.5 million citizens. Both those major problems can be substantially resolved simply by the Government having the humility to say, “We got it wrong. We have to change tack and stay in the single market.”

There is an urgent need for the Government to follow their own advice, listen to their own rhetoric and listen to the advice that the Brexit Secretary gave to the Germans last week: stop putting politics before prosperity, because it is never a smart thing to do. The Government should take the decision that they know as well as I do will prevent the worst economic and social damage of Brexit. The Government should confirm today that they want to remain in the single market and the customs union, and they should signal that intention by accepting the amendments of the hon. Member for Edinburgh South without forcing the House to a Division.

--- Later in debate ---

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I am grateful to the Minister for his introductory remarks, but I have to say that both they and the resolutions leave four important problems unresolved. Many Members have spoken to those problems today. I will speak as telegraphically as I can about them, and speak to amendments (e) and (f).

First, as many colleagues have said, the resolutions fail to ensure that the Government’s approach on customs is properly democratically accountable. The hon. Member for Aberdeen North (Kirsty Blackman) said the Government proposals were a guddle, and my hon. Friend the Member for Croydon Central (Sarah Jones) spoke eloquently about their incoherence, but I think there is an element of coherence, as stated clearly by my hon. Friends the Members for Edinburgh South (Ian Murray) and for Bootle (Peter Dowd), who highlighted the presence of the paragraph that, sadly, we see in the European Union (Withdrawal) Bill, elements of the Finance Bill and the Trade Bill. The resolutions would give Ministers the ability to vary customs duties without what we regard as proper parliamentary scrutiny, and we cannot stand by and allow that as a House that is accountable to our constituents, who could suffer greatly from that sort of action.

Secondly, the Minister would say only that we need some kind of customs association during the transition period. It is unfathomable to Opposition Members why the Government are refusing to rule in continuing customs union membership, even during a transition period, when that is what business has so clearly demanded.

Thirdly, we had very little enlightenment about the capacity of HMRC and the concrete actions the Government will take to deal with the many challenges my hon. Friends expressed so very eloquently. My hon. Friends the Members for Liverpool, Riverside (Mrs Ellman) and for Walthamstow (Stella Creasy) expressed concerns about the additional administrative burdens that will apply, as did my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). It has been suggested that the number of customs declarations could shoot up by 100%, and that is in the context of HMRC’s headcount being reduced by over a sixth since 2010. Of course, we did not have the clarification we needed about the scope and functions of the new trade remedies authority, despite my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) pushing hard on the issue.

Fourthly, we have had much discussion about the dangers of a hard border between Ireland and Northern Ireland. I can say very strongly that we on the Labour Benches do not just want an aspiration to avoid such a border, we need a cast-iron assurance and we do not have it yet from the Government.

I understand, and indeed agree, with many of the sentiments underlying amendments (e) and (f), especially as they were articulated by my hon. Friends the Members for Edinburgh South and for Nottingham East (Mr Leslie). It is absolutely right to highlight, as they did, the recklessness of the Government in ruling out membership of the customs union as part of our future relationship with the EU. I am concerned, however, about how the amendments would interact with WTO rules, not least because of the Government’s disturbing unwillingness to rule out leaving the EU without a deal. The amendments would apply regardless of the future customs model. The scope is not restricted, as currently drafted. We on the Labour Benches have repeatedly indicated why leaving the EU without a deal would be a huge blow to British businesses and British jobs, yet the Government have failed to rule out this eventuality and their existing negotiating approach does not inspire confidence—quite the opposite.

[Angela Smith]

May I read my hon. Friend’s comments as a statement that the Labour Front Bench does support staying in the customs union, but on technicalities will not support the amendment? Do Labour Front Benchers support staying in the customs union?