Customs and Borders

Angus Brendan MacNeil Excerpts

Thursday 26th April 2018 Commons Chamber

[Yvette Cooper]

The right hon. Lady is exactly right. Where we currently have good free trading arrangements we should cherish them, because the truth is that it is getting harder to negotiate new trade deals. The politics of trade deals has become more complex, as communities across different countries become more worried about the losers and winners of big changes to trade arrangements. At a time when it could take very many years to negotiate new trade arrangements, if we pursue the idea of ripping up our existing ones before the conclusion of such negotiations it will be deeply damaging to many of our jobs and communities.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

In answer to the right hon. Member for Wokingham (John Redwood), I am struggling to think of a country that we have a ro-ro ferry arrangement with that is not in the single market—which we are going to have very soon, if we follow his direction.

[Yvette Cooper]

Unfortunately, I did not catch the beginning of the hon. Gentleman’s intervention. May I ask him to repeat it?

[Angus Brendan MacNeil]

In answer to the right hon. Gentleman, I am struggling to think of a trading partner that we have, outside of the single market and customs union, that we have a ro-ro arrangement with, and I think that would be the answer to his question.

[Yvette Cooper]

The hon. Gentleman is exactly right. Not only that, but those other countries that we might seek to get alternative trade arrangements with are further away, and when it comes to manufacturing industry in particular, geography matters—gravity matters. The best opportunities and the greatest markets will be those that are closest, especially in a world of just-in-time production where you might need to get supplies very rapidly into your factories or into your retailers.

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[Yvette Cooper]

The right hon. and learned Gentleman is right: in the end, any agreement has obligations attached to it, as well as enforcement mechanisms.

[Angus Brendan MacNeil]

Will the right hon. Lady give way?

[Yvette Cooper]

I will make this one of the final interventions. I want to deal with the objections that people have raised to a customs union, because it is important to respond to those.

[Angus Brendan MacNeil]

I am very grateful. To build on the point that the right hon. and learned Member for Beaconsfield (Mr Grieve) made, a free trade agreement in this context is highly misleading. The UK would not have a free trade agreement, but a “less trade” agreement, and when we talk about free trade agreements with the rest of the world, we mean bits of trade agreements. Trade will not be as free as it currently is in the European Union.

[Yvette Cooper]

There is no doubt about that. If we have no customs union, there will be less free trade than we currently have, and that is where the manufacturing industry is at risk.

Manufacturing is very important in my constituency, and we are very proud of having Haribo there. I have been to visit, and I particularly enjoyed doing the quality-control checks on the Starmix—we made sure that they were particularly rigorous and tried many times to make sure that the Starmix was very top quality that day. The chief executive of Haribo said clearly to me:

“If a truck loaded with materials that we desperately need to make a product is held up or not released at border control for a day or two, the worst case scenario would be production grinding to a halt”.

That is the reality.

We know, too, that this issue is particularly important for the Northern Ireland border. Ministers have rightly said that there should be no hard border between Northern Ireland and the Irish Republic or between Northern Ireland and Britain. Parliament has a responsibility to make sure that that happens.

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[Mr Clarke]

In essence, not having a veto is not having control on the outcome. An agreement would be negotiated for us that we would either have to live with or reject. There is no sensible outcome we could live with over which we have no control.

It gets worse. Turkey can sign free trade agreements with other non-European Union countries only if she has the EU’s permission—we would have to get clarity on whether that would apply in this instance. I suspect Turkey only subjects herself to such a humiliating state of affairs because she continues to hold out the hope of becoming a full member of the European Union.

The state of affairs for Britain would be far worse, infinitely worse, than remaining a member state of the European Union, where we at least have a seat at the table when it comes to our trade deals.

[Angus Brendan MacNeil]

Has the hon. Gentleman considered that Turkey might be staying in the customs union for economic advantage? Has he thought about the economics of the situation?

[Mr Clarke]

I do not believe that it is to our economic advantage. Turkey has long prized EU membership as a status symbol, but I do not believe the economics add up.

Those lobbying for a customs union know that staying in the customs union without a voice at the table would be worse than being a fully signed-up member, as was made more or less explicit by the hon. Member for Pontypridd (Owen Smith) when he said that we would need to stay in the single market as well as the customs union, which goes a long way towards revealing the true motivation of many who make this argument—they see it as a stepping-stone to undoing the people’s vote to leave.

We need to remind ourselves of why the leave campaign lobbied to leave the customs union in the first place. The EU has been slow at negotiating trade deals on our behalf, not least because there are 28 members states on one side of the negotiating table. The EU’s trade talks with Japan have taken 61 months and are still awaiting ratification. By contrast, it took Switzerland 28 months to settle its deal with Japan. EU trade talks with the US have been ongoing for 64 months now, with no sign of progress, whereas the US managed to negotiate trade deals with Canada in 20 months, Australia in 14 months and South Korea in 13 months. At the time of the referendum, the EU had managed to negotiate trade agreements with only two of the UK’s 10 largest non-EU trading partners.

Not leaving the customs union would also fatally damage the prospects for the idea that, more than any other, has captured the imagination of the Teesside public since our vote to leave. A free port at Teesport, which is a project championed by Tees Valley Mayor Ben Houchen and me, would be an enormous boost to local industry and provide a great incentive to reshore jobs to the South Tees mayoral development corporation site. That goes directly to the point that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made about north-east jobs. There has been enormous buy-in from local people and businesses to this idea, and people are genuinely excited about what it would mean. However, a free port will not be possible if we do not leave the customs union.

Some people try to maintain the argument that free ports are possible within the EU. The reality is that those zones that exist are glorified bonded warehouses—places where people can defer tax, duty and VAT. What Ben and I are saying is that within the Tees free port there will be the potential for significant tax and regulatory divergences, but that will be stymied if we remain in a customs union.

Outside a customs union there are other significant advantages.

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[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I congratulate the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) on securing the debate. I was one of the original signatories to the motion, but I had to leave that behind when I was asked to do this job of speaking for my party—I was wearing many hats at one stage.

I am sure that a lot of us have learned many things during this important debate, and that underlines what has been happening during the Brexit process. In the beginning, people did not know about or pay attention to the ins and outs. It was like a motorist who gets in a car and drives down the road happy and oblivious to the difference between a camshaft, a crankshaft and a tappet, or whatever components are in the engine, because the car works and is fine.

We now have to drill down and understand what happens at borders, which essentially do three things: tariffs, VAT checks and regulatory alignment. A customs union helps only the first of those, but it also goes some way towards helping with paperwork and rules of origin. For those who knock the idea of a customs union, I point out that there are 12 of them in the world, comprising 103 of the 193 United Nations countries. Customs unions are therefore more the norm than the abnorm.

If the UK insists on being out of the customs union and the single market, it will inevitably face barriers to trade. For those who do not believe that, a cursory glance at Google Earth will show them the barrier between Norway and Sweden, both of which are in the single market but only one of which is in the customs union. If they look at the south-east corner of the European Union between Turkey and Bulgaria, or between Turkey and Greece, they will see further barriers, because Turkey is in the customs union but not in the single market. We need to be in both.

Why are we trying to do this? We have seen analysis by the Scottish Government, which was dismissed as politicking; by the Treasury, which was dismissed as mere forecasts; and by the Irish Government, which was met with silence. Analysis shows that the damage to GDP will be 2%, 6% or 8%. To give an idea of what that means, the crash of 2008 was a 2% event for GDP. The right hon. and learned Member for Rushcliffe (Mr Clarke) said that such things had not happened deliberately in the past. He was, I think, hinting that this is being done very deliberately—damage is being done to the UK economy in the full knowledge of what will happen.

The Prime Minister has not chosen the option of membership of the customs union and the single market outside the European Union, which would result in 2% damage. She has gone for the middle option of 6% damage, or three times the economic crash of 2008 over 12 years. We have to be absolutely certain that that is fully understood and communicated more widely among the public, because there will be much wailing and gnashing of teeth when it happens. As someone who was once poor said, “I have tried poverty and it is not very good.”

The Brexiteer line that I heard from the hon. Member for Vauxhall (Kate Hoey) was that we are not in control of our trade, but nobody, by definition, is in control of their trade, because they have to deal with another partner. We certainly will not be in control when 27 other countries put up barriers to our goods, and we will have a lot less control over our trade at that point.

The right hon. Member for Broxtowe (Anna Soubry) made a number of excellent points. She talked about the idea of global Britain. May I let the House in on a secret? There is a thing called global Ireland, global Germany, global France, global Australia, global Argentina —everywhere, ladies and gentlemen, is global. On global Japan in particular, diplomats are going into offices explaining that they have put 40% of their investment into one basket in the EU, namely the UK, and they are very nervous indeed about what will happen to that investment. Outside the UK, global Japan has the biggest worry of all about exactly which direction the UK is taking.

In an intervention, the hon. Member for Bromley and Chislehurst (Robert Neill) gave the example of avionics and Specsavers. Who knew about these things? I knew about shellfish. People say that they want fantastic trade agreements with many other countries across the world, but lorries currently take shellfish from my constituency in the Hebrides to France or Spain on a journey that is uninterrupted by borders. If borders are put at the ro-ro facilities, the lorries’ journeys out and back will be delayed. We might get free trade with Paraguay, but there is no way that anyone could drive a heavy goods vehicle from the Outer Hebrides to Paraguay and back in a week. People sometimes lose sight of exactly what they are talking about. Trade does not happen on bits of paper. Trade happens because a person on my island, Donald Maclean, phones somebody in Spain and they make a deal between themselves. That is how trade works, but the Government are now putting themselves right in the middle of the trade that is happening between the Outer Hebrides and the continent of Europe, and that is going to be very damaging.

I get frustrated when I hear the Prime Minister, who has led the charge on this, saying that the European Court of Justice is not our court, but an external court. The ECJ is our court, your court and everybody else’s court. It is every European’s court, in fact. The idea that the UK and the EU are two separate entities is wrong as well. The UK is one of 28 members, and we have full access to the ECJ, just as everywhere else does.

We should also be mindful of the words of Simon Coveney, the Tánaiste and Irish Foreign Minister, because the moment might be approaching faster than we think. He said last week that if there was no agreement on the Irish border by June, everything could be off the table. The UK could crash out of the European Union a lot sooner than it thinks, because if the border issue is not sorted, no other issue will be sorted and there will be no deal. We know that the hard Brexiteers have abandoned the WTO idea because they have accepted a transition, but they might not get that transition. That could be a problem for them, but they have not yet woken up to it. Indeed, they might wake up to it too late, because the cliff edge is closer than we think. It has not been delayed as a result of the Prime Minister begging the European Union for two extra years but walking away with only 21 months.

It is absolutely incredible that the United Kingdom is taking the steps that it is taking. The right hon. and learned Member for Beaconsfield (Mr Grieve) has tried to shout to warn people and wake them up to the economic damage that is being done to the people who live in our islands. It will be worse for those in the north of England and in Scotland than it will be for those in London, but there is still going to be bad news for London. But I fear that people are not listening. They are on their ideological high horses, ignoring the facts that are staring them in the face. They are grabbing platitudes in the great hope that something will come up. The reality is that nothing is going to come up unless we climb down from a position of trying to square unsquareable circles. The UK is in a very difficult position of its own making. From my point of view as a Scottish National party member and a Scottish nationalist, we have to be referendum-ready in Scotland, because that is the only lifeboat I can see that could take us out of the economic calamity that the UK is about to force on itself.