Taxation (Cross-border Trade) Bill

Anneliese Dodds Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

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

A happy new year to you, Mr Speaker, and to all hon. Members in the Chamber.

This Bill and the Trade Bill, which we will consider tomorrow, could have a significant impact on Britain’s future prosperity. By determining arrangements for governing cross-border trade, customs duty and tariffs, they will decide how our country governs its commerce with the rest of the world. Sadly, as the Bills reveal, rather than proceeding with the task in a transparent way, the Government are again using Brexit as an excuse to allocate themselves more powers, which is incredibly dangerous. Decisions about trade can create jobs, but can also, of course, destroy jobs.

We have heard powerful contributions from Opposition Members. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) talked about the beef and dairy sectors, and my hon. Friend the Member for Coventry South (Mr Cunningham) talked about vehicle manufacturing. My hon. Friend the Member for Sedgefield (Phil Wilson) talked generally about manufacturing and the danger of an ill thought through approach, given the impact it could have on jobs.

It is surely a fundamental principle that there should not be taxation without representation. As is recognised in the very name of the Bill, customs charges and duties, as well as import and export quotas, are effectively forms of taxation. Rather than enabling proper scrutiny and debate on decision making in this area, we see here the same trick that has repeatedly been evident with the European Union (Withdrawal) Bill and the last two Finance Bills: more power to the centre and less power for Parliament. Many concerns about that point were eloquently expressed by Opposition Members, particularly by my hon. Friend the Member for Nottingham East (Mr Leslie) and my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper).

Labour has four core objections to the Bill that motivate our reasoned amendment, and I will run through them briefly in turn. First, there must be much more parliamentary oversight of our future customs and tariff regimes. We will table amendments in Committee to set out workable arrangements to ensure that governmental decisions are subject to appropriate parliamentary scrutiny and, in particular, why the Government should use amendable resolutions, not ministerial fiat, when deciding important issues such as changing customs tariffs, preferential rates for different countries and remedies for different international trade disputes. Only in that way can Parliament exercise its voice so that parliamentarians whose constituencies could be significantly affected by ill thought through measures can challenge those measures in this place.

I underline that only Labour’s reasoned amendment stresses the need for this, our British Parliament, to prevent yet another wholesale land grab by the Government, in this case on customs duties, charges and quotas—I hope that answers the point made by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith). It is only Labour’s reasoned amendment that concisely and clearly underlines this democratic deficit. In that regard, we heard prescient points from the hon. Member for Amber Valley (Nigel Mills), who indicated how some of these measures might be overreaching in their scope. He also made important points about Northern Ireland and Ireland that were echoed by many other colleagues.

Labour’s second problem with the Bill is that it fails to offer businesses and manufacturers the certainty that they desperately need about the UK’s future customs regime. That was pithily expressed by my hon. Friend the Member for Wirral South (Alison McGovern), who set out how, despite some of the perhaps ill thought through noises off from Conservative Members, the reality for many British businesses is that the vast majority of their trade is going to be with the rest of the EU. We therefore need a serious debate about our future customs arrangements. Of course, as was underlined by my hon. Friend the Member for Ilford North (Wes Streeting), our relationship with other countries is often governed by our relationship with the EU, because trade and customs arrangements are currently set through the EU.

On the problem about the lack of certainty for industry under the Government’s proposals, my hon. Friend the Member for Bootle (Peter Dowd) hit the nail on the head when he said that this Government’s current approach is simply to pat Parliament on the head and say, “Everything will be all right. Don’t worry, it will be all right on the night.” I often enjoy the Minister’s contributions, which tend to be detailed, but he used a strange formulation when he spoke about this point earlier. He said that the Bill—I hope I am quoting him word for word—will “facilitate whatever the will of Parliament ends up being”. The point is that in these negotiations, unfortunately, we are not talking about the will of Parliament, because the Government have in many cases ignored our will. Instead we are talking about what the will of the Government happens to be, and it seems to be one that they want to exercise as freely and unaccountably as possible.

I felt that we got a bit of a reality check from some of the Minister’s other comments. When he was talking about VAT, we heard something that contradicted that previous statement. He said that after the passage of this Bill, it will be up to the Government to decide exactly where we end up on what VAT arrangements will be for British businesses. We are therefore talking about the Government determining taxation arrangements without a proper parliamentary process. On VAT, I was pleased to hear my hon. Friend the Member for Walthamstow (Stella Creasy) again doggedly pursuing the issues she has raised many times about the lack of certainty for small businesses on VAT, given the Government’s current approach.

The Minister said it would be “possible” to have continued engagement with the EU on VAT, but we are not talking about possible or potential businesses; we are talking about real businesses that could have real cash-flow problems. As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) said clearly, businesses need certainty and they are not currently getting it.

Labour is also concerned about the burden of these new approaches on customs arrangements for HMRC, which, as we know, is already struggling to deal with its existing tasks, even without the upheaval caused by a potential new customs arrangement. Since 2010, one in six HMRC staff has been lost, and we urgently need the Government to recognise the need for a better resourced HMRC in their proposals. That point was forcefully made by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty).

Finally, Labour is of course deeply concerned about the Government’s untried, untested and undemocratic approach to trade remedies. As a former MEP, I have seen for myself how the British Government seem keen to push for EU markets, including the UK’s, to be opened up to unfair competition from countries unwilling to hold to trading and human rights rules as part of the debate on most favoured nation status for China. My hon. Friend the Member for Aberavon (Stephen Kinnock) expressed his legitimate concerns about the Government’s approach, given the importance of the steel industry to his constituency. That industry has already suffered substantially because of dumping. Similar points were made eloquently by my hon. Friends the Members for Stockton North (Alex Cunningham) and for Stoke-on-Trent Central (Gareth Snell). Again, we see the Conservative Government trying to push through new measures that would disadvantage our industries.

The new authority will be debated in more detail tomorrow, but this Bill gives it its powers. It is essential that the body is truly independent and representative of our economy, and that it is staffed not by chums and ideological bedfellows, but by those who know how trade really works: British businesses; our trade unionists, representing workers; and those from the devolved Administrations who can reflect the specific challenges they face. The Trade Remedies Authority cannot be a creature solely of the International Trade Secretary. It should be accountable to Parliament so that parliamentarians can reflect the concerns of our constituents. Disturbingly, we already see that the parameters for the new trade remedies regime set out in this Bill are far weaker than those that even the EU itself is moving towards, and certainly than those exercised already by comparable countries.

We have heard many excellent speeches from Members on both sides of the House, but I particularly want to say how welcome it was to see my hon. Friend the Member for Redcar (Anna Turley), with her typical energy, advocating the interests of her constituents in this debate. Many of us, particularly Labour Members, have tried hard to say how we really need a customs regime that is accountable and workable, and that favours the interests of not only consumers, but producers—Great British producers. The Government’s proposals do not remotely measure up to that mark, so I hope that hon. Members will support Labour’s reasoned amendment.