Duties of Customs

Anneliese Dodds Excerpts

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

[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?

--- Later in debate ---

[Anneliese Dodds]

I am grateful to my hon. Friend for her helpful intervention. As she will know, the Labour position is that we want to leave all possibilities open. We think that is an appropriate approach to take. [Interruption.] I see Government Members laughing at that. We are in a negotiation where it is surely absolutely essential that we put Britain’s interest first and that means not taking options off the table. Sadly, the Government did that very early on and caused an enormous amount of bad will from our other EU partners, which we regret enormously. They should not have done that.

If the worst does happen and the Government lead us—through their lack of application and, frankly, the internecine squabbles on the Government Benches—to leave the EU without a trade deal, the rules of the WTO leave us no option but to trade with our European partners on the same basis as we trade with all countries with which we have no free trade agreement. This is the most favoured nation principle at the heart of the WTO: that there must be no arbitrary discrimination between trading partners of a similar developmental status, unless those countries have negotiated a free trade agreement that meets the WTO’s definitional requirements.

If we were to adopt amendments that allow the UK Government to set customs duties on imports and exports from every other country in the world but not our European neighbours, in the case of a chaotic no-deal situation we would be faced with two unpalatable options. First, we could disregard the most favoured nation rule, in which case we would be exposed to virtually limitless potential dispute challenges from all other WTO members. The second option is abiding by the most favoured nation rule, but that would mean having to trade with all other countries on the same basis as we traded with the EU—namely, as the amendments would have it, without tariffs or quotas. Some Conservative Members and groups, such as the so-called Economists for Free Trade, would wish for such an outcome—a unilateral abolition of tariffs and all other trade barriers—freely admitting that such a scenario would see the end of manufacturing in the UK, as well as the end of agricultural production and the concomitant loss of millions of jobs.

[Mr Leslie]

I hear very much my hon. Friend’s argument, but would she acknowledge that this is a paving Ways and Means motion seeking, at this snapshot in time, to circumscribe the scope of the Bill to ensure that we can replicate the current customs union? Should we have, at some hypothetical point in the future, that crashing-out scenario, Parliament could address that at that point, and so at present the amendments from my hon. Friend the Member for Edinburgh South (Ian Murray) are absolutely pertinent to the message we need to send to the Government.

[Anneliese Dodds]

I am grateful to my hon. Friend for his question, but the problem is that the Government’s stated intention with these motions—they have said it time and again—[Interruption.] May I finish my point? They have said time and again that these motions are about our future relationship with the EU. I am afraid that they do not see them as part of a negotiation that might change. I would hope that generally the Government would be far more open about their negotiating position—

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Answer the question.

[Anneliese Dodds]

I just have, if the hon. Gentleman doesn’t mind. The Government have stated that the motions are about that future relationship, and so we have to take them at their word, even if we might have been mistaken in doing that on other issues.

It has been suggested that, if the Government recover a sense of responsibility and sincerity and genuinely engage us in negotiations, albeit after wrongly ruling out a customs union with the EU, it could involve the adoption of deals similar to CETA or the Turkish deal. Now, CETA does not cover agriculture, so if we get a deal on industrial goods procurement and so forth, we might then need, concomitantly, still to have a deal on the protection of sensitive agricultural products, so we would need to have those powers still there. The Turkish bespoke deal, for its part, still necessitates anti-dumping and countervailing duties on both the Turkish and the EU sides.

To conclude, we have to be clear about what amendments (e) and (f) ask for. They do not, in and of themselves, guarantee that the Government will seek continued customs union membership, because they would apply across the piece of whatever arrangements the Government lead us to.

[Ian Murray]

I have tremendous respect for my hon. Friend and the work she has done on this, but if she disagrees with the technical aspects of my amendment but agrees with the principle of staying in the customs union, where are the Front-Bench amendments to do that?

[Anneliese Dodds]

I am a new Member and I do not know how appropriate it is to talk about which amendments have been allowed and which have not. Ultimately, we are seeking a more democratic process, but we cannot vote on that, which is unfortunate. My hon. Friend will know, as will other Opposition Members, that, as I stated before, the Labour Front-Bench position is to leave all options on the table. That is the best thing for Britain to do. It is very unfortunate that the Government have failed to do that, because it is enormously damaging to our negotiating position. I very much regret that the Government still could, irresponsibly and recklessly, lead us towards a no-deal scenario. In that case, these amendments—sadly—would worsen our situation. I know that that is not his intention—quite the opposite—but as stated that is technically what they would lead to.