Customs and Borders

Antoinette Sandbach Excerpts

Thursday 26th April 2018 Commons Chamber

[Yvette Cooper]

May I make some progress first?

Three specific objections to a customs union tend to be presented. First, people say that we do not need a customs union because there are alternatives, usually based on new technology. Secondly, they argue that we will be better off outside the customs union, and that being outside is a price worth paying for the benefits that we will enjoy as a result. Thirdly, they make an emotional appeal, claiming that it is somehow at the heart of our sovereignty or the Brexit vote. I disagree with all three counter-arguments, and I will deal with each of them briefly.

Let me deal first with the claim that a customs union is not needed and we can solve everything with new technology instead. So far the Government have put forward two alternatives: a customs partnership and “max fac”, which seems to be the latest name for a streamlined arrangement described as “maximum facilitation”. The customs partnership—to be honest, I had to struggle to get my head around it—seems to involve our collecting EU tariffs at the border, tracking products, and then paying some of the money to the EU. I understand that both the Secretary of State for Exiting the European Union and Brussels have agreed that it is unworkable. It is quite a triumph for the Government to have come up with a proposal whose unworkability has managed to unite Brussels and the Brexit Secretary and those whom he defends.

The alternative is speeded-up customs arrangements at the border. The idea is that all the customs forms would be filled in online, customs checks would be carried out at the trader’s own premises rather than at the border, and there would be cameras and automated number plate recognition. An extreme version of that was proposed by the Financial Secretary, who compared it with the congestion charge between the Islington and Camden borders.

Let me be clear: I think we could do a great deal more with new technology at our borders. In the interests of trade, we should be improving the technology, and the use of technology, at our borders and at borders throughout Europe and the world. However, there is still a limit to how far we can go. First, it will take a long time and a lot of investment to roll out many elements of the technology. Secondly, in the case of the congestion charge, the cameras identify only the cars, not what was in them, so cameras do not solve all the problems involving checks. Thirdly, we would have to rely on the willingness of France, Belgium, Ireland and other countries to provide the same level of investment in the technology at the same pace.

The proposal also assumes a higher level of tolerance of smuggling and evasion of tariffs. The Prime Minister, for example, has suggested that in Northern Ireland 80% of trade—the micro, small and medium-sized businesses—could be exempt from all checks. That level of exemption would require agreement with other countries. There is also the question of how enforcement would take place to ensure that there was no systematic evasion of tariffs.

[Antoinette Sandbach (Eddisbury) (Con)]

Would that not also be in breach of World Trade Organisation rules? It would require exemption in all the most favoured nation states, effectively creating a massive inability to monitor huge amounts of goods coming into this country.

[Yvette Cooper]

The hon. Lady is right. It raises huge questions about the rule of law, about how the system would be enforced, and about how it could operate in a sensible and fair way without being opened up to challenge from other areas.

Crucially, the technology approach relies on cameras. I have no doubt that part of the response at Dover will be the introduction of new automated number plate recognition and other such mechanisms. As I said to the Prime Minister before Christmas, cameras are infrastructure. If we add a whole load of cameras to the Northern Ireland border, we will still be creating the infrastructure and—crucially—the targets that the police fear will become a focus for dissident groups who want to disrupt the peace process. That, I understand, is why everyone, including the Government, has concluded that cameras at the Northern Ireland border are not a sensible solution and should not be part of our approach.

--- Later in debate ---

[Matt Warman (Boston and Skegness) (Con)]

I am delighted that this debate has been extended to 5 o’clock, but I am afraid that my duties as Parliamentary Private Secretary in the Northern Ireland Office mean that I will not be here for the wind-ups. I apologise to the House for that.

My constituency, as I have said many times in this place, voted more strongly than anywhere else in the country to leave the European Union, and I, as an individual, voted to remain. I suppose that I am therefore one of those whom the Father of the House teasingly described as someone who has undergone a damascene conversion. One of my constituents suggested that I had undergone a damascene conversion from kamikaze to life support when I voted to trigger article 50.

My starting point is the same as the point that I made when we were fighting the referendum campaign—we have to respect the result. That means that we have to define what we discussed during that campaign. In my constituency, as in many others up and down the country, the two defining points that we discussed were ending freedom of movement and being able to strike our own trade deals around the world. Those two things—although we may not have expressed it in these terms at the time—require us to leave the single market and to leave the customs union.

If we are to respect the way that people voted, it is impossible to get away from those positions, for two very simple reasons. First, freedom of movement is absolutely bound up with our membership of the single market. That point is probably more accepted by those who have called this debate than the second point. On the customs union, no one on any sensible side of the debate—certainly no one in my constituency—is arguing for a compromise in which we are unable to control our own trade policy but have to take the rules that the European Union makes. No one is suggesting that there is a compromise that both upholds the result of the referendum in allowing us to go and strike our own trade deals around the world and allows us to remain in the customs union. I simply do not see how today’s proposal would allow us to respect that.

[Antoinette Sandbach]

Many of my constituents say to me that they voted to join a common market. If there were a compromise that delivered a common market but took them out of the political institutions of the EU, they would accept that as an acceptable compromise, and it would bring together remainers and leavers.

[Matt Warman]

I would like to agree with my hon. Friend, in the sense that if the European Union were to offer an option that said, “Remain in the customs union and remain in the single market, but you don’t have to have freedom of movement and you do have the ability to go and strike your own trade deals”, then a lot of us would think that that was a very attractive move. However, that would make it a better deal to be outside the EU than to be in it.

I simply do not see how it is a sustainable, coherent position to think that the European Union would offer us that sort of compromise, so we have to live, as Opposition Members have so often said, in the real world. That requires us to say that people did not vote for the European Court of Justice to continue to have its rulings being valid in this country when we play no part in that organisation, and people did not vote for us to have no remedies on our trade policy. What people voted for, whether some in this place like it or not, is a clean break, because that is what allows us to have the control that they wanted. Many Conservative Members accuse the Opposition of trying by subterfuge to force us to remain in the European Union. However, the more we pursue the line that we can remain in the customs union but also do our own trade deals, the more we not only undermine faith in the referendum result overall but undermine faith in democracy as a whole, and we have to preserve that above all else.

--- Later in debate ---

[Antoinette Sandbach (Eddisbury) (Con)]

I have a confession to make: when I voted in the 2016 referendum, I did not spend a great deal of time thinking about the customs union, rules of origin or other such matters. In that regard, I suspect that I am not alone in the House or in the country. I do not believe that many people gave a lot of thought to our place in the customs union, because very few leave campaigners mentioned leaving it. Indeed, one of the few direct references that I could find was in an article from 2012 in The Mail on Sunday, in the name of the now Secretary of State for International Trade. A copy of the article is still on his website as I make my remarks. He wrote:

“I believe that the best way forward is for Britain to renegotiate a new relationship with the European Union—one based on an economic partnership involving a customs union and a single market in goods and services.”

That sounds like a good way forward for my constituents, and I want to make a similar case today.

The last two years have been a crash course in customs and borders policy. At the centre of my education has been the Business, Energy and Industrial Strategy Committee, of which I am a Member. My view is that in this House we should make policy based on evidence. I urge my hon. Friend for South East Somerset to read some of the reports. I understand the importance of the fishing industry to her constituents, and she needs to understand the importance of the chemical, pharmaceutical and car industries to the north-west. The reality is that if we do not negotiate some form of agreement that leads to a European economic area-style—

[Mrs Sheryll Murray]

It is Cornwall, not Somerset.

[Antoinette Sandbach]

I apologise to my hon. Friend the Member for South East Cornwall (Mrs Murray)—I am corrected.

Pharmaceuticals, car manufacturing, agriculture, food manufacturing, the energy sector and the nuclear sector are absolutely key to the north-west. The Government’s own analysis shows that if we do not have an EEA-style agreement, there will be a 12% reduction in GDP growth in the north-west. If I am to represent my constituents, I have to vote in a way that supports their interests—that is what I am elected to do. A decision was taken to leave, but the question of how we leave was delegated to the House. I am not a delegate; I am a representative for the interests of my constituents.

[Anna Soubry]

Does my hon. Friend share my concern that so many Members do not even know what the customs union is? For example, while we have heard today that there are no other customs unions in the world, there are 12. As for state aid rules, we now know that the Government said on Monday that they would adopt all the state aid rules that we currently have as a member of the European Union.

[Antoinette Sandbach]

I am grateful for my right hon. Friend’s intervention.

Let me explain why the customs union is so important. There is evidence that the crankshaft of a Mini crosses the English Channel three times on a 2,000-mile journey before the car is even finished. It is first cast in France, before being sent to Warwickshire to be milled into shape. Once it is complete, it is sent to Munich to be added to the engine. Finally, it is sent back to Oxford, where the engine is installed in the car.

The Chair of the Business, Energy and Industrial Strategy Committee, the hon. Member for Leeds West (Rachel Reeves), spoke eloquently about the additional costs to the motor manufacturing sector of not being party to a customs agreement. We may call it a partnership or a union, but I am not bothered about what it is called. It is the outcome that I want to achieve, and that outcome is what leave campaigners promised to my constituents: free and frictionless trade. That must be delivered, and if the way to deliver it involves leaving the political institutions of the EU while remaining in the single market and the customs union, I will support that.

As for all this guff about being a rule taker, if we want to export to any other country in the world, we must export according to that country’s rules. If other countries want to export to us, they must accept our rules. It is in our interests to have aligned rules. In fact, much of the body of our rules is global regulation, as is made clear in the BEIS Committee’s report on the aerospace sector. In many cases, we are talking about not EU standards but international standards.

Most of the countries involved in the free trade deals that have been held up by leave campaigners are covered by our membership of the European Union. If we are part of the single market and a customs union, we may be able to gain access to the 32 Commonwealth countries that already have free trade deals with the EU. It will be much easier for us to roll over our existing free trade deals, which is the Government’s aim—I support it. Only 12% of countries do not have current free trade agreements with the EU or agreements that are being negotiated with the EU. It makes absolute sense for us to consider an EEA or EFTA-style agreement that would allow us to take back control of fisheries and agriculture, provide a brake on immigration and take us out of the jurisdiction of the European Court, but would be a recognised and acknowledged partnership.

--- Later in debate ---

[Antoinette Sandbach]

My intention would not be to enter a Turkish-style agreement, and the EU has already conceded that the UK would be able to have a say, but not a veto, on future trade agreements.

[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.