Taxation (Cross-border Trade) Bill

Baroness Altmann Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 4th September 2018 Lords Chamber

[Baroness Altmann (Con)]

It is a pleasure to follow so many excellent speeches. This Bill is meant to help us deal with any outcomes that arise from our negotiations for leaving the EU. Its aim of establishing an independent UK customs regime based on the EU regime, adjusting VAT and giving powers over customs duties, makes sense if we are leaving the EU single market and customs union, although of course ostensibly—I will return to this in a moment—the Bill also gives the Government the power to establish a new customs union.

I welcome the hard work carried out in the other place by honourable and right honourable colleagues and many others to maximise the use of affirmative procedures to ensure that important taxes and tariffs are properly scrutinised by Parliament, and I welcome the Government’s acceptance of the sunset clauses—all changes called for by the excellent House of Lords Delegated Powers Committee.

Following last-minute amendments narrowly passed, by just three votes, in the other place, unfortunately the Bill before us today is poorly drafted with some worrying potential flaws. The UK, for example, is now able to enter into a customs union with the EU only if this is passed by a separate Act of Parliament. From a scrutiny and consistency point of view, this seems problematic. Why should an Act of Parliament lock be just for one territory? The scrutiny that comes with joining or establishing a customs union should surely apply equally to all territories. This amendment also means that the Bill cannot now be the conduit for the UK to be in a customs union with the EU, even if that becomes government policy. The Government would still need primary legislation, which is contradictory given that this Bill is the very primary legislation that should give the Government the power to do that, having repatriated those powers from Brussels. It is of concern that we would allow bad legislation to reach the statute. Of course, I respect the House of Lords’ constitutional role to resist amending a supply Bill, but the Government must be careful not to abuse their constitutional role.

This important piece of technical and complex legislation has been rendered incoherent and inconsistent to appease the European Research Group, while actually killing the main government proposal for customs in the process. If we wanted the EU to take the Chequers proposal seriously, it was not terrible helpful for the Government to accept the ERG’s wrecking amendments to the Bill almost immediately. The Government have said that they do not view these as wrecking amendments, but they were clearly intended as such: the EU thinks they are such and many on these Benches can see that too—indeed, many noble Lords have stated so this evening. Arguing that black is white does not change the colour.

Clause 54 is not consistent with the Government’s supposedly agreed position. Section 1.2.1 of the Chequers White Paper refers to the facilitated customs arrangement that the Government hope to enter into with the EU, and I have welcomed that as a starting point to get us to the negotiating table. It states that,

“the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.

So the Government now find themselves in direct conflict with their own White Paper. As the noble Lord, Lord Kerr, and so many others have already stated, the EU cannot be expected to do this. Worryingly, therefore, the ERG amendments are forcing us closer to no deal.

I note with disquiet the increasing voices that seemingly are willing to support no deal. Moving to a regime based on WTO rules would not be in our national interest. Let us be absolutely clear: no deal is unquestionably a bad deal. It would be disastrous for our country and, indeed, for the EU—it would be like launching an economic war on the EU. The declaration that this is “not the end of the world” is scant comfort for our country. Yes, no deal would not be as bad as nuclear Armageddon, but the British people were promised that Brexit would mean a better future. By demanding the impossible of the EU and then blaming it for not giving it to us, we cannot help our country’s future.

The Conservatives are the party of free trade. How then could we seriously be countenancing a no-deal outcome which would mean losing the great free trade deals that we currently have, not just with the EU but with so many other countries outside the EU, which our membership has delivered? Operating under WTO rules would mean that we must follow the internationally agreed norms. We would undermine our integrated supply chains and put British manufacturing at risk. This is not what people voted for.

As the noble Lord, Lord Hain, and many others have so rightly said, no deal would be disastrous for Northern Ireland and Ireland. There are no technological solutions that would allow for a frictionless and free border without a proper customs partnership—or whatever one calls it; some kind of customs union—and regulatory alignment. The lack of serious concern for this issue, and the careless statements dismissing concerns about honouring the Good Friday agreement, should, I would have hoped, be anathema to the Conservative and Unionist Party. However, the obsession with “Brexit at all costs” seems to trump all else.

The Bill is about tariffs, but what about the vitally important non-tariff barriers and rules of origin, which would hamper our trade with or without this Bill? Unless we can retain customs union and regulatory alignment, or something that delivers the same but may not be called that, it is difficult to see our national economic success continuing.

I had other points to make, specifically on various amendments, but as so many other noble Lords have expressed the same sentiments so well, I finally ask my noble friend to please relay concerns from these Benches and respectfully request that more care be taken before sending a Bill to this House in this state. It is particularly important to legislate responsibly if the Bill in question is a supply Bill or a money Bill.