Postal Packets (Miscellaneous Amendments) Regulations 2023

Baroness Hoey Excerpts

Wednesday 19th July 2023 Grand Committee

[Lord Weir of Ballyholme (DUP)]

The approach taken to this statutory instrument, both in this House and when it was introduced earlier this week in another place, has very much been one of, “No worries, there’s nothing to see here”. As with a car crash at the side of the road, we have been directed that there is nothing really to worry us. Indeed, in another place, the Minister tried to give an assurance that this is

“a very, very small SI”.—[Official Report, Commons, Second Delegated Legislation Committee, 17/7/23; col. 16.]

When this instrument was introduced in the other place, reference was made on four occasions to the fact that no change is being made, or words to that effect. That phrase has been echoed today by the Minister here, yet I suggest that significant changes are being made. For example, as has been mentioned, for the first time ever, parcels moving from Great Britain to Northern Ireland will be put in a separate category and categorised alongside parcels from a foreign third country. For the first time ever, the UK market is being divided between the rest of the United Kingdom and Northern Ireland, but we are told that there is no change. For the first time ever, parcels going from Great Britain to Northern Ireland will be categorised and defined in the same way as exports and imports but, again, we are told that no change is being made. These are not simply changes in processes that could be dropped at the whim of any Minister. These are being put in place directly in the law of the land via legislation.

Similarly, let us look at the wording of the regulations. The Explanatory Note makes reference to the fact that part of the purpose of the regulations is

“to make provision to apply such enactments relating to customs and excise as are for the time being in force to goods contained in postal packets sent from Great Britain to Northern Ireland, and to ensure that duties and other charges payable in connection with such postal packets are recoverable by the postal operator concerned”.

They will give directly a power to impose customs duties and a financial burden, albeit one that will supposedly be reimbursed, yet we are told that there is no real change here.

In their boast, the Government also tell us that this SI is an improvement on the protocol. In some ways it is, although we should always remember who brought about the protocol in the first place. The remarkable extent to which the Government are distancing themselves from the protocol that they negotiated is unusual in and of itself but the great boast of the Government—reiterated in both Houses—is that an individual sending a parcel to a friend or family member in Northern Ireland can do so without having to fill in customs declarations. They say we should be grateful that a granny in Liverpool is able to send something to her grandchild in Belfast. However, we should also remember that that is on the basis, as has been particularly referenced in EU legislation recently, of an exemption. The opportunity for the granny to do this is at the grace and favour of the European Union. There is a clear diminution of sovereignty yet we are told that, like grateful natives, we ought to be suitably delighted that this has been given to us.

Similarly, it has been indicated that if a business is sending a package to an individual consumer there will no customs declarations required, but I seek some information from the Minister. For a business to do that, will it have to be part of a trusted trader scheme? Also, because it is put on the same basis as freight, presumably any business-to-business supply could be only where that business is part of the trusted trader scheme.

Leaving aside the general concerns that we have with that, some movements—particularly if we talk about something that is to be moved in a parcel—may be very infrequent between two businesses in different parts of the United Kingdom. Many businesses will come to the conclusion that going through the bureaucracy of having to join a trusted trader scheme for an occasional movement of goods to Northern Ireland is simply not worth it. What we are likely to see, which is also part of the purpose of what has been put in place, is diversion of trade. People and businesses will simply seek to source from outside the United Kingdom.

It has also been indicated in another House that the new powers to be given to HMRC and Border Force are to stop illicit goods—a very accurate but misleading term—moving from Great Britain to Northern Ireland. Let us remember that we are talking about giving powers to Border Force for movements entirely within the United Kingdom—from one part of it to another. When one talks of illicit goods, it conjures up a mental image of drug packages or another form of something illegal. But the powers already exist to stop movements of those goods, so when we talk about illicit goods we are really talking about goods that contravene what the EU says. This is not for something entering the single market but within the internal UK market.

I note that the Secondary Legislation Scrutiny Committee has mentioned the question, which has not been answered particularly satisfactorily, of why, despite the fact that provisions are due to take place in 2024, these regulations are effectively being brought in now. When pressed on that in another place, the Minister gave two examples. One was: what if hazardous substances were being moved about? If hazardous substances were being moved by parcel, that should be a concern if it was moving from Glasgow to London, let alone coming into Northern Ireland. I am not quite sure why a provision needs to be put in place for that.

The other example given in another place was the risk of blood diamonds being moved. I have not had a recent conversation with my local postman. I am not altogether sure that they would tell me that they are burdened each day with blood diamonds moving from Sierra Leone or Liberia through Great Britain—because it would have to be there—and then on to Northern Ireland, with the risk of them moving into the EU. But supposedly, that is the excuse as to why these additional powers need to be given. Again, we are told there are no real changes.

Finally, in another place there was a subject of much controversy. This statutory instrument is so innocuous that the Government took the unprecedented step of removing five of their own MPs from the committee that was scrutinising it. One of the MPs said that whenever he indicated any level of scepticism towards it, he was first asked whether he would be happy enough to remove himself from the committee. When he said that he was not, he was then told, “Perhaps you want to take a week off—have a week’s holiday”. I think that MP missed a trick because, if they had held out with the Whips, perhaps the soon to be vacant post at the Ministry of Defence could have been lobbed in their direction as a reward for not being on the committee.

That is against the background that we should all be relaxed, as there is no real change. Rather than that argument, there is an equally strong argument that it changes everything for our sovereignty or is the first step towards that. I simply say to the Government that we are opposed to this statutory instrument, but it is high time that they, instead of doubling down and pretending with spin that everything is perfect, actually face the realities and make the changes that need to take place to restore the internal market of the United Kingdom. Once those changes are properly made and the union is restored, we can begin to see proper progress in Northern Ireland.

[Baroness Hoey (Non-Afl)]

My Lords, in as short a time as a few months, noble Lords will realise just how serious these regulations are. It will be the first of many statutory instruments that result from the Windsor Framework or, indirectly or directly, from the European Union’s attitude to it. As we all know if we read the Windsor Framework, and what the Government and the EU said, they are very different. Even on these postal packets regulations, it is very different.

A number of noble Lords referred to what the Secondary Legislation Scrutiny Committee said about why there is a rush—why the hurry? Why the Government want to rush this through is very straightforward. They know that, as time goes on and there is more detail, scrutiny and need to work with this in, for example, sub-post offices across the country or through customs officials, we will see that this is not right. It is not going to work. They want to get it through.

It has been mentioned, so I do not want to go into what happened in more detail. I sat through the committee on this SI in the other place, and it is absolutely shocking that our Government have so little confidence in their own Members that they had to remove five of them because they knew that they would not get their support. That was because those Members had read it. They had read it and listened, and they knew what they needed to do, because what the Government had decided was not right or good for the people of Northern Ireland and certainly not for the union.

These regulations are, without doubt, changing the status of Northern Ireland such that it is being treated as a foreign country and a foreign part of the administration of the United Kingdom. For some people, that is fine. Some people do not really care about Northern Ireland. Let us face it: there are an awful lot of Members, not necessarily in this House but in Parliament generally, who probably think, “Oh, Northern Ireland—what a nuisance. If only we could forget about it”. This is precisely what many people who do not care about Northern Ireland want to see happening—this dividing, this moving, this drip, drip, drip taking Northern Ireland further and further from the rest of the United Kingdom.

Imagine a young person coming to this country as a student, sending a parcel. The Government are saying that it will not be very different, but we know that the European Union will eventually decide whether even individual parcels from person to person will need authorisation from somewhere. That is not for the person at the moment, but someone in the sub-post office will have to get the authorisation and that is going to cost money. Who is going to pay for that? There are business-to-business costs from that. More and more costs mean more businesses in Great Britain being clear that they will not bother sending things to Northern Ireland. This is happening already and is going to happen even more.

Imagine a young student coming over here to England and deciding to send a parcel to their grandfather. They will be told that they are sending it to a foreign country. That is quite outrageous. The instrument has the same instruction for Regulations 5, 6, 9, 15, 20 and 21, namely to insert

“and all GB-NI postal packets”

after “foreign postal packets”. It is quite outrageous that people in Northern Ireland who have given so much loyalty to this country—so many people died during world wars—are now being repaid by this glibness around how they are treated.

--- Later in debate ---

[Baroness Penn (Con)]

Again, that takes me back to what these regulations do versus the wider process around how parcels will move under the Windsor Framework. These powers do not and cannot do anything to impose anything on businesses.

I come to a few of the points made by the noble Lord, Lord Purvis, about understanding and beginning to quantify how the new process will work. It is not possible to give precise numbers on volumes of parcels and how they will fall into the different lanes, because volumes are not consistent year on year. However, based on estimates and commercial information provided by the parcel industry, we understand that about 5% of parcels are sent from business to business, with 90% moving from businesses to consumers and 5% from individuals to individuals. Based on those figures, for 95% of movements no difference will be felt in how customs operate now, under the easement that we have to the protocol. Compared to the protocol itself, they will face significantly fewer burdens.

There will be no routine checks or controls applied to consignments, with interventions made only on a risk-based, intelligence-led approach. This is decided by HMRC and Border Force. We expect a very small proportion of parcels to be checked or opened, only when there is reason to suspect circumvention of the rules.

The 5% of business-to-business goods will be treated the same, as if they were moving in freight. They can access the UK internal market scheme and the green lane, and they will benefit from radically reduced checks and data requirements compared to those under the protocol. Businesses can apply to HMRC to become a trusted trader and access the green lane. It is a simple process. Tens of thousands of traders are already in the scheme, and the Windsor Framework extends eligibility to it further. New arrangements under the framework are being phased in over nearly two and a half years. We will continue to use that time to undertake extensive engagement with stakeholders, including businesses in Northern Ireland and Great Britain, trader support services and parcel operators, to provide support and ensure that everyone is ready.

[Baroness Hoey (Non-Afl)]

As part of that work, will the Government look at the extra cost to business? There will definitely be an extra cost to businesses in GB that want to send to Northern Ireland, whether they go through the green or the red lane. Those costs will eventually end up with consumers in Northern Ireland. Do the Government agree?

[Baroness Penn (Con)]

The whole purpose of the Windsor Framework is to reduce any extra costs and burdens from moving from business to business in Northern Ireland. We need to put this in the context of the figures that I gave earlier about personal packages and business-to-consumer packages which, on some estimates, account for around 95% of parcel movements from GB to NI. The aim of our ongoing engagement with parcel operators, in both GB and NI, is to make sure that this process is as easy and seamless as possible for those that rely on existing information and data, where that is possible.

Several noble Lords also raised the question of timing. As I said, provisions under the Windsor Framework are being brought in over two and a half years and will come into effect on 30 September 2024. As I said in opening, although the majority of Northern Ireland protocol requirements on parcels were not implemented as the Government sought to renegotiate arrangements, we accepted that certain categories of goods moved in parcels, as in freight, should require customs declarations to ensure that both their entry to Northern Ireland and possible onward movement to the EU were notified to HMRC.

These requirements related only to a specific list of prohibited and restricted goods that includes, for example, certain drug precursor chemicals, endangered animals, et cetera, covered under CITES. The powers we are taking now will allow those requirements to be monitored and enforced from now, and those same powers will be used in respect of the new parcels arrangements that come into effect on 30 September 2024.