Trade Bill

Debate between Barry Gardiner and Angela Smith

Tuesday 9th January 2018 Commons Chamber

[Barry Gardiner]

I am grateful to my hon. Friend, and I commend him for the article he published this morning on LabourList, which I thought was an excellent exposé of the Bill. To answer his specific question, once the UK leaves the European Union, it cannot remain in the EU customs union, because by definition when a state leaves the European Union all EU rules cease to apply to it, as set out in article 50. The customs union is an institution of the European Union; it has its legal basis in the European treaties and its functioning is set out in EU regulations.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Will my hon. Friend give way?

[Barry Gardiner]

I will happily give way to my hon. Friend once I have answered our hon. Friend the Member for Nottingham East (Mr Leslie).

As we will no longer be a signatory to the European treaties and no longer come under their territorial scope, we cannot formally be a member of the EU’s customs union. As the EU’s treaties currently stand, only EU member states, and territories attached to those states, are actually members of the customs union. However, it is possible for the UK to enter into a customs union with the EU after Brexit, whereby we choose to have a joined external tariff and no tariffs on trade between the EU and the UK. That would, in effect, mirror the current arrangements. I think that my hon. Friend the Member for Nottingham East, like me, will have been interested to find that provision to do just that was incorporated in clause 31 of the Taxation (Cross-border Trade) Bill, which we debated last night.

--- Later in debate ---

[Barry Gardiner]

I will make a little progress, because that was a very interesting diversion, but one that we will leave there.

[Angela Smith]

Will my hon. Friend give way?

[Barry Gardiner]

I will press on.

The Bill fails utterly to establish the legislative framework for the UK’s future trade policy, which it leaves entirely in the hands of Ministers. It also risks undermining the rights of the devolved Administrations through its undue centralisation of powers in Westminster. The impact assessment accompanying the Taxation (Cross-border Trade) Bill, which the House debated only yesterday, confirms that this Trade Bill was to provide the key measures necessary

“to build a future trade policy for the UK once we leave the EU.”

We were looking forward to a full debate today on the future of the powers that we will have repatriated from Brussels, and how we might like to use them to make Britain what the Secretary of State calls

“a great trading nation once again”.

Some of us believe that we still are a great trading nation, but clearly he does not.

Yet somewhere along the way the Secretary of State seems to have lost his nerve. Instead of the legislative framework for a future trade policy that we were promised, he has left us with this hollowed out little embarrassment of a Bill, which extends to just six pages and four schedules. We have no more than a vague suggestion that at some point in future we might return to the business of discussing whether Parliament may or may not play a role in overseeing our relations with trading partners around the world.

[Angela Smith]

Will my hon. Friend give way?

[Barry Gardiner]

I will now happily give way to my hon. Friend.

[Angela Smith]

I thank my hon. Friend. His earlier comments about the UK being unable to remain a member of the customs union after leaving the European Union are surely incorrect. Surely it would be possible for the UK to negotiate fresh membership of the customs union, in the same way that Turkey has done. Equally, surely it would be possible to negotiate membership of the single market on departure, in the same way that Norway and Iceland have done. It is entirely possible for the UK to renegotiate membership of both.

[Barry Gardiner]

I am very happy to respond to my hon. Friend, and I understand the distinctions she is making, but she will also understand what I have already set out about the force of the treaties, which is simply a matter of law. We will not be bound by the treaties and therefore we would not be able to continue as a member of the EU, and therefore as a member of the EU customs union, although, as I have pointed out, we could then come back and form a customs union with the European Union.

My hon. Friend asked specifically about Turkey’s relationship with the European Union. Turkey has a customs union agreement with the EU customs union, but it is not a member of the EU customs union—she should be aware of that—and there is therefore an asymmetry in the way in which its trade relations are conducted. The EU conducts the deals and agreements with third-party countries on behalf of Turkey that set its tariffs and quotas. Indeed, that has caused Turkey great concern, because while the Mexico-EU agreement means that Mexico can import cars into Turkey tariff-free, there is no reciprocal liberalisation of Mexico’s markets for Turkey’s textiles, and Turkey is extremely aggrieved about that.

Were we to have the same arrangement, we could be in a position in which the European Union concluded an agreement with the United States—for example, perhaps along the lines of the Transatlantic Trade and Investment Partnership, which many Members would have concerns about—to the detriment of this country but the advantage of the European Union, which we would have no control over, and without liberalising US markets to British exports. That would be an extremely bad deal indeed. I trust that fully answers my hon. Friend’s question.