Taxation (Cross-border Trade) Bill

Debate between Bernard Jenkin and Chris Leslie

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Leslie]

Yes, indeed.

It is helpful if we view the two Bills we are considering today and tomorrow as a piece, as they interrelate with one another. Many of the amendments tabled for the Trade Bill tomorrow on a customs union are also on today’s amendment paper. I say gently to the Government, “Nice try with your facilitated customs arrangement, but it is not going to fly for a number of different reasons.” I urge the Chancellor and the Minister to stop putting down red lines. They will only find that they come back and embarrass them when they have to accept a customs union.

Let me quickly go into detail on why a customs union really will have to apply in this situation. There may be Conservative Members who agree with me on this point. The facilitated customs arrangement may well apply if we have a free trade agreement with the EU, but only a customs union gets rid of what is known as the rules of origin requirements—the local content thresholds needed to prove whether an FTA is in place to qualify for preferential tariff arrangements. Under a customs union, we do not have to have rules of origin checks. That is a massive advantage of the customs union.

[Sir Bernard Jenkin]

That is not actually correct. It is quite common in a free trade agreement to have what is known as an auto-pact, so that there can be frictionless arrangements, for example for the motor industry. The same could apply for aerospace.

[Mr Leslie]

There are certain manufactured goods where they have that, but across the piece of a whole economy we do not see a circumstance where rules of origin have been abolished in the way the hon. Gentleman describes. Rules of origin are really quite burdensome for manufacturers to prove. They have to count the content and document where components come from. They then have to lodge those documents as they cross the border. My point is that the facilitated customs arrangement, with its rules of origin requirements, will have friction at the border. For that reason, we are going to have to accept that a customs union is preferable.

European Union (Withdrawal) Bill

Debate between Bernard Jenkin and Chris Leslie

Report stage: First Day: House of Commons
Tuesday 16th January 2018 Commons Chamber

[Mr Leslie]

My hon. Friend absolutely nails the point and brings it home. She knows a great deal more about such issues than I do. The Government of the day do have a say on the rules and can sometimes effect reforms or block them.

[Mr Jenkin]

rose—

--- Later in debate ---

[Mr Leslie]

I will take one last intervention, but then I must conclude.

[Mr Jenkin]

rose—

[Mr Leslie]

No, I have to conclude.

European Union (Withdrawal) Bill

Debate between Bernard Jenkin and Chris Leslie

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Mr Leslie]

Governments would normally be expected to have information and facts, with evidence being collected and presented and with an assessment made based on information that has been analysed and digested in a professional way, but it appears that, although we were told they exist, the impact assessments do not actually exist but are sectoral analyses. What is the difference between an impact assessment and a sectoral analysis? Well, we have been discussing that for quite some time.

Returning to EU retained legislation, the right hon. and learned Member for Beaconsfield rightly pointed out that we have lived with important legal understandings, such as on equalities law and environmental law, for a number of decades. Those understandings have been tenets of our expectations of the civilised society in which we live. Of course, they will now be transferred from European law into UK law. If they had originated in this House, they would have been enacted in primary legislation and any changes would have had to be made through primary legislation. But the Government’s proposal is to take this new category of EU retained law and bring it into UK law, and it will not have the same status as primary legislation. In many ways, it will be repealable or amendable, often by secondary legislation—by statutory instrument. This is not a point about Brexit; it is about the process of transposition. It is important that the public know what is going on when we are doing this. If a transfer is taking place, information should be set out in the explanatory notes, not just about the technical details, but about the weight that those legal rights will have once they come back into UK law.

There are a number of other aspects to this—

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

The hon. Gentleman is making an interesting and relevant point, although it is of course true that all this legislation came in via secondary legislation in the first place and Parliament will have considerably more control over the secondary legislation that amends it than we currently have over the method that created it. I would imagine, as I am sure he does and the Government do, that Acts of Parliament will become more important, particularly if we want to make sure that this is not challengeable in the courts, as secondary legislation is much more vulnerable to challenge through the courts than primary legislation.

[Mr Leslie]

Yes. Although we disagree on many things, I think we can agree that if we are going to do this exercise, it needs to be done thoroughly and robustly, making sure that the intent of Parliament and the laws we are transposing are robust enough to withstand the test of time. Having explanatory statements to accompany those is an important development that has helped us in our legislative process recently. If we are going to have a sifting committee—it is not really a sifting committee; the procedures committee will be doing this—looking through all these statutory instruments and picking out which ones it thinks should not be passed through the negative procedure, this explanatory process ought to be in place to help hon. Members figure out which of these hundreds or even thousands of aspects of legislation are important enough to flag up to hon. Members more widely. That is a small point but it needs making. Other issues arise relating to “tertiary” legislation and the powers the Bill is giving to agencies and regulators to make, or to amend or remedy, laws. Again, I would like these things to be flagged up in plain English, wherever possible, so that parliamentarians can know about them. In essence, new clause 21 is about transparency, clarity and shining a light on this complicated bandwidth of activity that is about to hit all hon. Members, and that is important.

The only other point I wanted to make on this group—

European Union (Withdrawal) Bill

Debate between Bernard Jenkin and Chris Leslie

Committee: 6th sitting: House of Commons
Tuesday 12th December 2017 Commons Chamber

[Mr Leslie]

It is almost an Alice in Wonderland “down the rabbit hole” concept: the notion that we are passing an Act that hands powers to Ministers to amend not just any other Act of Parliament, but the Act itself. It is completely ridiculous. I know that Conservative Members will say I am making the point because I am sceptical about Brexit or something, but this is a constitutional issue. It is about ensuring that Parliament is sovereign, and that Members of Parliament can override the executive and curtail excessive behaviour. I shall be astonished if clause 9(2) is still there after Royal Assent, because if the House of Commons does not deal with it, the other place will certainly have to do so.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I have some sympathy with the points that the hon. Gentleman is making, but why did he not raise these objections when his own party was passing legislation that could be self-amending in exactly the same way, without a sunset clause—for example, the Scotland Act 1998?

[Mr Leslie]

I am not sure whether there is anything comparable to the sweeping nature of the policy scope of a Bill that says that order-making powers can include powers to modify the Act itself.

[Mr Jenkin]

There is the Scotland Act!

[Mr Leslie]

If that is indeed the case, two wrongs do not make a right, but I do not think that any other provision is quite as extensive as this. The hon. Gentleman’s loyalty to the Government knows no bounds—he has to come to their defence, because it is important for someone to do so—but I think that, in this particular instance, even he may be slightly embarrassed by quite how far Ministers have gone.

Clause 7(1) states:

“A Minister of the Crown may by regulations make such provision as the Minister considers appropriate”.

The term “appropriate” is entirely undefined, and it is the only condition imposed on the Minister’s desire to address “deficiencies” in the law. The House of Lords Constitution Committee has said:

“This application of a subjective test to a broad term like ‘deficiency’ makes the reach of the provision potentially open-ended.”

The Government tabled amendment 391 to try to ameliorate some of the concern about that, but it barely constitutes a concession. It merely requires Ministers to make explanatory statements that provisions are “appropriate” in order to justify the order-making power. It is because it is so broad that I tabled amendment 65, which would at least shift the subjective threshold from “appropriate” to “necessary”. I believe that requiring Ministers to feel that a regulation is necessary would present them with a stronger test and a higher threshold. It would allow them to retain fairly broad powers, but I think that it would provide an extra safeguard. A Minister may think that something is appropriate without having to justify it, and I feel that we should expect more in a Bill such as this. The Constitution Committee has also said:

“We proposed that ‘a general restriction on the use of delegated powers’ could be achieved using ‘a general provision … placed on the face of the Bill to the effect that the delegated powers granted by the Bill should be used only so far as necessary to adapt the body of EU law to fit the UK’s domestic legal framework’”.

I followed that advice by tabling amendment 65.

Clause 7(2) implies that the scope of the Henry VIII powers are not exhaustive at all.

That subsection begins with the phrase:

“Deficiencies in retained EU law include (but are not limited to) where the Minister considers that retained EU law”

does x, y and z, and it goes on to set out a series of particular conditions.

The right hon. and learned Member for Beaconsfield (Mr Grieve) has also spotted this issue in his amendment 1, and this caveat does not have to be limited to the exceptions set out in clause 7. Again, that provision is too broad and gives too much power to Ministers. Ministers might well say, “Well, it’s not our intention to go beyond the list of prescribed areas in clause 7”, but the Bill as drafted does not constrain their successors; as I have said, there will, of course, always be further Ministers after the current ones have moved on.

European Union (Withdrawal) Bill

Debate between Bernard Jenkin and Chris Leslie

Committee: 1st sitting: House of Commons
Tuesday 14th November 2017 Commons Chamber

[Mr Leslie]

I fear that that scenario is beginning to loom on the horizon. We know the Prime Minister does not want that because she says she wants the transitional arrangement, but more flesh has to be put on the bones in terms of how the UK envisages the transition and at the European Council in December. If a transition deal is not signalled, with more flesh put on the bone in December, a lot of firms will say, not unreasonably, “We have to plan for a scenario in which we are not legally able to sell our services to the 500 million customers across the other 27 countries.” We hear that American corporations that currently have their base in London are looking at all sorts of convoluted branch-back arrangements, so that they can subsidiarise back into the UK. This is getting terribly complicated and very expensive. Ultimately, all these issues will hit consumers and workers in the UK. It will have a very practical effect on the lives of many of our constituents.

[Mr Jenkin]

I share the hon. Gentleman’s and the Prime Minister’s hope that there will be a sensible implementation period, although, as the Secretary of State has said, it is a diminishing asset if it is left later and later before we know are going to get it. I welcome the inquiring way in which the hon. Gentleman is proposing his new clause, but I think he has made his own point. If there are to be any enforceable legal obligations arising from a withdrawal agreement, or any agreement, after we have left, they should be done through the Act of Parliament that was announced yesterday and not incorporated into this Bill. That is why it is safe to put the exit date in the Bill, because the exit date ends the jurisdiction of the European Court of Justice.

[Mr Leslie]

Let us imagine the circumstances where exit day falls at that fateful 11 pm on 29 March 2019 and there is no legislative architecture in place for the transitional period from 11.1 pm and thereafter. At present, there is no guarantee from the Government—I will give way to them if they will guarantee it—that that legislation will be put in place, published and consulted on and that businesses will know what the transitional legal framework will be from 11.1 pm on 29 March 2019 onwards. The Government have said that we might not get the latest offer of an Act of Parliament until not only after a withdrawal treaty has been signed and sealed by Ministers, but after exit day. There is, therefore, a hiatus. What is the legal architecture that fills the gap in that transition? That is the question I am asking in new clause 14.

Financial Transaction Tax and Economic and Monetary Union

Debate between Bernard Jenkin and Chris Leslie

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

It is a sentence that takes note of something self-evident. Of course there is a challenge—we all know that there is a challenge and that the Minister’s agenda is to try to throw a spanner in the works and do what he can to stop that European variant of the FTT. He should consider what is in the motion; we did not particularly want to remove any of those other aspects of it. Taking note of the challenge was quite a good bit to leave out. Let me restate the case on which we must focus.

[Mr Jenkin]

Will the hon. Gentleman give way?

[Chris Leslie]

I want to make some progress, as there is not much time.

For the longer term, we must recalibrate the contribution of financial services to society. Of course, we must nurture a revival and restoration of the City of London’s primacy as the most trusted and professional place for financial transactions, but we cannot ignore the fact that most other jurisdictions are revisiting how banking and finance pays into society and what sort of responsibility we seek.

We have heard already from my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) about the IMF report after the G20 in 2009, which sought to think through new ways for the financial services sector to make a fair and substantial contribution to meeting the costs associated with Government interventions to repair it. In this country the interventions, in one form or another, cost near £1 trillion.

When in government, we started with the bank bonus tax, a payroll tax implemented by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor. We thought that was a good idea then and we still think it is a good idea today. The Government then came along with the bank levy; we think that it is a good idea, but it has been poorly enforced. Ministers promised £2.5 billion in every year, but two years ago it raised just £1.8 billion and last year just £1.6 billion. Ministers keep coming back to the House and saying, “Don’t worry, we’ll deal with this shortfall.” The Minister has said that on numerous occasions, but we will believe it when we see it.

A bank levy and a bank bonus tax can only be part of the bigger picture. We must recognise that there is an ongoing systemic risk from financial services innovation and trading beyond the mainstream banks.

Banking Union and Economic and Monetary Union

Debate between Bernard Jenkin and Chris Leslie

Tuesday 6th November 2012 Commons Chamber

[Chris Leslie]

It is right for the hon. Gentleman to voice that anxiety. I do not want us to be on the margins, unable to promote the best interests for our nation and our economy. Given that our financial services sector represents approximately 40% of the total of the European Union’s financial services sector, that is absolutely at the core of our vital national interests. It is therefore imperative for us to remain an active driving force in the EU single market in financial services.

[Mr Jenkin]

It seems to me that the hon. Gentleman is trying to have his cake and eat it. Either he is going to be in the room—in the banking union—or not. If he is not going to be in the banking union, the question that he is failing to grapple with is this: what safeguards and protections do we need given that we will not be in the room because we will not be in the banking union? Perhaps he could provide an answer to that question instead of just waffle.

[Chris Leslie]

The hon. Gentleman is too kind, as uncharacteristic of him as that may be.

I am afraid that this is a tall order for the Government to negotiate. It is a conundrum. I do not in any way shrink from the mountain that needs to be climbed in squaring this circle, if I may mix my metaphors in that way. I am just concerned that the Government’s approach—perhaps an echo of their approach to the EU budget—is not ambitious enough. I urge hon. Members to talk to institutions across the City of London and to financial services practitioners across the country. They are very worried about their position if they are not able to be part of a single market. They know very well that there are forums in which the rules will be made and shaped, and yet of course they want to reserve our rights from a UK position. Somehow, we have to try to forge a negotiating strategy that manages to do better.

European Union Economic Governance

Debate between Bernard Jenkin and Chris Leslie

Wednesday 10th November 2010 Commons Chamber

[Mr Jenkin]

Is the hon. Gentleman arguing that somehow these arrangements will give us more influence and more control over the economies of other member states? On that basis, should we therefore not be seeking to enter into arrangements of the same sort with, say, the United States, so that we can control its deficit? The US deficit will have far more effect on our economy than any individual deficit in any individual member state of the EU.

[Chris Leslie]

Those of us in opposition are merely asking questions and scrutinising what is on the table, but we are trying to find out what will be the impact on the UK. Ministers are arguing, “Don’t worry, absolutely nothing changes and there is no impact whatever.” As far as I can see, there are strands and suggestions that there will be an impact, both direct and indirect. In that respect, although we might have different views, there might be a point on which we can agree.

If the eurozone deflation and the shrinkage of European economic markets affect our exports, that matters, because the Treasury has depended on them so greatly. The June Budget and the spending review were predicated on a return to strong economic growth here in the UK, based principally on higher business investment and strong export growth. The Office for Budget Responsibility analysis shows that the cuts imposed because of the Chancellor’s austerity programme and his overly speedy deficit reduction strategy will see private consumption shrink rapidly and Government consumption doing the same.

Cuts in domestic expenditure will hit growth—that much is clear—but the Chancellor has bet the shop on the countervailing growth in trade and business investment. The Treasury states clearly that it needs £100 billion of growth in exports and business investment, yet the last time we saw such a massive rate of growth for exports was in 1974 and we achieved that rate of improvement in business investment only in 2005, but the Chancellor’s sums depend on the UK achieving both those record levels in each of the next three years—a very tall order indeed, equivalent to tripling our exports to the US and seeing our exports to China grow 20 times or to India 40 times.

Clearly, our reliance on the eurozone’s appetite for our exports is central to the Chancellor’s strategy, so there are implications for British fiscal policy here.