Taxation (Post-transition Period) (Ways and Means)

Bridget Phillipson Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I beg to move amendment (a), at end add

“; but any such provision must not place the United Kingdom in breach of its obligations under the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community which entered into force on 1 February 2020, and specifically its obligations under the Protocol on Ireland/Northern Ireland of that Agreement.”

It is 1,629 days since the UK voted to leave the European Union. In that time, our country has managed two general elections, and we are now on to our third Conservative Prime Minister. It is just 23 days until the United Kingdom’s transition period following its exit from the European Union comes to an end, yet this afternoon, we still have little clarity on the Bill that the Government tell us they will present tomorrow to set the legal framework for future taxation in Northern Ireland, for value added tax, for aviation fuel duty, for insurance-premium tax and for state aid rules.

With less than four weeks to go, the single sheet of A4 in front of us is almost all the detail that the Government have shared with Parliament about their new tax plans for next month. The only other information we have is that, just over two hours ago, the Government confirmed that they would withdraw clauses 44, 45 and 47 of the United Kingdom Internal Market Bill and that the provisions of the Taxation (Post-transition Period) Bill would reflect the same approach. The Minister recently tabled a written ministerial statement to that effect, although he offered little more this afternoon by way of further clarity.

The clock has been ticking ever more loudly. People in this country might reasonably have assumed that by this late date, it would already be clear what the Government’s plans for Britain’s future were. They might have assumed that by this late date, there would be a clear agreement on our future relationship with the European Union.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Member makes an interesting point about the late stage of these negotiations. Who is she blaming for that—the United Kingdom Government or the European Union negotiators?

[Bridget Phillipson]

Time is ticking. We want to get a deal. We are frustrated that at this point, we still do not have a clear understanding about our future relationship. If the hon. Member shares those concerns, I suggest that he raises them with his own Prime Minister.

People in this country—especially those who live near our 300-mile border with the European Union, or those who live in or near our port towns and port cities —could be forgiven for expecting that trading relationships and rules on the movement of goods would long since have been finalised. Such reasonable assumptions would not have been partisan. After all, we have the Prime Minister’s own word for it: to leave with no deal would be a “failure of statecraft”.

One thousand six hundred and twenty-nine days is a very long time in which Ministers have chosen not to address the issues that leaving the European Union raises. It is 1,421 days since the Government announced that we would be leaving the single market. It is 1,350 days since the Government notified the EU of the United Kingdom’s decision to trigger article 50. It is 1,240 days since the Brexit talks began and 886 days since the Chequers plan was announced to the current Prime Minister by the previous Prime Minister. It is a little over 500 days since the Prime Minister took office. It is 320 days since the European Union (Withdrawal Agreement) Act 2020 became law. They have had ample time.

[John Redwood]

Up to this point, Labour has always backed the EU position and not the UK position. Will the hon. Lady now use the Opposition’s voice to say that we should not give away our fish and our independent lawmaking?

--- Later in debate ---

[Bridget Phillipson]

That is, frankly, a ludicrous statement for the right hon. Gentleman to make.

With epic irresponsibility, successive Conservative Governments have wasted this time. Still businesses are not clear how they will be trading next month. Still people living along our land border with Ireland are unsure what daily life will bring in four weeks’ time. That epic irresponsibility comes in two forms. First, there is the immediate irresponsibility—the irresponsibility to businesses and working people; to everyone who needs to be able to plan their future and their finances; to everyone who wants the simple security, stability and certainty that a responsible Government should provide; to everyone who believed the Chancellor of the Exchequer when he said on the “Today” programme a year ago tomorrow,

“We won’t need to plan for no deal because we will have a deal”;

and to everyone who believed the former International Trade Secretary when he told us that a trade deal with the EU would be

“one of the easiest in human history.”

That irresponsibility has meant months and years of uncertainty and insecurity for so many families and so many firms. Make no mistake: the Conservative party has now lost forever any claim to be the party of business. That irresponsibility means that people in Fermanagh, Galloway, Anglesey, Kent and all around our key ports today still face the risk of their roads being clogged with queues of lorries for months on end. That irresponsibility—a failure to engage with the problems of our country, to look ahead and to plan, to lead and to rise to the level of events—is sadly of a piece with the Government’s wider failures in recent months.

The country has suffered terribly from the pandemic: the worst economic hit in the G7; the worst level of excess deaths in Europe; a Government who are again and again caught on the hop, scrambling to catch up with the consequences of their own incompetence; a Government who never use the time they have to get ahead of the problems that they know are coming. It is all too familiar. It is the story of everything that this Government touch.

If the Government had got ahead of the issues that our country faces, we would have had a Budget, not a statement, in the summer. Instead of multiple episodes of the winter economy plan, we would have had a Finance Bill with proper time for debate, and proper time for businesses to plan on that basis. But just as the Government were behind the curve on covid, so they are behind the curve on Brexit. And here we are, with tax decisions for next month being bundled together into a last-minute Bill, which they have not yet even published—inaction, incompetence, and scrambling to fix the mess that they have created themselves, again and again, month after month.

[Jesse Norman]

I am awfully grateful to the hon. Lady for giving way. Could she possibly name any EU treaty that has not been concluded by the EU at the last minute?

[Bridget Phillipson]

I look forward to seeing in detail what the Government intend to bring forward on our future trading relationship, as that will determine so much around what our businesses will need for years into the future. I believe that our country is a great place to do business. I want all our businesses to succeed into the future. That is why it is so important that we see a good deal for our country, and that the Government use the time they still have available to them well. They have not done so yet. I look forward to hearing more from the Minister later about exactly what the Government intend to set out in this legislation, because he has not really offered a great deal so far this afternoon.

The Government’s irresponsibility has not been limited to inaction and incompetence in the face of a ticking clock. There is also the greater irresponsibility that we have seen in recent months—an irresponsibility of which I fear the consequences may last for generations—and that is the irresponsibility with which this Government have made it clear that they are prepared to break international law. The world will not forget that just weeks ago the Government introduced legislation to tear up an international agreement that was signed less than a year ago. We welcome the fact that they now propose to withdraw those measures, but we fear that the damage has been done. The Government threatened to break the law to get their own way. What message does that send to Britain’s friends and allies with whom we have signed that agreement, with whom we have other agreements and with whom we hope to conclude future agreements?

[Anthony Browne (South Cambridgeshire) (Con)]

You talked about the notwithstanding clauses as irresponsible and said that the damage may have been done, but would you like to join me in welcoming the Government reaching an agreement in the Joint Committee, as was announced just a couple of hours ago, on the issues that those clauses were intended to address?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Just a gentle reminder not to use the word “you” to the shadow Minister, because “you” means me.

[Bridget Phillipson]

In fact, I had just indicated that very point. Everyone on the Opposition Benches is delighted that the Government have in recent days managed to conclude a trade deal with North Macedonia, but what message does it send to our friends in the USA, who have made their position on this point very clear, that the Government no longer regard it as at all times non-negotiable that they will uphold the rule of law? It is because of our concerns on that point that we have tabled the selected amendment to the first resolution. We wish to append the text of the first resolution, at the end, with a clear limitation that provisions under that resolution may not place this country in breach of its obligations under law. The amendment would insert new text at the end of the current text of the first resolution to ensure that

“any such provision must not place the United Kingdom in breach of its obligations under the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community…and specifically its obligations under the Protocol on Ireland/Northern Ireland of that Agreement.”

Obviously, in the last two hours the Government have announced that they have reached an agreement in principle with the European Union on that protocol and will therefore resile from their expressed intention to enact legislation that would have breached those agreements. Of course, Opposition Members welcome that news, even as we find it astonishing that it should ever have been delivered and shambolic that it arrives so late. We would not, until this autumn, have ever imagined it necessary to make it clear in a resolution of the House that the Government, in exercising their powers, must obey international agreements into which they freely entered. Yet, as a result of the deep irresponsibility of the Government, that is precisely where we find ourselves today. We will not oppose the substantive resolutions, and we shall wait to see what further reassurances the Minister can provide before deciding whether to press our amendment to a vote.

We recognise that there needs to be a lawful basis for the collection of VAT, customs duties, aviation fuel duty and insurance premium tax, even while we do not yet know what the Government propose to table by way of a Bill. Let me repeat that: we do not yet know what the Government propose to table by way of a Bill—less than 24 hours before its Second Reading and Committee of the Whole House. Less than a month before we leave the European Union, we simply do not know with any certainty what measures the Government intend to set out. This extraordinary state of affairs undermines the ability of Members to give such important legislation the scrutiny it rightly deserves, not to mention the ability of businesses to plan. Is the Minister really telling us that it was not possible before today to set out the Government’s proposals on aviation fuel duty or insurance premium tax? Of course it was. These clauses were held back—they still are—so that the Government could, until a few hours ago, continue to brandish the threat of breaking international law as part of their negotiating tactics with the European Union, believing they have an ace up their sleeves, when in fact the whole world sees the Government as a pack of jokers.

Although we will not oppose these resolutions, we cannot and will not vote for any measures that the Government introduce that would breach agreements into which this country has entered with her friends and allies, because the consequences of such unlawful acts have been made clear to us. The Speaker of the United States House of Representatives said:

“The U.K. must respect the Northern Ireland Protocol as signed with the EU to ensure the free flow of goods across the border. If the U.K. violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress.”

[Sammy Wilson]

I note the hon. Lady’s concern for Northern Ireland, the Good Friday agreement and the people of Northern Ireland, but does she not recognise that if the protocol goes through in its present form, the EU has made it clear that it will require measures to be implemented that have already led to supermarkets saying that they will no longer operate in Northern Ireland—that they will withdraw from Northern Ireland? The goods that would be supplied from here to Northern Ireland will no longer be supplied. I am only talking about one limited area. How can she defend that protocol, which would so adversely affect people in Northern Ireland?

[Bridget Phillipson]

I am grateful to the right hon. Gentleman. I understand the point he raises, but I am afraid I do not share his assessment of the situation. I say to him sincerely that I think it is important that we have certainty around this area. The Government’s approach on this has been misguided and has caused real damage. However, while understanding his concerns, I am afraid I do not recognise his assessment of the situation.

We hope the commitments announced earlier today by Ministers will be further repeated in this place, and that the assurances regarding the withdrawal of the offending clauses of the United Kingdom Internal Market Bill will be honoured. Ensuring that the UK’s forthcoming tax legislation does not breach our international treaty commitments, and in so doing put the Good Friday agreement at risk, is the sole purpose of our amendment. I do not doubt that there will be those on the Government Benches who regard such an amendment as weakening their hand, even as they too welcome the Government’s recent announcement. To them, seeking to legislate to break international law may have seemed a way of showing that they mean business. The delusion would be comic were the consequences not so grave. A negotiation in which one party makes it clear that it cannot be trusted—not inadvertently, but by what passes for strategy—is not one on which strong future relationships will be built, nor one that will commend us to other nations as a reliable partner for trade or security. What the Government have tossed away this autumn in the search for a fleeting advantage is a reputation that will take our country many years to regain.

Ways and Means resolutions enable the House to give effect to the taxation decisions of the Government for the year ahead. Some of those taxes and duties will fall more heavily on some of us than others. But for the Government’s extraordinary irresponsibility, which today’s events illustrate so powerfully, I fear the price will be paid by all of us, not just next month or next year but for many years to come.

--- Later in debate ---

[Bridget Phillipson]

It is extraordinary that we have not yet had sight of the Bill and that all we have is a single sheet of A4, just 23 days until the end of the transition period. The Minister did not offer much this afternoon other than to merely say he regarded Opposition amendment (a) as unnecessary. I regret that our trust in the Government’s promises and assurances has run rather thin this autumn. In the absence of the publication of formal texts, I have not been persuaded by the Minister’s arguments this afternoon.