Taxation (Cross-border Trade) Bill

Charlie Elphicke Excerpts

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

[Anna Soubry]

I rise to speak in support of new clause 1 and new clause 12, and I shall also seek to speak briefly against new clause 36 and amendment 73. I hope that there will be Divisions, in the event of which I will vote against new clause 36 and amendment 73. It is my firm view that it is deeply regrettable that the Government have accepted the new clause and amendment, even though they clearly seek to undermine, if not wreck, the great advances made in the White Paper.

I shall speak, as I like to think I always do, with openness, frankness and honesty. When I became a Business Minister in David Cameron’s Government in 2015, I would be the first to admit that I did not know the finer details of how many of our manufacturing industries and businesses actually worked. I knew about supply chains and their value, but I could not claim, in any way, shape or form, to be particularly familiar with them. I relished my brief, though, so I was soon enmeshed in the manufacturing sector in particular. For example, I had responsibility for the automotive sector, aerospace and, of course, the steel industry, which many Members will remember was having a particularly difficult time. I soon became not quite an expert, but I certainly knew my brief. I understood how supply chains worked, the value of frictionless trade and what this thing called “just in time” was really all about. I had never actually seen it, though, until Friday, when I went to the Toyota factory at Burnaston, which is just outside Derby. I would make it compulsory for every single Member to go to Toyota—they could go to another car manufacturer in Swindon, or to Nissan in Sunderland, as I did shortly after the EU referendum—so that they could begin to understand what a supply chain is, why it relies on frictionless borders and what “just in time” means.

Let me give Members a bit of history about that remarkable Toyota plant just outside Derby. It is actually a legacy to Margaret Thatcher. It opened at the beginning of the 1990s. Some of us are old enough to remember those times and what had happened in many of our traditional manufacturing industries. My right hon. Friend the Member for Loughborough (Nicky Morgan), who is sitting next to me, has a business in her constituency called Brush. It is a long-standing business that has provided good-quality jobs for generations. I had Siemens in my constituency. At one time, I had a number of miners who worked in local pits in north Nottinghamshire and in Derbyshire. In due course, those pits closed, as did Siemens.

When we talk about Brexit, people extrapolate all sorts of things from the vote. One thing that definitely occurred—I know that it occurred for people in my constituency—was that a number of people voted leave because they felt left behind by what we call this global world and the global way of doing business. These people used to work, often down the pits in Nottinghamshire—I am from Worksop, so I understand the sort of lives that miners had and I have no romantic attachment to the coal mining industry—and in factories such as Siemens in high-quality jobs. Those jobs invariably paid good money, but they also added even more value to people’s lives. It was not just about the fact that it was work, which is, in itself, the right thing to do; it was not just the wages, which, in the deep coal mines in Nottinghamshire and at Siemens, were very good; and it was not just the trade and the skills that they conveyed—it was also that feeling of community and being valued. It was about all those great traditional British manufacturing values, which, in truth, began to disappear through the ’80s and into the ’90s. What the great Japanese car manufacturers brought back was much of that high-valued, highly skilled, super-effective and super-efficient manufacturing industry. That practice was not just confined to the automotive sector, because it runs right across many other sectors in manufacturing, which makes up 20% of our economy.

I say to all Conservative Members, “Shame on you if you have a manufacturer in your constituency that you have not been to to understand how a modern manufacturing business works and how it needs frictionless trade for the supply chains to work. Shame on you if you have not taken the opportunity to go to those places that might be outwith your constituency, but where your constituents work.” I say that very gently—

[Charlie Elphicke (Dover) (Ind)]

rose—

[Anna Soubry]

I will take my hon. Friend’s intervention in a moment, but not yet.

I say that very gently to my hon. Friend the Member for Mansfield (Ben Bradley), as many of his constituents work in exactly the sorts of manufacturing industries that I am describing. No doubt, like a number of my constituents, some of them work at Toyota. When Members see how these wonderful manufacturing businesses work—whether it is ceramics, cars, automotives, potteries or glass—they will understand the importance of frictionless trade. What that means in the real world is that, at Toyota in Burnaston, parts arrive on lorries, which have come through the tunnel and straight up the motorway, and within three hours they are on the assembly line. It is an astonishing and an incredible achievement that this country should be proud of. It is part of Margaret Thatcher’s legacy—

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[Charlie Elphicke]

Will my right hon. Friend give way?

[Anna Soubry]

In a moment.

The reality, which is faced in the White Paper, is that if we do not deliver frictionless trade in the way in which companies such as Toyota need and demand, they will simply not be able to operate. Some 81% of Toyota cars produced at Burnaston are exported into the European Union. And before anybody says, “Well, there will be new markets”—those unicorns that our Government will be chasing in new deals—please understand how the modern manufacturing industry works. Companies such as Toyota already make cars in other parts of the world to satisfy and supply the local market.

[Nicky Morgan (Loughborough) (Con)]

Will my right hon. Friend give way?

[Charlie Elphicke]

Will my right hon. Friend give way?

[Anna Soubry]

I will give way to my right hon. Friend the Member for Loughborough and then I will come down the row.

[Anna Soubry]

Here is a surprise: I completely agree with my right hon. Friend.

[Charlie Elphicke]

Will my right hon. Friend give way?

[Anna Soubry]

I will.

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[Anna Soubry]

I said that I would go down the row first. In a moment gents; hang on.

[Charlie Elphicke]

I have been listening with great interest to my right hon. Friend’s speech. I am a former remainer and fellow believer in free enterprise, which was why I set out a detailed plan on how we can have frictionless trade using the World Trade Organisation trade facilitation agreement that was entered into in 2017.

My constituents have some questions that I would like to pose to my right hon. Friend. Why is it that so many lorries come in through Dover laden with goods yet so many return empty? Why is there a £100 billion trade surplus for the European Union? Why should we give the European Union access to our goods market but not insist on access to our financial services market after we leave the European Union?

[Anna Soubry]

I do not wish to be rude to my hon. Friend, but that really is the stuff of madness. Of course we need to export more, but here is the real question that he should be asking. At the moment, a lorry that comes in from the European Union through Dover will take, at the most, two minutes to go through. If it comes from outside the European Union, the process takes 20 minutes at the least, and at the most—and more typically—it takes two hours. How does that transpose to the manufacturing sector and to the Toyota workers outside Derby—some 3,000 people, with three to five times as many in the supply chains?

I say to my hon. Friend that this, Sir, is the real world. In the real world, when Toyota makes an order for car seats, they are delivered absolutely ready on to the production line within four hours of the order being placed. If we do not deliver frictionless trade, either through a customs union or some magical third way that the Prime Minister thinks she can deliver—good luck to her on that—thousands of jobs will go, and hon. Members sitting on the Government Benches, in private conversations, know that to be the case. What they have said in those private conversations is that the loss of hundreds of thousands of jobs will be worth it to regain our country’s sovereignty—tell that to the people who voted leave in my constituency. Nobody voted to be poorer, and nobody voted leave on the basis that somebody with a gold-plated pension and inherited wealth would take their jobs away from them.

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[Charlie Elphicke]

In the referendum campaign, the Home Office told my constituents that the jungle would move from Calais to Dover. The former Prime Minister said that there would be queues of lorries and gridlock on the way to Dover—a mantra that the Labour party took up. The Treasury told my constituents that they would lose their jobs and their homes to boot in a calamitous disaster.

Despite that level of fear, my constituents believed in the opportunity that lay before them. Two thirds voted to leave the EU. Why? Because they believed in the kind of opportunities and the kind of Britain that we can build. They believed in better. They believed in the future, in our sense of nationhood and independence and in the country that we could build: independent and out in the wide world. It is important to remember that, because change does not come easily; it takes political courage.

Our voters have shown more courage than far too many Members of this House, who fear change and are afraid of grasping opportunities and what the world offers. Our voters better understand the need for that courage. They can look at the figures and see that the EU has been in relative decline in the past few decades, going from 30% to just 15% of GDP. [Interruption.] The spokesman for Brussels, the right hon. Member for Carshalton and Wallington (Tom Brake), does not like those figures, but they are true. Our voters also know that 90% of future economic growth in the world will come from outside the EU. That is why it is so important to believe in better, back our constituents and make a success of Britain out in the world—a global Britain.

[Vicky Ford]

We are leaving the EU and that means that we need to have a new relationship with the single market and the customs union—we cannot carry on as we were before. However, leave voters were told time and again that trade would continue and that having customs clarity was important to that trade.

I want to dispel some myths. First, zero-tariff regimes are not the same as no-tariff regimes. A no-tariff regime, which we have now, means no customs declaration and no rules of origin. A zero-tariff regime means both. That is why I am glad that the White Paper says that we will have no customs declarations and no rules of origin.

On myth two, we do not need to be in a customs union to resolve the rules of origin issue. That can be done through a PEM convention. On myth three, being in a single rulebook on goods does not stop us from doing trade deals with other parts of the world—just look at Switzerland. On myth four, trading on World Trade Organisation rules means that there will have to be a goods border in Ireland, otherwise the UK will breach our agreements with other trading partners, as will the EU. On myth five, just-in-time delivery of goods coming from China, which takes four weeks at sea, is not the same as just-in-time delivery across the channel.

I support some of the amendments. New clause 37 on no hard border in the Irish sea makes sense. Amendment 72 also makes sense. However, I am concerned about amendment 73. I do not like the EU VAT regime, but we need more clarity on that. On new clause 36, I agree we need a balanced approach on tax collection, but how it is worded is very unclear. I do not understand how the word “reciprocity” works in a legal framework when it is country to country versus us to EU. There needs to be a much clearer legal basis.