No-deal Brexit: Schedule of Tariffs

Chris Leslie Excerpts

Monday 7th October 2019 Commons Chamber

[Mr Chris Leslie (Nottingham East) (IGC)]

(Urgent Question): To ask the Secretary of State for International Trade if she will set out the final schedule of import tariffs proposed in the event of a no-deal Brexit.

[The Minister of State, Department for International Trade (Conor Burns)]

I am grateful to the hon. Gentleman for his question.

On 13 March, the Government announced that they would implement a temporary tariff regime in the event of a no-deal Brexit. This regime would apply equally to all imports that are not subject to alternative trade arrangements and would apply for up to—I stress, up to—12 months while a full public consultation takes place to inform long-term tariff arrangements. The Government would prefer to leave with a deal and will continue to work energetically and with determination to get that better deal. This will require the European Union to show the same spirit of compromise that my right hon. Friend the Prime Minister is demonstrating in his engagement with our European friends and allies.

As the UK leaves the EU, the Government are stepping up their preparations to get the UK ready to trade if there is no deal. The temporary tariff regime will maintain open trade on the majority of UK imports, helping to support consumers, business supply chains and sensitive sectors of the UK economy. Due regard has been given to the five principles set out in the Taxation (Cross-border Trade) Act 2018: the interests of consumers in the UK; the interests of producers in the UK; the desire to maintain and promote external trade of the UK; the desire to maintain and promote productivity in the UK; and the extent to which these goods are subject to competition. It reaffirms our commitment to become a free-trading nation. It realises the benefits of an independent trade policy to support increased trade and investment with partners new and old around the world and increased choice for British shoppers.

At the same time, Her Majesty’s Government recognise the importance of retaining some tariffs. Tariffs would therefore apply on just over 10% of imports, supporting sectors facing unfair global competition, mitigating otherwise significant adjustment costs for the agricultural sector, supporting the strategically important automotive sector and maintaining our commitments to developing countries. Preferential access to the UK market is important for our developing country partners, and tariffs are being retained on a set of goods, including bananas, raw sugar cane and certain kinds of fish, to demonstrate the Government’s ongoing commitment to countries in the developing world. During the article 50 extension, the Government have remained responsive to the concerns of business and have reviewed the tariffs that would come into effect if the UK left the EU without a deal.

To answer the hon. Member for Nottingham East (Mr Leslie), the Government will publish the final tariffs shortly. It would not be appropriate for me to comment on any amendments being considered prior to that announcement. As he will understand from his former guise as shadow Chancellor, to do so would be irresponsible. The Government will ensure that Parliament is informed as soon as is practically possible once a final decision has been made.

--- Later in debate ---

[Mr Leslie]

Thankfully, the Benn Act will safeguard Britain from a no-deal Brexit, but with the Minister still insisting that, in only 24 days’ time, we might somehow crash out on a World Trade Organisation basis, does it not beggar belief that the Government have still not got around to publishing the final schedule of import tariffs for that eventuality? The Chancellor of the Duchy of Lancaster has said that what we have had is not the final word, and he has repeated that today.

At present, we can import from and export to the EU without any customs duties applying, but that could be about to end. The consequences for so many sectors of our economy, including farming, manufacturing and engineering, are massive. I ask the Minister: how are businesses supposed to “get ready”, as the £100 million advertising campaign suggests, if Ministers still cannot tell us the tariffs that will be imposed and seem incapable of even the most basic competent level of preparation?

The CBI director general Carolyn Fairbairn rightly asks why there is no time to consult industries about what tariffs will be applied. Even if we put aside the enormous non-tariff barriers of veterinary inspections, border checks and certification, are businesses to assume that the draft tariffs that were put out in March will still apply? Some of the import tariffs that Ministers are rumoured to be planning are really high. For example, if a British haulage company needs to buy an HGV truck from abroad, should it plan to pay an additional 22% on the cost or 10% because of the Government’s tariff plan? Will my constituents have to add 10% to the cost of buying a new car? What about the UK energy and bioethanol sector? Will customers have to pay the 4.7% tariff on fuel imported from the EU, as they currently do for fuel from beyond the EU? If not, will that not push the British energy sector into a competitive disadvantage when the 4.7% is imposed on its exports? There are container ships full of goods, components, textiles and clothing that have already been dispatched from the far east and elsewhere, heading for arrival at our shores at the end of the month. Will they face tariffs when they get to Britain, or not?

If British businesses suddenly have to start paying tariffs to export into Europe, what will the reciprocal tariffs be on goods imported into our country? How will British farmers compete with foreign produce when, for example, their lamb will face a 48% tariff when selling into Europe, their cheddar 57%, their poultry 37%, their wheat 53% and their beef 84%? The National Farmers Union is deeply concerned about the risk of foreign producers undercutting domestic production. So can the Minister at least do us the courtesy of setting out the rationale and strategic logic behind his decisions? Where is the parliamentary authority for imposing these tariffs and taxes? When will there be a vote in the House of Commons as the customs legislation requires?

Given that the Government now want a customs frontier in Ireland, will the Minister confirm that goods coming from the Republic into Northern Ireland will have tariffs added on? How does he think people and businesses in Northern Ireland will respond to the imposition of a tariff border in that way?

Would it not be far better to accept that erecting reciprocal tariffs between the UK and the EU is a fool’s errand—an endless cycle of costs and bureaucracy where everyone loses out in the end? Will the Minister at least have the good grace to acknowledge that, by leaving the single market and the customs union, British businesses and customers will be worse off, and for no good reason?

[Conor Burns]

I said in reply to the hon. Gentleman’s first question that it would be irresponsible to go through the entire list of proposed tariffs prior to the formal announcement by the Government, which, as I indicated to him, he may not have to wait all that long to see. He spent the majority of his subsequent questions asking me to do that which I had said it would be irresponsible to do and I will not be drawn down that road, however tempting it is.

I thought the hon. Gentleman’s subsequent questions underlined the desirability of there being a deal between the United Kingdom and the European Union as we seek to leave. I hope that in the days ahead the EU will respond in the same spirit that my right hon. Friend the Prime Minister has demonstrated and show flexibility and compromise to get a deal that will pass the House. Then the tariff announcements might become redundant. That is very much our hope. The hon. Gentleman said that he found it extraordinary that so long had passed and we had yet to publish this. Many people in my constituency and around the country find it equally astonishing that it is more than three years since the UK voted to leave the EU and still people in this House are determined to thwart that democratic decision.

The hon. Gentleman asked specifically about the situation on the island of Ireland. I am happy to confirm, as I think he will know, that there will be no tariffs on goods coming from the Republic of Ireland into Northern Ireland. On parliamentary process, he will know exactly how that works. The House will have the opportunity to have its say within 60 days of the tariff regime coming into place.