Duties of Customs

Colin Clark Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I am pleased that the Government have finally brought forward something that is at least a bit more solid than things were previously, albeit not yet very solid.

The customs White Paper says that we should refer to the future partnership agreement and to the Northern Ireland position paper, and the Northern Ireland position paper says that we should refer to the customs White Paper—this is a complete guddle! Having read all these things, not only am I still not clear about how customs will look after the UK leaves the EU, but I am not clear about how the UK Government want customs to look. The only thing that I am even vaguely clear about is that they want the process to be as close to frictionless as possible, yet they have not made any clear commitments about exactly how they expect that to work. Let us look at some of the things they have said in their various papers. With regard to Northern Ireland, for example, they want to agree

“at an early stage a time-limited interim period, linked to the speed at which implementation of the new arrangements could take place, that allows for a smooth and orderly transition.”

I might be wrong, but I think that now is an early stage. In fact, before now would have been a good time at which to make decisions and commitments, and to be clear to business about at least what the direction of travel is, but we are not there yet. We are very close to Brexit day. Brexit day is coming in March 2019—who knows at what time?—and the Government have not been clear with businesses about even their aspirations for how customs will look.

It is undoubtedly the case that we benefit from being members of the EU single market and members of the customs union. Even those who are most vociferously in favour of Brexit agree that we benefit from those things. The lower estimate of the effect on GDP due to leaving the customs union and the single market is that we will lose 3.8%. The upper estimate of the effect of the trade deals that we will strike with Japan, the USA, the Association of Southeast Asian Nations, Canada, Australia, New Zealand and India all added together is a gain of 2.37 percentage points. That is significantly less than the 3.8% that we are going to lose, so even on the best estimates, we are going to be down. The EU is pretty close to striking a trade deal with some of those countries anyway, so the benefits to us are notional rather than actual.

The single market and the customs union continue to benefit us. We are told by the independent and respected Fraser of Allander Institute that a hard Brexit could cost Scotland 5% in GDP growth. A really interesting paper by the National Institute of Economic and Social Research told us last year that if we have these free trade arrangements instead of being a member of the single market and customs union, Scotland will lose £5 billion of exports in services alone. That is very significant. Analysis by the Scottish Government states that Scottish GDP could be around £11 billion a year lower by 2030 than would be the case if Brexit did not occur.

For those reasons and many others, we in the SNP have been clear from the beginning that we are against Brexit. We are against driving off this cliff, and we are against the incredibly hard landing that will happen when the Brexit bus hits the bottom. Despite our opposition to all these things, we are trying in this House to mitigate the impacts of Brexit. If the Government are determined to drive us off this cliff, we will try to make sure that there are fewer spiky things at the bottom for us to be impaled on.

I do not know how many Members have read the Government’s White Paper on customs, but it refers to the Government’s two proposed scenarios for the working of the future customs relationship. It also talks about contingency options for if the Government do not achieve their aspirational, bespoke deal—nobody has ever managed to get such a deal, and the Government do not really know what it is—and I think that people at home will be really interested to hear what it says. In a contingency situation, there would not be a £15 VAT-free threshold on parcels posted to people by family members, businesses and organisations in the EU. The Ways and Means motions that we are supposed to be agreeing today would allow the Government to charge VAT on gifts sent to people from the EU, which is ridiculous. If somebody gets a parcel worth less than £15 from a person in America, no VAT is payable on it, but the Government propose that such an exemption would not apply to things that came from the EU in a contingency situation. A lot of people would be pretty unhappy to discover that they will have to pay a customs charge on presents or other items that have come from the EU. Such things have not been spelled out to people or fully discussed.

I have referred to the various papers—I think we are up to four—that the Government have published on this matter. They have been pretty comprehensively savaged not just by experts, but by businesses, which are the real experts in this area. The Minister talked about roll-on/roll-off ports and the speed at which things have to come through ports. The Government have tried and failed to solve the problems with Operation Stack at Dover. Only last week, the Under-Secretary of State for Transport, the hon. Member for Hereford and South Herefordshire (Jesse Norman), put out a statement to say, “Our plans for sorting out Operation Stack are, basically, dead in the water, and we’re going to have to start again. But don’t worry: we’ll definitely have something done by March 2019 when the UK leaves the customs union and the single market.”

[Colin Clark (Gordon) (Con)]

The hon. Lady will agree that the oil and gas industry, which is important to both our constituencies, largely trades internationally outside the EU. It does not fear international trade. Is it wrong?

[Kirsty Blackman]

I am not saying that anybody should fear international trade. International trade is a very good thing, particularly for productivity, for example, which the oil and gas industry has been quite good at bringing up. The more international trade a country has, the better its productivity growth, but Brexit is not going to result in more international trade—[Interruption.] Brexit is going to result in the UK having more say over the terms of some trade deals with third countries. It will not result in more international trade, because the EU is international—it is made up of a number of other countries—and there is going to be a reduction in frictionless trade to the EU as a result of the changes. [Interruption.]

Taxation (Cross-border Trade) Bill

Colin Clark Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Colin Clark (Gordon) (Con)]

It gives me great pleasure to follow the hon. Member for Sedgefield (Phil Wilson). To the relief of all Members, I will be mercifully brief.

The UK is an international hub for foreign direct investment and seeks to encourage international trade. Recent FDI figures show that the UK has had a record number of inward investment projects and created the second-highest number of jobs ever in 2015-16. The UK remains the No. 1 investment destination in Europe. Leaving the EU does not see the end of this attitude. On the contrary, it is the Government’s aim to continue moving forward with securing deals that will boost our trade relationships with our friends and allies.

The Bill seeks to create a lasting framework for the UK customs regime. It is therefore vital to businesses and jobs in all our constituencies. Many will know that the oil industry is very important to the north-east of Scotland. The importance of securing the best customs deal possible after leaving the EU is pivotal. Many of these businesses depend on international trade, and their future prosperity will rely on what trade deal we can secure moving forward. I think of companies such as Flowline in Oldmeldrum, where 60% of turnover is from exports, the STATS Group in Kintore, and the Hydro Group in the Bridge of Don, which exports umbilicals around the world. The narrative should focus not on the fear and uncertainty around Brexit but on the potential opportunities. Aker Solution, in Dyce, a Norwegian company, which sees the opportunities in the middle east, is investing in the United Kingdom. It probably does not give two hoots about the detail but expects us to be ready.

There is a multitude of opportunities for trade in a post-Brexit world, and the Government will ensure that our relationship with the EU in future is stronger than ever. They will seek to protect that relationship. It would appear, however, that those on the Opposition Benches are entrenched in their traditional positions. In opposing all things Brexit, Liberal Democrat Members are at least consistent: they want to ignore the vote, although, some 10 years ago, their former leader Nick Clegg called for an in/out referendum on the EU. They are, at least, open about their objectives.

The Scottish National party is very interested in any tax Bill. It likes raising taxes, saddling Scotland with the highest taxes in the United Kingdom, which, I fear, is not so good for business. SNP Members’ opposition to the Bill is based on the fact that the Government cannot give cast-iron guarantees, although they know that there are unanswered questions. That amazes me. Who would think that the SNP were so conservative as to hanker after the known rather than ploughing an independent furrow?

I listened with interest to what the hon. Member for Aberdeen North (Kirsty Blackman) said about the software required for the customs systems. As a recipient of the single farm payment from the Scottish rural payments service, I understand why she is concerned. The computer system has cost £178 million to date, which is double what it should have cost. It still does not work after four years, and it has caused hardship. Perhaps the hon. Lady could have a word with Her Majesty’s Revenue and Customs to ensure that it does not buy its software system from the same company.

Meanwhile, Labour Members have myriad reasons for opposing the Bill, the main one being that we are not ready. They wish to block the legislation that will prepare us, although, as many Members have pointed out, it seeks to protect home producers against dumping, prepares ro-ro ports to be ready, lodging declarations at sea or before embarkation, and gives us the tools to deal with customs unions. Businesses want us to be prepared and employees want us to be prepared, so I ask Members to support the Bill tonight.