Taxation (Cross-border Trade) Bill

Damian Collins Excerpts

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

[Mel Stride]

I am afraid that I have to disagree with the hon. Gentleman. The Bill takes a balanced approach to the issue of protecting our domestic producers including, very importantly, steel producers. By “balanced approach”, I mean that we should also take into account the interests of consumers of those imported goods and businesses that use them in their processes. If the hon. Gentleman looks closely at the measures—we will do that in Committee—he will see that they provide for compensation where dumping has occurred and for appropriate sanctions to be made.

The economic advantage to the UK is very important, and that means continued UK-EU trade that is as frictionless as possible. It also means avoiding a hard border on the island of Ireland and establishing an independent international trade policy. As we look forward to the next stage of our negotiations with the European Union, we see that the nature of our future customs relationship with the EU, and therefore the legislation that will allow the Government to give effect to any such relationship, become all the more significant.

[Damian Collins (Folkestone and Hythe) (Con)]

My hon. Friend mentions the need to avoid a hard border on the island of Ireland. I know that he will also agree that we need to avoid an effective hard border on the channel crossing points, particularly the channel tunnel and the port of Dover. That is our principal road freight route for goods back and forth across the continent of Europe. It is essential that we maintain frictionless trade.

[Mel Stride]

My hon. Friend is entirely right. That is why we have consulted ports so extensively, most importantly that of Dover, which I visited myself. I met the port authorities down there, and members of Her Majesty’s Revenue and Customs have been closely involved in consultations with the ports. Of course, the Bill allows the facilitations that we will require—both unilateral and bilateral—to ensure that the smooth flow of trade occurs at those vital ports. It is particularly essential that we do not have any delay to the processing of imports and exports that go through roll-on/roll-off ports.

--- Later in debate ---

[Damian Collins (Folkestone and Hythe) (Con)]

This debate and the presentation of this Bill are incredibly timely. Before Christmas, at the European Council meeting, the Prime Minister moved our negotiations on leaving the EU on to the second phase, with the agreement of the other member states, and we will now discuss the future relationship and the future trading relationship. It is important that, so soon after that Council meeting, although there is still a lot more to be done and negotiated in terms of how that relationship will work, we are debating a vital piece of enabling legislation that gives the Government the legal power to implement whatever is negotiated.

We could have a different scenario, where the Government could negotiate without any legal basis to implement the agreement. They could just negotiate on the basis that they would then have to bring legislation forward at some point in the future. There is no guarantee there would be the time to do that, and it would be a rather strange process to go through. It is far better that the Government are able to pass enabling legislation that gives us the legal authority to implement what they negotiate. At least then, when negotiating with the Europeans, they know that we can implement what we negotiate and we will not be left high and dry because we have run out of time.

[Sammy Wilson]

That is an important point, and it has been reflected in the speeches from Members from two Opposition parties. Does not the hon. Gentleman therefore find it rather odd that on one hand they talk about urgency, yet on the other hand they have tabled motions saying we should not proceed with this Bill on Second Reading?

[Damian Collins]

Absolutely. If we waited until every question that has been posed today could be answered—if, indeed, they can all be answered—before we introduced legislation, we could end up with no time for scrutiny or debate, or to implement the legislation in the first place. We can enter into the negotiations on our future trading relationship with any sort of purpose only if it is clear that we have in place the legal frameworks to implement whatever we agree and only if the EU negotiators can see that the UK has the legal basis to implement its own regime and requirements, whatever the trade deal or scenario.

The hon. Member for Aberdeen North (Kirsty Blackman) presented a compelling amount of detail in her speech. It is tempting to lay out all the difficulties and say that there is no point in introducing legislation until we have an answer to all the problems that seem insurmountable, but that would be entirely the wrong way to go about it. We need to make sure that the enabling legislation is in place. It can also be tempting—I say this as someone who campaigned for Britain to remain in the EU—to rerun all the arguments that were made during the referendum, as if the referendum had not happened, but it did happen and the country voted to leave the EU. It is now our responsibility to put in place the legal framework that enables the Government to negotiate so that we can put in place the best possible deal. It is far better that we do that now than in a year’s time.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

I do not know whether my hon. Friend agrees, but the speech we have just heard from the hon. Member for Aberdeen North (Kirsty Blackman), in which she highlighted some important issues relating to cumulation and other matters, is an example of why the Bill is such a good part of the process. It is giving people the opportunity to highlight important issues for the Government.

[Damian Collins]

Absolutely, and that is the spirit in which the comments made by the vast array of trade organisations and businesses that are seeking to engage in the process should be interpreted. They are giving us notice of the issues that they believe we need to get right for their sectors. That does not mean that there is a concern that we will not get those things right, but they are right to flag up the things that we have to get right.

I was particularly pleased to hear the Financial Secretary say in his opening remarks that the Government intend to establish a system of frictionless trade at our major ports and other major places of trade with the EU. That is very important for my constituency in Kent, just as it is incredibly important for Northern Ireland. We need to ensure that trade can flow freely.

Ministers from the Department for International Trade will be working hard not only to put in place good trade deals that continue the free trade agreements we currently have with other countries as a consequence of our membership of the EU, but to negotiate trade agreements with other countries around the world. Such agreements will be incredibly important for our future success, but there is something about trade that is rather inevitable: countries tend to trade a lot with other countries to which they are near, because the cost of such trade is obviously far lower. There is a reason why we trade more with Belgium than with Brazil—although I wish we could trade more with Brazil—and that is that Belgium is very nearby. The cross-channel routes and the routes across the border in Northern Ireland are fundamental for our economic success. That is where frictionless trade really matters so that people can move their goods quickly and speedily. In many businesses, particularly those that work in food or with cut flowers and other perishable goods, the quick, “just in time” movement of goods is vital. Businesses on both sides of those borders will be affected equally.

I was pleased to hear my hon. Friend the Member for Morecambe and Lunesdale (David Morris) talk about the initiative he will be undertaking with the hon. Member for North Antrim (Ian Paisley) to bring a Wrightbus down to London. I visited the Wrightbus factory in Ballymena, where the company makes a fantastic product that has become an icon of the London streets. Although the Wrightbus Boris buses do not operate on continental Europe, I urge my hon. Friend and the hon. Gentleman to continue their journey down to my constituency and through the channel tunnel, because it is so important to maintain the flows of trade not only between the countries of the UK but between the UK and continental Europe. A third of the trade of Warrenpoint port in Northern Ireland runs from the Republic of Ireland to Northern Ireland, into mainland UK and on to continental Europe. We need to keep trade running frictionlessly through all those points.

[Mr Jim Cunningham (Coventry South) (Lab)]

People could not disagree with a lot of what the hon. Gentleman is saying, but in the real world at some point we are going to face tariffs, whether it is outside his constituency, on continental Europe or around the rest of the world. If we want a clue about that, we should look at the recent actions of Donald Trump’s Administration in relation to Bombardier. Food supply chains could also be threatened.

[Damian Collins]

The hon. Gentleman makes an important point. Manufacturing is such an important part of the economy of Coventry, where his constituency is. Tariffs are important. Of course, we want a free trading environment among the countries with which we trade, not only in Europe but around the world. I looked back at one of Margaret Thatcher’s speeches—I am sure the hon. Gentleman is just as keen a student of those speeches as I am—to see how she made the case for the single market to businesses before it was created. She rightly highlighted that, although trade without tariffs is obviously important, what is much more important is getting rid of artificial barriers to trade, such as the restriction of goods from markets because they are not seen to comply with certain standards or the creation of artificial delays that can make trade in goods that need to be moved quickly uneconomic. It is just as important to get trading agreements and the flow of trade right as it is to get the tariff situation right.

[Stephen Kerr]

My hon. Friend is making a powerful speech in favour of frictionless, free and fair trade. I hope he agrees that, as we go through the Brexit process, it is important that nothing is done to create any barriers to the internal operation of the UK market, by which I mean Great Britain and Northern Ireland.

[Damian Collins]

My hon. Friend makes an important point. Frictionless trade is just as important between Northern Ireland and Great Britain as it is on the island of Ireland. It is vital to the economies of the island of Ireland and Great Britain and to everyone who lives and works on the island of Ireland and in Great Britain. As I said earlier, because of our proximity and the integrated nature of so many of our businesses, that trade is so important, and it is vital to the protection of so many jobs. There should be no artificial borders in the Irish sea, and nor should there be borders that create friction on the island of Ireland or with the continent of Europe across the English channel.

[Sammy Wilson]

The hon. Gentleman makes an important point that is sometimes overlooked in these debates: it is vital for the Irish economy that there is no line of demarcation or border on the Irish sea, because its main market for either the sale or the transit of goods is Great Britain. If we simply talk about the border between Northern Ireland and the Republic, we miss the point: there has to be integration among all the islands.

[Damian Collins]

That is absolutely right. As the hon. Gentleman will know, a third of the goods processed through Warrenpoint port in Northern Ireland come from the Republic of Ireland, so it would do great damage to the economy of the island of Ireland were artificial barriers to be put in place. The same is true for goods that move through what is effectively the Great Britain land bridge to the continent of Europe. A large amount of goods from the Republic of Ireland are exported to continental Europe through ports such as Dover, as well as through the channel tunnel, and it is vital for so many businesses and for the free flow of trade that they are not treated as goods being imported from a third country but allowed to flow freely just as they currently do.

It is important that we make sure not only that we get the tariff regime and the rules of trade right, but that part of our preparedness is about ensuring that we have the right physical infrastructure alongside the enabling legislation that the Government are seeking to pass. I was really pleased to hear the Chancellor announce £3 billion in the Budget to help the UK to prepare the physical infrastructure it will need for trade. Technological solutions can be put in place to make sure that trade can flow without restrictions and frictionlessly at the key trading points and the key points of entry to other markets, but the infrastructure also needs to be put in place now.

It is particularly important for my constituents in Kent that we provide a long-term solution to deal with issues such as Operation Stack. If trade is being held up, for whatever reason—be it bad weather in the channel or strike action in one of the French ports—we need the physical infrastructure in place to keep Kent’s roads open. As part of our preparations for a future in which we can keep goods and services flowing freely around our key points of trade, it is important that we have in place the right physical infrastructure. That includes a commitment to deliver the Operation Stack relief lorry park in Kent. I was pleased that the Financial Secretary was able to confirm before Christmas that the £250 million that the Government had earmarked for the delivery of that vital piece of infrastructure is still there, and I hope we will see good progress on the design this year. Not only can that relief lorry park be considered as a piece of infrastructure for dealing with Operation Stack, which can happen at any time—it has happened while we have been a member of the EU and could happen again in future—but that physical infrastructure will be there in case we need it because of delays in the movement of goods.

[Anna Soubry (Broxtowe) (Con)]

My hon. Friend is making a good speech in which he is, of course, advocating free trade, in which we all believe—or at least Conservative Members do. Does he, like me, see the profound irony in our discussing how we are going to have to have new technologies, put in new systems and do all these other hugely complicated, very expensive things, in order to cope with leaving the customs union, even though we believe in and want free trade? Does he not think it would be much more simple and sensible just to stay in the customs union?

[Damian Collins]

My right hon. Friend makes a compelling point, but we have to accept that other political issues are being considered alongside the management of trade: our general future relationship with the European Union as a partner European continental country, but not as a member of the EU itself; whether we should have arrangements whereby the level of regulatory alignment is such that we effectively become a satellite state—a client state—of the European Union and not an independent one; and the extent to which we have to fully comply with and implement rules that we have no further part in designing in future. That is what creates difficulties around membership of the customs union and the single market. As she knows as well, the issue of membership of the single market also comes alongside considerations around the issue of free movement of persons as it is defined now.

If there is a way, through negotiation, to resolve those difficulties and to keep a system of trade that we have got used to and that works so well for our economy, without any deviation from the current system at all, and to deliver the other political objectives that people voted for in the referendum, I will welcome that. However, what we are talking about here is making sure that we prepare, both through the laws and the physical infrastructure, for a different scenario whereby, if we are not able through negotiation to replicate what we have now, we have a system in place that can deliver something that is just as good.

There are many unanswered questions because that process is still being negotiated, but, as I said at the start of my remarks, it is far better that we have the debate about what we want the system to look like now, at the same time as giving the Government the legal power to negotiate and implement what they want in future. Now is the right time to be having that debate. I am sure that there will be plenty of other opportunities for the House to debate the specifics of the deal as we progress through the negotiations this year. But now is the right time to be having this debate.

As I have said, maintaining a system of free trade is clearly what we all want and what we want to see delivered. We need to ensure that we have the legal infrastructure in place and invest in the physical infrastructure, so that we can implement the deal that we have, and in particular keep frictionless trade on the island of Ireland and at our key points of trade in Kent —at the channel tunnel and at the port of Dover—with continental Europe.