Duties of Customs

Debate between Edward Leigh and Ian Murray

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

[Ian Murray (Edinburgh South) (Lab)]

With deep pleasure, I beg to move amendment (e), in paragraph (a), after “goods”, insert

“other than goods originating from the European Union”.

I will also speak to amendment (f). Both amendments stand in my name and the names of my right hon. and hon. Friends.

Let me first say to the hon. Member for Aberdeen South (Ross Thomson) that, although I did not agree with a word he said, I thought he made a good speech. However, while he and I have always disagreed on the European Union and we respect each other’s position—I am very much an elected Member of Parliament who wishes to stay in the EU; I am pro-European Union and he is very much anti-European Union—I have to point out to him the complete intellectual incoherence of the two arguments he makes. He says we can leave the single market, the customs union and European Union and have a frictionless, seamless, invisible border between Northern Ireland and the Republic of Ireland, but during the Scottish independence referendum campaign, he argued that leaving the UK single market would result in a hard border in goods, services and the movement of people. He does the fight against the scourge of independence in Scotland no good by making those contradictory arguments. Many of the arguments that our colleagues in the Scottish National party make about staying in the European Union and working with our closest colleagues and neighbours with regard to trade in goods and free movement of people completely contradict their arguments on coming out of the UK single market. These positions are contradictory, and I warn politicians that when they play with fire, they get burned.

[Sir Edward Leigh (Gainsborough) (Con)]

May I bring the hon. Gentleman back to amendment (e), to which he is the lead signatory? It would close off options and prevent us from imposing any tariffs on goods from the EU. The hon. Member for Bootle (Peter Dowd) described such closing off of options as “pathological”. The hon. Member for Edinburgh South (Ian Murray) always strikes me as a very nice chap; does he share my concern that his own Front-Bench spokesman thinks that amendment (e) is pathological?

[Ian Murray]

I anticipated that intervention, although not quite so early in my speech. I return the hon. Gentleman’s compliments—he is one of the nicest gentlemen in this House. The Labour party’s position on the customs union is that we want the UK to have tariff-free access to the European Union throughout the transition period, with the added option of the UK staying in the customs union. That is the position of our Front-Bench team. It is perfectly clear and chimes perfectly well with amendments (e) and (f).

I am disappointed that the amendments in the name of the hon. Member for Aberdeen North (Kirsty Blackman) were not selected. She has done a lot of work to bring the Ways and Means motion to the House, and I think the arguments advanced reflect the fact that we both want our country to stay in the single market and the customs union, not for ideological reasons, but because we know that the businesses of Aberdeen North and Aberdeen South require us to stay. It is impossible to suggest that the United Kingdom should have exactly the same benefits of the single market and the customs union, with a frictionless border and tariff-free access, but not keep the customs union and the single market on the table. It makes no sense.

--- Later in debate ---

[Ian Murray]

I am grateful for that intervention. I said earlier that nobody voted in the EU referendum to be poorer, yet all the analysis shows that we will be. I would be delighted, if the Minister wants to intervene, if he can point to any analysis done internally, externally or otherwise—by any other Government in any country, any think-tank, any organisation, any business organisation, any individual business—saying that what the Government are offering will make the country better off. I will let him intervene now—I know he is listening; he is just pretending to ignore me. The answer is: absolutely none. The silence is deafening. Not even the producers of our microphones will make more money, because the Minister refuses even to use his to point to just one organisation that says our position will be even remotely similar once we have left the EU. The answer is clearly none. The Government are on the wrong track and gambling everything—the family silver, everything—on a no-deal scenario.

On the impact of our leaving the customs union, I want to deal with a few particular sectors. My hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) mentioned the automotive sector earlier. The Society of Motor Manufacturers and Traders, which is an organisation whose briefings on Budgets and Bills we, as parliamentarians, trust and which I always read with great interest—it is the knowledge in motor manufacturing —has said that going off the cliff and moving to trading on WTO rules would see a 10% tariff on vehicles and an average 4.5% tariff on car components. These figures have been repeated in the House ad nauseam. It also said it would push the cost of an average car up by £1,500. We have already heard figures recently showing new car sales and levels of new car manufacturing dropping dramatically. I think that most people considering whether to buy a new car would decide not to if they knew it was costing an additional £1,500. I appreciate that the Minister does not agree, but I am more likely to believe the SMMT’s figures than the Government at the Dispatch Box saying, “Don’t worry. Everything will be all right on the night”, without giving us any detail about how that could possibly operate in the context of no customs union and no customs arrangements.

[Sir Edward Leigh]

Is the hon. Gentleman happy, then, for us to be locked for all time into a situation where we can never make a free trade deal with any country, bloc or anybody outside the EU, locked into a body with a declining share of trade and locked out of free trade deals with the growing markets in Asia and America? He is happy with that, is he?

[Ian Murray]

I am happy with the intervention—I am delighted with it—because it allows me to say three things: first, the reason the Scotch whisky industry is doing so well is partly because of EU free trade arrangements, particularly with countries such as South Korea; secondly, we are already in 57 free trade agreements; and thirdly, the hon. Gentleman’s Government have failed wholeheartedly to start to negotiate just one free trade agreement, despite all the bluff and bluster about being at the front of the queue, about their happening easily, about our seamlessly entering into these wonderful free trade agreements all over the world.

I say also to the hon. Gentleman that his intervention completely contradicts his first intervention. If he votes against my amendment and we end up trading with WTO rules, and we end up without tariffs with the EU, we will have tariffs with no one and we will ride the waves—rule Britannia—setting up more than 57 free trade agreements with every country banging at our door to trade with us. He is not listening to his Foreign Secretary or Trade Secretary when they say this is becoming much more difficult, if he thinks that free trade agreements with more than 57 countries will just appear as low-hanging fruit from this magic money tree the Government seem always to produce.

Scotland Bill

Debate between Edward Leigh and Ian Murray

Monday 9th November 2015 Commons Chamber

[Sir Edward Leigh]

I do not know if the new shadow Chancellor voted in our Lobby, but there seems to be an interesting concept nowadays in the Labour party: there is full freedom on the Labour Benches and, apparently, the Labour party leader can oppose Labour party policy on Trident and much else. As we have just heard, the shadow Chancellor opposes Labour party policy on full fiscal autonomy. This is an interesting situation. I have made my point. I do not believe this is a genuine proposal from the shadow Secretary of State.

[Ian Murray]

I respect the hon. Gentleman immensely. If he thinks back to the debate we had on 15 June, he will recall that no one in this Chamber from the SNP or his colleagues on the right wing of the Conservative party believed the figures that were put forward by the Institute for Fiscal Studies or the Treasury, or the Scottish Government’s own figures. New clause 1 is an attempt to bring some clarity to those figures so that full fiscal autonomy could benefit Scotland, rather than being an £8 billion black hole.

[Sir Edward Leigh]

I do not want to get into a debate about a black hole, the deficit and all the rest of it. I remember that I was intervened on by the hon. Member for East Lothian (George Kerevan) and I accepted that there should be transitional arrangements. I made the point that this was not a right-wing Tory trap for the SNP. This was not a device to get rid of Barnett because we were claiming that the Scottish people get £1,600 a year more. I said precisely that if there was full fiscal autonomy and we got rid of Barnett, we should retain the United Kingdom and there should be a grant formula based on need.

If, for instance, Scotland had a particular problem, as we have in Lincolnshire with the sparsity factor in relation to education provision, or with declining industries, we are a United Kingdom Parliament. We are a fraternal Parliament. I believe in the Union, I believe in our standing together. If there is a need for the United Kingdom—I called it the imperial Parliament, as it were—to help out our friends in Wales—[Interruption.] SNP Members do not like that word, but I used it advisedly. That was the term that was used during the debates on Irish home rule. It is a technical term. If our friends in Northern Ireland, Wales or Scotland need extra help from the United Kingdom Parliament, we should give that help, but it should be based on needs, not on an automatic formula based on Barnett, which is an outmoded concept that has outlived its usefulness. It is also, as I have said, very dangerous in the context of the debate on English votes for English laws.

I am sorry to take the Labour party to task, because I respect the shadow Secretary of State. Labour is making some progress, but it is still behind the curve and I do not believe it will ever get back in front of the curve in Scotland unless it is bold. I repeat the point I made back in June: whether we like it or not, we have the election system that we have. We, the Unionist parties, went to the Scottish people. We based our arguments on the Smith commission, and we lost 56 of the 59 seats in Scotland.

The hon. Member for Nottingham North (Mr Allen) can complain about that, but that is the parliamentary system we have. We have to accept that, whether we like it or not, the Smith commission was rejected by the Scottish people. If we want to save the Union—and I am as passionate about the Union as the hon. Gentleman —we cannot be behind the curve on this. We have to be big-hearted, we have to be bold, and we have to move with full fiscal autonomy and move with it now.

Scotland Bill

Debate between Edward Leigh and Ian Murray

Monday 6th July 2015 Commons Chamber

[Ian Murray]

I do not think that the Scottish Parliament would disregard them, but it is worth giving proper consideration to the Smith commission’s proposals and the cross-border issues, rather than just devolving the issue of abortion for the sake of it.

[Sir Edward Leigh]

May I have the hon. Gentleman’s view on the logic of allowing the Scottish Parliament to deal with assisted dying, which is just as emotive and important an issue, but not with abortion?

[Ian Murray]

That is the framework of the Scotland Act 1998.

Scotland Bill

Debate between Edward Leigh and Ian Murray

Monday 29th June 2015 Commons Chamber

[Stewart Hosie]

I agree entirely. None of us should be encouraging tax avoidance or evasion—not least a Tory Government, which is why I am sure the Secretary of State will want to support the full devolution of tax on earned and unearned income. It is a jolly good idea.

However, whether the devolution of income tax is extended or not, issues of implementation must be fully resolved. I ask the Secretary of State to confirm that, as part of the fiscal framework discussions, the following issues are now being fully addressed: the timing of the implementation of the Smith provisions; the length of the transition period and how it relates to the transition period for the Scottish rate of income tax; how the costs of implementation will be met; whether there will be an agreement to revisit the memorandum of understanding between the Scottish Government and HMRC for the Scottish rate of income tax, to ensure that it remains fit for purpose; the enforcement and compliance regime under the Smith income tax proposals; how gift aid and pensions relief will be treated under Smith; how the block grant adjustment will work, although that is much broader than simply income tax; the forecasting of revenues, the interaction between the Office for Budget Responsibility and the Scottish Fiscal Commission and the detail of how we calculate the transfer of revenue; and the continued role of the National Audit Office in working in partnership with Audit Scotland.

The key issue is the forecasting that will drive the revenues that the Scottish Government will get and the block grant adjustment. There has to be a fair balance between the role and input of the OBR and the Scottish Fiscal Commission, particularly given that the OBR uses Treasury numbers to drive its calculations.

As I said at the outset, I am conscious of time; we have many groups of amendments to get through and others will want to speak. I hope that the Secretary of State can answer those important detailed questions on the proposed devolution. I commend amendment 54 to the Committee.

[Ian Murray (Edinburgh South) (Lab)]

I was not able to make it to the House earlier, Sir David; I would like to express my sympathies to everyone involved in the tragic events in Tunisia. Our thoughts are with the families all across the United Kingdom, but especially the people in Scotland who have been caught up.

I want to speak to new clause 32. Part 2 of the Bill devolves significant new powers to Scotland over income tax and other taxes, and it is a real opportunity to provide the powerhouse Parliament promised by the Smith agreement. Clauses 12, 13 and 14 make provision for transfer to the Scottish Parliament of the power to set rates and bands of income tax, including, as the hon. Member for Gainsborough (Sir Edward Leigh) was pushing for, the ability to set a zero rate. The full impact of that and other tax measures should not be downplayed.

Lord Smith himself outlined that the measures proposed in the agreement would create one of the most powerful devolved Parliaments in the world. When taking taxation and spending clauses together, Scotland would be only slightly behind the Canadian provinces and Swiss cantons. Likewise, according to the OECD, in exercising power over setting both the rates and bases of income tax, Scotland would rank above sub-central legislatures in Sweden, Norway, Finland, the US and even Germany.

The economic evidence suggests that fiscal devolution can work. It is our responsibility, and that of the Scottish Government, to make sure that it does—that is the genesis of our new clause 32. However, these are hugely complicated processes; anyone who has tried to read the fiscal framework analysis in the Smith agreement will know that. I note that the Scottish National party and its new friend, the hon. Member for Gainsborough, have tabled new clauses that would seek to devolve income tax in its entirety.

I should say at the start that those are perfectly legitimate arguments that have been debated at great length at both the Calman and Smith commissions. Labour disagrees, because we believe fundamentally in the pooling and sharing of resources across the United Kingdom; that is not a criticism of the SNP position, but merely a disagreement on a fundamental broad principle. We have rightly and repeatedly criticised the Smith agreement and the Bill on a number of occasions, particularly on Second Reading and in last Monday’s debate, but I agree with the hon. Member for Dundee East (Stewart Hosie): in this instance at least, the Bill and the Smith agreement have got it right. That is probably why there are so few substantive amendments to the income tax clauses. The Chartered Institute of Taxation has echoed that by saying that the commission has made a

“pragmatic set of proposals which shows a lot of thought has been given to balancing the desire of Scots for greater tax powers against the practical obstacles to devolution”.

It is worth reflecting on the Scottish Parliament’s current position on income tax. Since 1999, Scotland has been able to vary the rate of income tax by 3p in the pound. Despite the current clamour for more powers, that power has never been used—incidentally, I believe that it has now lapsed, which shows the problems with the fiscal framework. Notwithstanding that, under the Scotland Act 2012, and as a result of the Calman commission, the Scottish Parliament has been afforded control over the first 10p of the basic rate of tax. Obviously, the Smith agreement and the Bill go much further.

The Scottish Parliament will have total control over income tax rates and thresholds and complete freedom over the levels at which those rates and thresholds are set. That is significant as the estimated devolved income tax liabilities on income tax in 2013-14 amounted to almost £11 billion. That is a considerable sum, the collection and deployment of which confers a substantial degree of responsibility on the Scottish Parliament. If they wish, the Scottish Government—of any colour—can increase or decrease that liability.

[Sir Edward Leigh]

I entirely accept where the hon. Gentleman is coming from in saying that he wants responsibility to be shared throughout the United Kingdom. However, can he explain why we should share responsibility over thresholds but not, apparently, over bands or rates? I cannot see the logic of that.

[Ian Murray]

The Scottish Parliament will have a significant ability to adjust the zero rate in particular. I hope that the Secretary of State responds to that point, because the House of Commons Library was quite clear on it. However, there has to be some pooling and sharing. Income tax is the biggest tax that everyone pays. Everyone who works pays a proportion of their income in income tax, above the basic allowance. It is important that everyone has a stake in that game. We could get to a situation in which people who did not have a stake in that game asked what the United Kingdom was for. I fundamentally believe in pooling and sharing, and the Smith agreement struck a reasonable balance.

We need a full analysis of how all the proposals will work. That is why we tabled new clause 32. Some adjustment of the powers might be needed in the future. We do not yet know what effect the implementation of the Scotland Act 2012 will have, because it does not come into force until 2016. The question that the hon. Member for Gainsborough raises relates to what we are trying to achieve with new clause 32, because the report would examine the consequences of this transfer of powers.

Scotland Bill

Debate between Edward Leigh and Ian Murray

Monday 15th June 2015 Commons Chamber

[Ian Murray]

It is wonderful. We are now being accused of voting not with the Tories, but with the Tory Front Bench, while SNP Members troop through the Lobby with the most right-wing Conservatives. It is incredible. The hon. Gentleman is not listening to the answer, although he insisted on the intervention. If he was so keen on full fiscal autonomy before he tabled amendment 89, he could have just signed new clause 3, tabled by the hon. Member for Gainsborough.

[Sir Edward Leigh]

My amendment gives what SNP Members say they want straight away, whereas their amendment is a bit of a fudge and slightly kicks the matter into the long grass. It is a bit like St Augustine saying, “Let me stop sinning, but not quite yet.”

[Ian Murray]

The SNP position can be summed up with the words, “What do we want? Full fiscal autonomy. When do we want it? We’re not quite sure.”