Leaving the EU: Customs Arrangements

Gary Streeter Excerpts

Tuesday 10th July 2018 Westminster Hall

[Several hon. Members rose—]

[Mr Gary Streeter (in the Chair)]

We have 30 minutes until the Front-Bench speeches begin and three people are seeking to catch my eye. Even I can do the maths: there are no more than 10 minutes each, including interventions.

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[Jim Shannon]

I am sure that the Government will respond in relation to the arrangements that are already in place. I do not have the knowledge of Holyhead and what is going on there to comment; but I am fully aware of what happens in south Armagh and in the Republic of Ireland and Northern Ireland, and I think I speak with some authority about that.

I want to be careful about the time, Mr Streeter; am I allowed some leniency as to extra time?

[Mr Gary Streeter (in the Chair)]

There is a minute to go.

[Jim Shannon]

My goodness! Then I will go on to mention that the Prime Minister said at Prime Minister’s Questions that we are working towards a

“Brexit that ensures that we are out of the customs union, we are out of the single market, we are out of the jurisdiction of the European Court of Justice, we are out of the common agricultural policy, we are out of the common fisheries policy, we bring an end to free movement, we take control of our borders, and we have an independent trade policy, but we are also able to have a good trade arrangement with the European Union, protecting jobs and prosperity for the future.”—[Official Report, 4 July 2018; Vol. 644, c. 315.]

That is what I wanted to hear, and I will support her to achieve that.

My party’s leader, Arlene Foster, has said:

“People voted to take back control of their laws, borders and money, not to make Northern Ireland’s constitutional framework resemble the backside of a tapestry.

To create some kind of hybrid status for Northern Ireland where we would be subject to laws and regulations set by others over which we would have no say, whilst setting us apart from our biggest market in the rest of the UK, is sheer madness. It would be the road to economic ruin and the beginning of the constitutional break-up of the United Kingdom.”

People cite the Belfast agreement as a reason to retain a special status in the Union. They say that the terminology that asks for the encouragement of cross-border trade means that we must continue the status quo. That is not the case. The only say that the Belfast agreement has in the matter is the fact that any calls for unification with Ireland must be done through a border call. That has not been done. A back-door unification through a segregated UK is not acceptable. Let us make it clear what we are saying. I look to the Minister in this matter. This customs arrangement must ensure that the integrity of the UK is retained, and that is not simply for the benefit of Northern Ireland—it is for all of us, the United Kingdom of Great Britain and Northern Ireland. As I often say to my Scottish National party friends, we are better together.

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[Jonathan Reynolds]

My hon. Friend is absolutely right. I say to all Ministers that, for many of us, this matter is not an abstract question. I am a little younger than my hon. Friend the Member for Bishop Auckland (Helen Goodman), but I grew up in the north-east in the 1980s, not far from her constituency. It was clearly a time of substantial turmoil. We had the miners’ strike and the shipyards closing. The modern prosperity of those areas has been built around a relationship with the single market, the European Union and inward investment. Many of my schoolfriends work in that Nissan plant, which is the most efficient car factory in the world. There is a plant in Mexico that disputes that, but we are pretty sure we have got it. The Government should not underestimate just how willing many of us are to fight to ensure that the next generation do not have to undergo the kind of economic turmoil that many of grew up within. They should recognise the benefits that have been brought from that relationship.

The Taxation (Cross-border Trade) Bill—many of us here are veterans of its Committee—ostensibly sets out from the Government’s point of view how we will create a functioning customs framework for the United Kingdom once we leave the European Union. Many of us have read all of that Bill, and there is nothing in it that guarantees frictionless trade through UK ports from the moment of exit. There are no measures that properly resource Her Majesty’s Revenue and Customs for the task ahead. There is nowhere near sufficient detail on the powers and provisions of the Trade Remedies Authority, which will be charged with securing vital British interests.

Frankly, it is just an enabling Bill. The political decisions that will be required to decide whether we use the powers within that Bill have not yet been taken. They may have been taken at Chequers, but we will need to see more detail on that and the political fallout. It is still fair to say that the Government have failed to offer specifics on what the new customs system will look like, how it will work and, crucially, whether it will be ready on time. Huge underlying questions remain about whether the current customs declaration service programme can deal with the sheer workload and pressure coming its way post-Brexit.

Everyone in the House agrees that we must avoid the nightmare scenario of gridlock at UK ports with lorry queues stretching as far as the eye can see, yet the Government continue to refuse to acknowledge that HMRC has had its staffing levels cut substantially—they have been cut by nearly a fifth since 2010. There are still plans to close 137 HMRC offices across the country. HMRC has 2,000 less staff today than it did on the day of the referendum. That has to bring into question our ability to deal with a future customs regime.

In contrast, we recognise the urgent need to hire and train more customs officers and HMRC staff, particularly if the Government are to meet their ambitious target of a fully operational customs system by 2019. In addition, the Public and Commercial Services Union only last week warned that strike action looks increasingly likely after the Treasury announced without consultation that the pay cap would be lifted only through cuts and increased workloads across Departments. That is not an ideal position to be in, based on where we are today.

Post-Brexit, we will need the ability to enforce against the dumping of unfairly priced goods. At the moment, those remedies are provided in conjunction with the EU, but on leaving the UK will have to enact and manage its own trade remedies. The measures are spread across a number of pieces of legislation and are of great interest and importance to UK manufacturers. The manufacturing industry remains an indispensable part of the UK economy. Some of the speakers today, particularly my hon. Friend the Member for Bishop Auckland, articulated just how specific and detailed the questions are that we are receiving from constituents on how the system will work. The complexity of modern manufacturing does not seem to tally with some of the Government’s aspirations for how the system will work going forward.

We want the Government to set out a clear path to our mutual objective of creating a functioning institutional framework for the handling of customs once we leave the European Union. Crucially, we must recognise that the final customs regime post-Brexit will be a result of the deal we strike with the EU, not the deal we strike among ourselves in Parliament or between different factions of the Conservative party. We must be ready for that regime, but we feel that the overwhelming evidence favours the UK entering into a continued and renewed customs union with the EU. The Government perhaps moved some way towards that last weekend. Perhaps they will go just that little bit further to get us the post-Brexit customs regime that this country needs.

[Mr Gary Streeter (in the Chair)]

Before I call the Minister to respond, I ask him to leave two minutes for Mr Hammond to have the final word.

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[Mel Stride]

My hon. Friend is right inasmuch as that is potentially the case if there are any inconsistencies—we might otherwise have varied our rules accordingly to accommodate an FTA. However, the Government have made it clear that although we will have total alignment at the start, we will not seek an arrangement where we will be unable to deviate from that in the future, albeit we recognise that there will be consequences for doing so.

A number of hon. Members raised the issue of preparedness, and I assure them that we will be in a good position and ready on day one if we have a no-deal situation. The Chancellor allocated £3 billion for Brexit preparations in the last Budget. Her Majesty’s Revenue and Customs received £46 million last year and around £250 million in this financial year. We have already recruited, or have in train the recruitment of, around 1,000 new staff going into HMRC with a focus on borders. We have said that we will move that figure up to between 3,000 and 5,000. Some Members mentioned the customs declaration system. The National Audit Office has suggested that we are broadly speaking where we need to be to ensure that that system comes online and live before March next year.

The hon. Member for Streatham (Chuka Umunna) asked why the EU would allow us to collect EU tariffs when there are no such arrangements with any other trading partner. We are in a unique situation. We are a very large trading partner with the European Union. We have complete alignment at the moment in regulations with that market, so we start from a position that is not occupied by others.

I think I have gone through most of the points raised by the hon. Member for Bishop Auckland (Helen Goodman). I am grateful that she said that initially she broadly welcomed the proposals, and we should all do.

My hon. Friend the Member for Eddisbury (Antoinette Sandbach) made the very important point that we are seeking an arrangement that can command the broad support of the British people—an arrangement that ensures that the UK and the EU have frictionless access to each other’s markets for goods; that provides regulatory flexibility in the way that I have described; that enables commitments to Northern Ireland to be met and the Good Friday agreement to be honoured; that sees us leave the common agricultural policy and the common fisheries policy; that allows us to deliver an independent trading policy; that ensures that, in future, all laws in the UK will be legislated for by our Parliament; that restores the supremacy of UK courts; and that ends the free movement of people and vast payments to the EU. The broad majority of people in our country will welcome that achievement.

I hope that, particularly in the debate on Monday, Parliament as a whole comes together. This is a moment in our history where there are undoubtedly significant opportunities, but also a number of challenges. I hope we see the debate through that prism, rather than through anything that is rather more narrow and party-political. On that note, Mr Streeter, I gladly give the Floor to my hon. Friend the Member for Wimbledon.

[Mr Gary Streeter (in the Chair)]

Thank you very much. Mr Stephen Hammond will have the final word.