Northern Ireland Protocol Bill

Gavin Robinson Excerpts

Committee stage
Tuesday 19th July 2022 Commons Chamber

[Stephen Farry]

There are two points to raise on that. The first is about the practicalities. My understanding is that discussions have not been taking place between the Treasury and the European Union to get these issues resolved, particularly on the situation with renewables, but the door is open. The amount may be £1 million, but we will get that as a Barnett consequential anyway. The solution is available. Across the European Union, rates of VAT, or its equivalents, are being reduced to support renewables and to help people with energy bills, so we are not asking the impossible.

The wider point is why on earth we have to go through this process in any event. The answer is probably the same one that we give on countless occasions: this is the outworking of the protocol, and the protocol is the outworking of Brexit. Decisions made about the nature of Brexit subsequent to the introduction of the protocol had to be put in place, and these are the issues that have to be managed as a consequence. We have to own the decisions taken by the Government and this Parliament, and work through them to find the best outcomes, which I believe are achievable only through negotiation.

I am not denying that there are issues on state aid and VAT, but unilateral action will not provide a long-term outcome; in fact, it will make things more difficult. We can achieve outcomes through negotiation, and I believe that the door is open for that if the Government choose to walk through it, rather than standing back, and using the issue as an excuse and a reason to construct a narrative as to why this Bill is required.

[Gavin Robinson (Belfast East) (DUP)]

I heard your positive assent, Dame Eleanor, when the shadow Secretary of State sat down, and you were rather impressed when the usual channels inquired of us how long we would take and we indicated that we would be brief. We were asked whether we would be about 20 minutes, and I aim to please, Dame Eleanor.

I am pleased to follow the hon. Member for North Down (Stephen Farry), who in many ways makes a great argument, but not, I think, the one he intended to make. What he outlined highlights starkly not just the practical application of state aid policy, subsidy policy and VAT policy, but the interface between that practical application and the constitutionally injurious position that we are left in because of the protocol. Whether the differential between VAT on solar panels and renewables was £1 million or £100 billion, the issue is not the scale of the sum; it is why this sovereign Parliament is constrained in setting VAT rules for the nation. That is the nub of it. People say that there is no constitutional harm with the protocol, and when we highlight the constitutional damage that has been done, they rubbish it and wish it away, but here is the outworking of that; one part of our country is unable to benefit from VAT rates set nationally by this Parliament.

The fact that there are two probing—and, I respectfully suggest, rather superficial—amendments before us from across the political spectrum highlights that not only is there a problem with VAT rates, subsidies and state aid under the protocol, but that a resolution is required. Why should we have to negotiate that agreed solution or outcome? It is because we have ceded sovereignty in a way that constitutionally impinges on article 6 of the Acts of Union. That is why we are in this position. If that had not been impliedly repealed, as the Government lawyers state in our High Court in Belfast, we would not have these challenges.

The Joint Committee has summarily failed in many aspects of what it was tasked to do under the Northern Ireland protocol. It did not designate anywhere near enough goods as goods that could come from GB to Northern Ireland without risk of onward transit into the single market. We raised the issue of the VAT margin on the sale of second-hand cars, for example, for which there should have been a quick fix, but there was not. Whereas a second-hand car salesman in England pays VAT only on the profit from the sale of the car, in Northern Ireland they have to pay VAT on the entirety of the sale. Why? Because of the Northern Ireland protocol. The solution is very simple, but it took months and months of painstaking negotiation, and that is but one example from scores of issues that pervade industry and business in Northern Ireland.

That was the VAT margins; then there are the importation tariffs that our businesses in Northern Ireland had to pay in importing steel, a raw product, from GB to Northern Ireland. There should not be any tariffs at all within our own country. That highlights the practical application of the constitutional harm. Again, it took month upon month of painstaking work to get agreement through the Joint Committee, but when we were on the cusp of agreeing a solution for steel, I said, “Hang on a second. I have an aircraft manufacturer in Belfast East that uses aluminium. What about tariffs on aluminium?” It remains the case that a tariff is applied to any aluminium, a raw product, coming from GB to Northern Ireland, and a further tariff is applied to anything fabricated in Northern Ireland as a result of that raw product going back to GB for further integration—a tariff on the movement of a material from one part of our country to another, and back again.

[Stephen Farry]

rose—

[Gavin Robinson]

Civil aviation parts are tariff-free internationally anyway, and large manufacturers such as Spirit Aerosystems in my constituency have an agreed workaround and are exempt, but many in the supply chain do not, including some engineers in the hon. Member’s constituency.

[Stephen Farry]

Indeed, and I am having dinner later tonight with representatives from an esteemed local company in the aerospace sector. Does the hon. Member recognise that his very valid points about tariffs point to an issue not with the protocol, but with the trade and co-operation agreement, and the gap that was rather, shall we say, irresponsibly left by the lead negotiator, Lord Frost?

[Gavin Robinson]

No, I would not agree at all with that, because the tariffs came long before the TCA and arise from the protocol. I heard the hon. Member’s suggestion that people were making a mountain out of molehill in relation to VAT on renewables; with respect to him, I think that was a bit of a stretch. I do not agree with him on that, but the tariffs on raw materials coming from one part of our country to another are unnecessary. They are a breach of article 6 of the Act of Union. That breach is constitutional harm arising from the practical application of a protocol that was, I recognise, agreed by this Parliament, but not without warning from us.

Dame Eleanor, you will recognise that none of these contributions is going into extraordinary detail on the issue. There is a complexity to it, but in the real world of politics, consumers and the businesses that we represent, we need a practical solution. Given how limited the amendments in this group are, it is fair to say not only that is it accepted that there needs to be a practical solution, but that this Bill takes us far along that path.

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Sir Geoffrey Robinson.