Leaving the EU: Customs Arrangements

Gregory Campbell Excerpts

Tuesday 10th July 2018 Westminster Hall

[Stephen Hammond]

My hon. Friend is right. The supply chain provides jobs in all sorts of areas across the country. It is not just the big employers, but the thousands of people who are employed in their supply chain. For a small firm, the bureaucracy of restrictions such as rules of origin requirements and certificates, will be so extreme that some of them are likely to go out of business. We need to realise that.

We need a solution to those problems that protects jobs and businesses, that reflects the realities at ports, that avoids a border in Ireland and that can be fully enforced by the end of the implementation period. It is no good just relying on the technology being there, because at the moment it does not exist or it has never been tested on anything like that scale.

I am not sure that I am in universal agreement with all hon. Members, but I welcome the Chequers plan as a sensible proposal. As with everything, it will be in the detail, and as I said earlier, we are in a slight vacuum at the moment because the White Paper’s timely publication will be important, but it is not yet with us. One ambiguous area is the suggestion that maintaining frictionless trade with the EU will limit our ability to pursue new free trade deals. I will leave it to the Minister to explain exactly how those proposals will ensure that we can keep the option of free trade open.

The Government’s proposal is a welcome step towards at least recognising the economic reality that will hit us. I do not want to say that the debate has secured all the answers yet, because we will have the White Paper, but I will say that the Brexit debate has not yet faced up to some of the inevitable trade-offs between different rules around the world. If barriers are removed somewhere, they will almost certainly be put up somewhere else. That is the consequence.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman talks about inevitable trade-offs across the world. Up to now, we have talked about the UK’s fluidity in terms of trading with the EU and beyond, but does he agree that we must not lose sight of the massive political and trading changes that might take place in remaining EU countries such as Hungary, Poland, Germany and Austria after we have left?

[Stephen Hammond]

The hon. Gentleman may well be right. We cannot know what will happen. We can see tensions already and they may result in different outcomes. We have some certainty about various procedures with those nations because they are members of the EU, but we cannot have the same certainty with other countries that present that fated opportunity.

Whether we like it or not, our economy is extraordinarily and almost inextricably interlinked with the EU’s, with manufacturers benefiting from the complex supply chains. If we were to put up barriers between the UK and the EU by leaving the single market, or by having no comprehensive customs arrangement, we would have to be sure that any new trade deal could make up for putting those barriers in place.

--- Later in debate ---

[Stephen Hammond]

I will deal with my fellow south Londoner’s latter point first. I agree with him on technology. There needs to be a system in place. We may move to a technological solution, but, as I said a few moments ago, it is clearly not there at the moment, or it has not been tested on this sort of scale yet.

Secondly, I do not know of any such example, and that will obviously be challenging to the rulebook, but that does not mean that we should not put the proposition forward and therefore I respect what the Government are trying to do in that regard.

As for services, which the hon. Gentleman was clearly talking about and is 80% of the UK’s exports and economy, my hope is—I am not sure whether the Minister will be able to say so today, but it is my hope—that the White Paper may give some hints about how the Government will put in place their enhanced equivalence regime, and the proposals for that, which the Chancellor mentioned in a speech at a different Mansion House event just recently. So I hope that we will hear some news on that in the near future.

Let me go back to the idea of free trade arrangements and free trade agreements. The Treasury Committee had the privilege of going to Washington in April and we met a number of American free trade or trade arrangement negotiators. Everybody I spoke to was excited about doing a deal with the United Kingdom, which is good news. Why were they so excited? Because they told us, frankly and openly, that they can dictate the terms they want, they will get whatever they want and any agreement will give their producers unfettered access to our markets.

We have to be careful, because no one is asking the right question. Of course people want to do deals with us; why would they not want to? The question is this: on what terms of trade will those deals be done? If someone can tell me the answer to that question, I will happily sit down and conclude my remarks now.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Will the hon. Gentleman give way? [Laughter.]

[Stephen Hammond]

I look forward to the hon. Gentleman’s expert intervention.

[Mr Gregory Campbell]

Presumably on terms that are mutually advantageous to both sides.

[Stephen Hammond]

Were that so, I would sit down now, but there is no indication from any of the negotiators to whom I have spoken that that is the case. I will not go into the lurid details of how exactly they have described the prospective arrangement, because this debate has far too genteel an audience. However, I say to the hon. Gentleman that there will clearly be areas of mutual advantage, but it is very clear that those terms of trade in the short term—they may change in the future—are likely to be less advantageous.