Customs Miscellaneous Non-Fiscal Provisions and Amendments etc. (EU Exit) Regulations 2020

Jesse Norman Excerpts

Thursday 21st January 2021 General Committees

[The Chair]

Before we begin, I remind Members about social distancing. There are clearly marked indications; where there is a tick, you can sit. On Mr Speaker’s advice, we must all wear masks in Committee when we are not speaking. Our Hansard colleagues would like any speeches to be sent to [e-mail].

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Committee has considered the Customs Miscellaneous Non-Fiscal Provisions and Amendments etc. (EU Exit) Regulations 2020 (S.I., 2020, No. 1624).

What an unexpected pleasure to see you in the Chair, Dr Huq. I welcome you to the Panel of Chairs. The instrument came into force at the end of the transition period and is subject to the urgent made affirmative procedure. The instrument has already taken effect, but still requires approval by both Houses.

Under the European Union withdrawal agreement and the Northern Ireland protocol, certain provisions of EU law continue to apply in Northern Ireland after the end of the transition period. In Great Britain, those provisions are modified to reflect the fact that the UK has left the EU. Previous amendments to the relevant legislation applied across the whole of the UK; however, further changes were needed to address the specific arrangements for Northern Ireland.

The instrument amends and modifies three areas of legislation. The first is legislation relating to customs safety and security procedures, including entry summary declarations and the registration of businesses for movements from Northern Ireland to Great Britain. The second is the application of the Customs and Excise Management Act 1979—CEMA—and the Finance Act 1994 to movements between Northern Ireland and Great Britain for non-duty purposes. Finally, the statutory instrument ensures that Her Majesty’s Revenue and Customs can continue to collect and process trade statistics data in the same way as before the United Kingdom left the EU.

Entry summary declarations contain safety and security information about the movement of goods. Declarations need to be submitted to HMRC, and are then risk-assessed before the goods arrive at the border. Those assessments are used in conjunction with intelligence-led targeting by Border Force in order to protect the security of the UK. The instrument removes the requirement for an entry summary declaration for the movement of qualifying Northern Ireland goods from Northern Ireland into Great Britain, in line with the UK’s wider commitments on unfettered access.

The instrument also retains the requirement of an entry summary declaration for the movement of non-qualifying Northern Ireland goods from Northern Ireland into Great Britain. Non-qualifying Northern Ireland goods include those that are not in free circulation in Northern Ireland, such as those subject to customs procedures—for example, inward processing—and goods that are in duty suspension or in an authorised temporary storage facility before they are moved to Great Britain. It also includes the trade of goods subject to specific obligations binding on the United Kingdom and the EU, such as those on endangered species or conflict diamonds.

Those changes are necessary in order to allow safety and security declaration requirements to be maintained for non-qualifying Northern Ireland goods that move into Great Britain from Northern Ireland, while simultaneously allowing appropriate Northern Ireland traders to maintain unfettered access to the rest of the United Kingdom market. Anti-avoidance measures are also in place to deter businesses from re-routing goods via Northern Ireland, if they do so in order to avoid United Kingdom duty or import formalities.

In addition, the legislation states that for goods arriving by sea from Ireland, the Channel Islands or other nearby ports, where an entry summary declaration is required, that declaration must be submitted two hours before the vessel arrives at a port in Great Britain. Without that amendment, earlier submission would be required, which would be impractical given the relatively short duration of crossings. It also aligns the declaration time limits to those already in place for the same sea movements in the opposite direction.

Moreover, the instrument requires economic operators to obtain a UK economic operation registration and identification number, otherwise known as a UK EORI number, to move non-qualifying Northern Ireland goods from Northern Ireland into Great Britain. An economic operator is a person who, through the course of their business, is involved in customs activity covered by customs legislation. It is necessary for those operators to have a UK EORI number starting with GB in order to make declarations or to get a customs decision in Great Britain. Registration is via a quick and simple process, and an EORI number will usually be issued straight away. This instrument also ensures that penalties apply to failures to comply with the requirements to submit an entry summary declaration, including the need to be registered for a UK EORI number.

I turn now to the second area of legislation covered by this statutory instrument, which is the regulations relating to the Customs and Excise Management Act 1979, otherwise known as CEMA, and the Finance Act 1994. CEMA is the principal Act covering enforcement provisions relating to customs.

First, CEMA provisions that relate to movements between the Republic of Ireland and Northern Ireland are revoked by this statutory instrument. That is because CEMA has already been amended to reflect the Taxation (Cross-border Trade) Act 2018, whereas EU rules concerning the movement of goods continue to apply to those movements under the Northern Ireland protocol.

Secondly, this instrument allows CEMA enforcement powers—for example, the ability to seize and detain goods—to be used for the purpose of enforcing prohibitions and restrictions on the movement of goods, people and vehicles, between Great Britain and Northern Ireland, where there is no connection to customs duty.

This instrument also ensures that the enforcement provisions at chapter III, part 1 of the Finance Act 1994 can be used in relation to the export of restricted or prohibited goods, as appropriate. Those include HMRC’s powers to require the production of documents, or to remove documents, or enter premises. That applies in Northern Ireland for the movement of goods from Northern Ireland to Great Britain.

Finally, I turn to the area of trade statistics. This statutory instrument makes minor amendments to the law on statistical data collected on the trade of goods between the United Kingdom and members of the EU, in order to take account of the Northern Ireland protocol. That is important in order to meet international reporting requirements. The instrument ensures that the legislation works properly, both in Northern Ireland, where EU statistical rules will continue to apply as a result of the Northern Ireland protocol, and in Great Britain, where they will not. As a result, HMRC will be able to continue to collect and process trade statistics in the same way as before the United Kingdom left the EU.

These are technical but important customs regulations. They help to ensure that goods can continue to move smoothly and safely between Northern Ireland and Great Britain and that matters related to those movements can continue as anticipated. I hope that colleagues will join me in supporting the customs regulations, and I commend them to the Committee.

--- Later in debate ---

[Jesse Norman]

I thank the hon. Member for Houghton and Sunderland South for her comments and also for her party’s support for this important legislation. She asked a question about the Joint Committee. As she will be aware, the present statutory instrument relates to trade between Northern Ireland and Great Britain, which is a UK matter, but general relationships as regards the Northern Ireland protocol and the relationships with the EU in relation to that, are being handled by the Joint Committee, and I would expect them to continue to be handled in that way, and appropriately so—it seems that that mechanism is working well.

The hon. Member asked a question about, as it were, the level of regulation being applied to movements across the border. I can remind her—she knows—that the Government made a commitment to unfettered access, and unfettered access for qualifying goods, as discussed, is what we have. There are, of course, non-qualifying goods and goods in duty suspension, and it has always been understood that goods for which duty has not yet been collected are ones that will need to be covered. And of course there are other things—conflict diamonds and the rest—which are governed by international agreements that already exist and which are being honoured.

The hon. Member described the situation as regards Great Britain-Northern Ireland trade as “shambolic”. I do not think that is true at all. The picture so far, in these relatively early days, has been actually rather good. Goods are continuing to move effectively between Great Britain and Northern Ireland. There are no significant queues at Northern Irish ports, and individual issues are being quickly addressed by UK authorities. The freight levels that are going into and out of Northern Ireland ports are good and are close to or at the normal levels pre-Christmas, and volumes remain significantly higher than on GB-Ireland routes. The grace periods for businesses that are operating are working well. And Northern Ireland retailers report broadly adequate stock levels.

The hon. Member mentioned the Trader Support Service. Of course concerns that she has and she raises here will be carefully attended to by HMRC and she is right to put those concerns on the public record. I will say to her that the Trader Support Service now has 28,000 businesses signed up. Of course, it largely handles trade going into Northern Ireland, which is outside the purview of this statutory instrument, but I can inform her that since 1 January more than 99% of Trader Support Service-processed declarations have been completed within 15 minutes. The vast majority of calls are answered within 30 seconds. And the service has directly supported more than 12,000 consignments. I do not think that is consistent with the picture that she paints. Of course, it is an evolving and dynamic situation, but I think we can say that so far the arrangements put in place have been effective and are working fairly well. With that, I commend the statutory instrument to the Committee.

Question put and agreed to.