Taxation (Post-transition Period) Bill

Debate between John Redwood and Alison Thewliss

3rd reading & 3rd reading: House of Commons
Tuesday 15th December 2020 Commons Chamber

[John Redwood]

Indeed. I think my hon. Friend has confirmed that under the previous Prime Minister, when those of us who could not vote for her agreement said that we needed a sovereignty escape clause, we were told that that would not be permissible because it would not be effective implementation of the agreement; which was then reassuring to us, not liking the withdrawal agreement very much and realising that it was a provisional agreement and would be completed only were there to be a satisfactory outcome to the total range of talks. It was a totally artificial constraint that the EU invented that it had to be sequenced, when up until that point everybody had always rightly said that nothing was agreed until everything was agreed.

I would like to hear from the Minister a little more explanation on the detail of the Bill. As I understand it, the Northern Ireland protocol would apply only to goods that are passing from Great Britain to Northern Ireland and then on to the Republic of Ireland, or the reverse—goods coming from the Republic to Northern Ireland and then passing on to Great Britain. Am I right in thinking that that is a very small proportion of the total trade? In what ways will the Government ensure that it is properly defined, so that we do not catch up most goods in those more elaborate procedures? The bulk of the trade will be GB to Northern Ireland and back, or Republic of Ireland to Northern Ireland and back, and it should not in any way be caught up in any of these proposals. I am not sure that we do have a de minimis way of dealing with the so-called things at risk.

It is not clear how the system will work for items at risk where we agree that they are at risk—and I hope it is a UK decision about what is a risk, not some other kind of decision with EU inspectors. It would be helpful to me and the wider community interested in this debate to know how a business would proceed if it had such a good at risk, to whom it would answer, and what decisions would be made about such a good in Excise, because it sounds a rather complicated and difficult arrangement, both for the business concerned and for those who are trying to enforce.

I am trying to tease out from the Minister, in pursuit of the interests of my hon. Friend the Member for Stone and myself on sovereignty, whether we are really in control if the trade has started off from GB and is going to Northern Ireland. What kind of external intervention can the EU or the Republic of Ireland engineer—how is that fair, and how will it be determined? I think that is what we are most worried about in this piece of legislation, and we would be more reassured if there were the override that my hon. Friend proposes. I should be grateful for some explanation.

[Alison Thewliss (Glasgow Central) (SNP)]

I come to this debate with many of the same concerns as I had last week. I shall not repeat them because I think everybody is quite clear on what they were. We come to this debate with the clock ticking louder and louder, and with uncertainty ahead.

I must agree with the right hon. Member for Wokingham (John Redwood) when he says that this is a complex, complicated and difficult arrangement. Yes it is, and it is absolutely baffling why we are still not certain what will happen, with such a close deadline looming. It is impossible for businesses to know what to plan for and how they will manage this, because so much is still uncertain. The Institute for Government’s Jess Sargeant went through some of the outstanding issues in the Northern Ireland protocol still to be agreed, and these are not small things but quite significant things in many cases. There is still great uncertainty about the grace period that was talked about last week, what will happen at the end of it, and what the Government are going to do between then and now, whenever this finishes. What work will they be doing in the meantime? It does feel, quite often, that this Government put things off and leave things, and then say, “Oh gosh, suddenly I have to do that at the last minute.” They do that quite regularly.

Taxation (Post-transition Period) (Ways and Means)

Debate between John Redwood and Alison Thewliss

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Alison Thewliss]

The EU has done everything it can because it knows it is everybody’s interest to have a deal.

[John Redwood]

Will the hon. Lady give way?

[Alison Thewliss]

I will make some progress and bring the right hon. Gentleman in later on. It is interesting that Tony Connelly from RTE said that the EU nations are watching closely to ensure that the relevant clauses are effectively withdrawn from the Bill. If I were them, I would be looking very dubiously at the UK Government on that issue, because we do not know what is going to happen.

It is quite surreal to prepare for a Bill that we have not yet seen, and from which clauses that do not yet exist could still be removed or added, after being rubber-stamped by the House. The six ways and means resolutions on one side of A4 paper represent a significant volume of very detailed VAT resolutions. Resolution 6 alone refers to a Commission decision that runs to some 39 pages on the treatment of CFC group financing exemptions to state aid, and there is still no detail on specifically how the Government wish to amend the substantial pieces of taxation legislation.

We would have advance notice of a Finance Bill, for example. We would have Second Reading, Committee, and Report over an extended period. That time would allow evidence and engagement with stakeholders, but that is not so with these resolutions. To take an example, the Finance Bill earlier this year contained a solid five and a half pages on the detail of call-off stock arrangements. We debated them in the Bill Committee at great length, and it was tremendously exciting.

[John Redwood]

Will the hon. Lady give way?

[Alison Thewliss]

If the right hon. Gentleman can tell me something about call-off stock arrangements and what the Government are proposing, I will let him in.

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[John Redwood]

I would like to know why the hon. Lady supports the EU position on everything. On the question of fish, does she support the general EU smash-and-grab raid for most of the fish, or does she prefer the French version, which is to take practically the whole lot?

[Alison Thewliss]

I would prefer it if the Government would listen to the concerns of west coast fisheries in Scotland that do not want their fish to die and rot in lorries at Dover because the Government have not sorted out the trading customs.

Members of the House are expected to scrutinise the new tax regime in a fast-tracked timetable with no time for debate or consultation with businesses. There are a host of details in the VAT resolutions. I went through them this morning. I copied them and pasted them, and took them from the VAT regulations that currently exist. That runs to some 20 pages of detail on those VAT resolutions. [Interruption.] I can see the hon. Member for Thirsk and Malton waiting for me to read through those 20 pages, but I am not going to do that. I will send him a copy if he would like to read it over later. We will certainly be further forward than we are with the Government concluding anything.

There is a lot of detail in the resolutions and we need to know what exactly is going to happen with them.  There are issues on penalties relating to VAT in the Taxation (Cross-border Trade) Act 2018. There are issues to do with the importing of goods as well, and how that is going to work. The guidance on the resolution

“Value added tax (online sales by overseas persons and low value importations)

That provision may be made for the purposes of value added tax in cases involving—

(a) supplies of goods by persons established outside the United Kingdom that are facilitated by online marketplaces, or

(b) the importation into the United Kingdom of goods of a low value.”

runs to 11 pages on the UK Government’s website. There are 11 pages of detail, but we do not know what the Government are proposing to change here. We do not know what the Government are proposing to do here and that is very unfortunate. The issue really does follow on from that: we do not know what the Government are going to do and we do not have adequate time to scrutinise all the papers and see what is in them. We do not know whether the Government’s drafting will actually work, when it has been done in such haste.

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[John Redwood]

The answer is that I campaigned for this Parliament to take control and use it in the interests of the people, which is why I am making the speech that I am making. Why does the hon. Gentleman not listen to it instead of planning an intervention for a speech I am not making? I am urging the Government to take back control and use it in the way that the public would like to see them use it.

I must take up the point of sovereignty. My hon. Friend the Member for Stone (Sir William Cash) is quite right to go back to that. The simple truth about Brexit is that Brexit voters knew exactly what we were voting for. We understood the slogan “Take back control”, and we think control—the right of self-government, the right to trust people in these Houses of Parliament to make decisions for us or the right to throw them out if they are useless—is fundamental to our freedoms and living in a democracy. You do not bargain those away in some kind of dispute about tariffs. You do not argue about those in the context of making compromises.

This is the fundamental truth of Brexit. Like practically every other country in the world that is not a member of the EU, we just want to be free to make those decisions and laws that we can make and have representative institutions—a great Parliament—in order to do that. We clearly need to train some of the parliamentarians in the idea that we can make better laws here than people can make for us abroad and that we can modify European laws that we currently have so that they work in our interests better.

[Alison Thewliss]

Does making better laws not start with letting MPs see a Bill before it exists?

[John Redwood]

I do not disagree with the hon. Lady. I have said that I want to debate a real Bill. I am giving ideas to the Minister because I do not think what he has in mind for this Bill is going to quite suit me. I want to pep it up. I want to make it more exciting so that we can go out to the public and say, “This is the party that is going to level up. This is the party that knows how to recover an economy that has been damaged by covid”, and that requires lower taxes and different taxes and requires that we use the powers that only the House of Commons has. The House of Lords has very limited abilities to intervene, and on this occasion I am very pleased about that, because it nearly always wants to take the European answer, and the European answer is the high unemployment answer, the high taxation answer and the very complicated taxation answer.

VAT is an extremely complicated tax. We had to adopt its complications and we are now trying to add to those complications to try to avoid items slipping through. We are trying in these proposals to deal with small transactions that sometimes escape the net. They try to find ways of making online organisations, for example, responsible for levying tax between two people trading with each other.

Public Services

Debate between John Redwood and Alison Thewliss

Wednesday 16th October 2019 Commons Chamber

[Alison Thewliss]

I absolutely agree with my hon. Friend.

There is also great unfairness with spousal and family visas, due to the minimum income threshold. I am aware of constituents who have had to take on several jobs to meet the threshold—they are absolutely exhausted. The daft thing is that, if their spouse was able to come over, they would more than meet the threshold. The threshold is stopping that person coming over and contributing to our country.

[John Redwood]

Which Bills, if any, in the Queen’s Speech will the SNP support?

[Alison Thewliss]

We doubt whether many of the Bills in the Queen’s Speech will make it. There was an article in The Times yesterday—I do not know if the right hon. Gentleman saw it—that did not give any of the Bills a five out of five for their chances of passing. We will wait and see if any of them make it, never mind whether they have our support.

The spousal visa system leaves many people unable to see their children or their family. It is heartbreaking having to deal with that week in, week out and having children coming in saying, “When can I get to see my daddy?” If Home Office Ministers want to come to my surgery and sit in on those meetings, I would absolutely welcome it, because they should see what is happening at first hand.

My hon. Friend the Member for Glasgow North West (Carol Monaghan) will talk more about post-study work visas. We would welcome their return, because we believe that it is important to say to people who want to come and study in Scotland, “You are welcome. You will get to come here, to contribute to our society and to carry on your lives in Scotland after you have concluded your studies.” The UK Government seem to say, “Come, we will take your money for your international student visa and then you can go—we’re done with you.” That is just unacceptable; it is not welcoming in the slightest.

The Economy

Debate between John Redwood and Alison Thewliss

Thursday 22nd March 2018 Commons Chamber

[John Redwood]

I can find many examples of companies that have come pouring in with extra investment post the Brexit vote. The national figures show that we have had more jobs, investment and growth following that vote. Those ridiculously pessimistic Treasury forecasts were launched just in time for the referendum vote. At the time, I and a few others put our professional reputations on the line, said that the forecasts were completely wrong, explained why the economics behind them was misleading and why the forecasts were likely to prove widely inaccurate. We were right; the Treasury, World Bank and others were comprehensively wrong and have been rightly confounded.

I am pleased that my right hon. Friend the Chief Secretary to the Treasury agrees with me that it is a pleasure that those forecasts were wrong. She and the Chancellor are exactly right to be cautious about the latest set of official forecasts, which are likely to prove too pessimistic for the future years. It is important that we aim to beat those forecasts. We know that they keep changing the forecasts and that they tend to be too pessimistic, on average. Now is a good opportunity to go out and beat those forecasts. We should make that one of the main aims of our policy. I look forward to Opposition Members trying to help us, instead of doing all that they can to peddle misery and gloom to try to dampen spirits and reduce confidence at a time when there are good reasons to be more confident and to believe that those forecasts were wrong.

Let me take one obvious point. I have some disagreement with my Front-Bench colleagues, because I would like to stop paying any money to the European Union after March 2019. Some of my Front-Bench colleagues seem to wish to be more generous than me, but I think they agree that we must quite soon get to the point at which we are not paying any more money to the European Union. When we have full control of our money, which is what we voted for, we will have £12 billion to spend on our priorities here in the United Kingdom rather than on the European Union’s priorities somewhere else across the continent. That will give us an immediate 0.6% GDP boost. When a country is growing at 1.5% to 2%, an extra 0.6% represents a material improvement in its growth rate. We will not just get that £12 billion as a one-off in the first year; we will get it in every successive year, because we will have that money available to spend.

I campaigned in the previous election for the Brexit vote to be properly implemented, and my constituents gave me a majority knowing that that was my view. I also campaigned on the ticket of prosperity not austerity. I do want more money spent on the schools and hospitals in Wokingham and the local area. I am very pleased with our latest settlement, because health staff need more money. I am also very pleased that the weighting of the percentage increases is much more generous to those on low pay, because in my area it is extremely difficult getting by on those low pay rates. We need to recruit and retain more and to give more people in those jobs the hope that they can go on to better paid jobs with good career progression.

I want more money spent, but I do not want it spent irresponsibly. I am offering the Government the biggest spending cut that they will ever make, which is the £12 billion a year that we do not need to keep on sending to Brussels. In the spirit of the Brexit vote, I say bring our money back, take control of it and spend it on our priorities.

Before the referendum, I took the precaution of setting out a draft Budget that I would like the Government to adopt. I explained that I was very unlikely to be the Chancellor of the Exchequer and that people could not take my draft as a promise; it was a set of ideas on how that money could be spent. I suggested, mainly, more spending on areas such as health and social care and education, and also on tax reductions—getting rid of our damaging VAT rates on green products, on feminine hygiene products and on domestic heating fuel, which hit those on the lowest pay most heavily. Those are things that we cannot do for ourselves all the time that we are in the European Union.

[Alison Thewliss]

The Government’s failure to negotiate a zero-rate tampon tax does not give us great hope for any further negotiations with the EU.

[John Redwood]

I think that the hon. Lady will agree that this is one area where even she must see that getting out of the EU is a big positive, because she and I will be able to unite on something for once, and shove the abolition of this much-hated tax through the House. Is it not a disgrace that the world’s fifth largest economy and an important country cannot even control its own taxes? Over all those years in the EU, we were assured by Governments of all persuasions that tax was a red line and that the House of Commons would always be able to decide what the tax rates would be and what was going to have to be taxed. That simply will not be true until we leave the EU.

That is the first bonus. The Brexit dividend is to take control of our money and to spend it on our priorities. It will have a double advantage: not only will it give a boost to growth the first time we do it, but it will cut our balance of payments deficit. I am more worried about our balance of payments deficit than our state deficit, because the Government have done a great job in getting the state deficit down to perfectly reasonable levels, whereas the balance of payments deficit needs working on. The simplest way of cutting it is to stop sending money to the EU, because that is like a load of imports.

--- Later in debate ---

[John Redwood]

Mrs Thatcher was not always right. As her chief policy adviser, I gave her extremely good advice on the single market, which she did not actually accept. She took most of my advice on a lot of things, but I told her not to give the veto away—it was not worth it, because we needed to keep control of our own law making. However, the Foreign Office was more persuasive than I was, and that was where things started to go wrong. We were tricked into accepting what she hoped—and what a lot of British people thought—was just going to be a free market where there were fewer barriers for trade.

What actually happened was that we were entrapped in a massive legislative programme, which meant that more and more controls—often of an anti-business nature —were imposed, even when the UK did not want them and even when we had voted against them, when we were in the minority. That is why many British people fell out of love with the Common Market that they thought they had voted for in the early 1970s; they thought that it would just be about more jobs and more trade, but discovered that it was about the EU taking control. I am afraid that, on that occasion, Margaret Thatcher was less than perfect. She did not choose the right advice to follow. If she had vetoed the loss of the veto, the hon. Gentleman might have had his way and we would still be in the European Union with a rather different relationship from the one that we were forced into taking.

I turn now to the energy industry. Under European rules we were trapped in a common European energy policy, which meant that we went from being entirely self-sufficient in energy to being quite heavy importers. There is a wish to make us more and more dependent on imported electricity and gas through interconnectors with the continent, meaning that we have less security of supply and are more dependent on the good will of many people on the continent—ultimately, on Russian good will, because of the importance of Russian gas to the energy supply on the continent. Fortunately, the situation has not gone damagingly too far, and we can rescue it when we come out of the European Union. Our gas supplies can be much more dependent on Norway and Qatar, which are not members of the European Union. That is a useful precaution because we can trust those suppliers and the supply will not be subject to the same common problem that might arise in the European system.

We need to be careful about the framework of regulation. I am all in favour of cleaner air and looking after the environment, but the rapid and premature closure of coal power stations before we have good, reliable alternatives puts us in a bit more jeopardy. We have already experienced cold days, when there is big industrial demand but very little wind; it is extremely difficult to balance the system and keep up the full amount of power that people want. We may have to go on to industrial rationing in some cases. If we follow European policy and shut all the coal stations without having proper, reliable alternatives in place, running a good industrial strategy will be that much more difficult.

What would I put at the top of my list for a good industrial strategy? My No. 1 need would be a plentiful and cheap supply of energy. Having had jobs that involved running factories and dealing with transformation materials that have a high energy content, I know the importance of reliability and relatively low price for running certain kinds of process industry. The United States are now reindustrialising because they will have access to a lot more cheap feedstock and fuel as a result of their drive to have much more domestic energy, at a time when we have been going in the other direction by becoming more reliant on other systems that are not reliable and on imports. We are now finding that we are becoming short, and our power—certainly at peak demand—can be extremely expensive unless people have a long-term contract that properly protects them.

I urge Ministers to use the opportunity to rethink our energy strategy, and to put it at the top of the list for the industrial strategy they tell us they want, because it is the No. 1 requirement for a strong industry across the piece. The other day I was talking to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who reminded me just how important cheap and readily available gas is to the Potteries. We want those industries to grow and flourish—I used to be involved in them a bit—and there is huge scope for that, but it will require a sensible, UK-based energy policy.

I turn next to the vehicle industry, which I think will be just fine. It has been built, with a lot of foreign investment and local talent, into a very fine industry. But we need to remember its exact shape. The UK has the capacity to make about 1.7 million cars per annum, but it has the capacity to build 2.7 million engines. Last year 1 million of those engines were diesel. Successive Governments have done a good job of persuading large motor and engine manufacturers to come to or expand in the UK. We now have a centre of excellence in diesel engine technology, and engine production generally, for passenger cars and light vans. We should be rightly proud of that, but it is important that the Government understand this achievement and do not do things that inadvertently damage it.



Car sales continued to rise very nicely after the Brexit vote. We experienced a very strong market and there was a good trend of car sales in the UK for the first nine months after the Brexit vote, as was happening before. But in spring last year there was a sharp reduction, which has continued. Why has this happened? Well, it is nothing to do with Brexit. It is to do with policy decisions taken in the United Kingdom. Three things happened at the same time.

First, it was decided that too many car loans were being advanced, so there was a restriction on car loan credit. I think we worry too much about that. There is security: people who get car loans usually have reasonable jobs and incomes. I am pleased to say that we are not looking at a set of job losses any time soon, so I cannot really see the big problem. Secondly, there was the imposition of much higher vehicle excise duty, particularly on higher-value cars, which are particularly profitable and successful to make.

Thirdly, of course, there were the general arguments that diesel is no longer acceptable. Diesel technology in this country, and through European regulation, has reached much higher standards of cleanliness and control of exhaust. As far as we know, all these engines are more than meeting the legal requirements, because we all want cleaner air. But if the idea gets abroad that all these standards are actually going to be tightened very quickly, or that it is going to become unacceptable to run a diesel engine, it puts people off buying. There has therefore been a big collapse in support for diesel engines and cars, which explains the pattern in that market. I hope that the Government will look at a sensible compromise. Yes, we want clean air, but we also need to say and do supportive things for what is now a very important industry in our country.

There is huge scope for farming. The Secretary of State has made a start with his White Paper, but it still of a fairly high level of generality. I look forward to more detail soon. The motif of the policy must be that we can and should grow more for ourselves. In the early days after we joined the European Community, we were about 95% self-sufficient in temperate food, which is the kind of food that we can produce; we are now under 70% self-sufficient. We import a lot of food from the Netherlands and Denmark—countries with similar climates to our own—and quite a lot from Spain, which produces some things that we cannot grow for ourselves, although we could buy cheaper alternatives from South Africa or Israel if we were allowed to do so. We need to look at all that and do a better deal for the lower-income countries that can sell us food that we cannot grow for ourselves without the same kind of tariff barriers. We also need to do a lot more work on how we can grow more of our own food.

[Alison Thewliss]

The right hon. Gentleman’s point on growing our own food falls if we do not have the people here to pick that food. It will be rotting in the fields, as is already starting to happen, because EU workers who have come over to do this job are leaving, and our own workers do not want to do it.

[John Redwood]

There is still quite a large number of net inward migrants to this country. I look forward to higher wages and more automation. All these problems are perfectly soluble. There are now some good automatic systems for picking produce, if people do not want to do those jobs. I hope that there will be more productive ways of employing people so that they can be paid more—for instance, if they work smarter and have more technology to support them. That would be good for the employee and for the farming business. Some of this is about scale and some is about investment.

I hope that we develop a farming policy that still provides public money to support farms sensibly, but that will be more geared to the production and successful sale of food, particularly domestically. We want fewer food miles on the clock and rather more local produce. I hope that the policy will allow and encourage more agricultural businesses in the United Kingdom to add value to the product coming from the field, shed or farm, because that is an important part of developing a prosperous and more successful economy.

The UK has enormous scope in sectors such as the media because we have the huge advantage of the English language. We largely share that advantage with the United States of America, which is also very good at media and internet-related businesses. I look forward to the tech revolution being an important part of our better-paid jobs and in the increase in jobs in the future. Once we are out of the EU, we will also be able to choose our own tax and regulatory regimes. I trust that we will choose a best-in-class, world-leading regime for both tax and regulation. Although I understand some of the irritations that the EU and others have with existing large technology companies, it is important that we also understand how phenomenally popular their services are, how hugely important they are as wealth generators, the choice they offer customers and the new jobs that they will create. We therefore need a tax and regulatory regime that is fair and is not part of a trade war between the EU and the United States of America, which seems to be developing at the moment in an unfortunate way.

Infrastructure is very important. One thing that perhaps unites the House is that we would all like more investment in infrastructure, although we then have disagreements about pace, style, and ways of financing it. There is huge scope for more infrastructure in this country. If we wish to take advantage of our greater freedoms and the kinds of business developments I have been sketching in different sectors, we will certainly need a lot more capacity in road and rail. Rail capacity can be increased more cheaply and more rapidly if we go over to digital controls. One of the features of our railway system is that we run very few trains an hour on any given piece of track. With better controls, we could increase the number of trains we ran on existing track—a quicker and cheaper solution than having to build lots of new tracks.

We are going to need improved road transport. Internet styles of purchasing require road capacity for all the van deliveries that will be made when people have bought on the web. Road capacity is also needed for those who still like going to a traditional shop and expect to find somewhere to park when they do so. Only the shopping centres that have really good access and really good parking are likely to flourish in today’s world, because people naturally want convenience. I trust that the Government will find sufficient public capital support for these necessary programmes, but will also be imaginative in finding new ways of harnessing private finance where that is appropriate, as it clearly is in areas like energy and communications where there are defined revenue flows that should be financeable through the private sector.

The aim of Brexit is to cheer the country up, to get wages up, and to get jobs up. So far it is all going reasonably well. There are more jobs after the Brexit vote, despite the false forecasts. Pay is going up a bit. We would like more improvement in real pay, and it is good to see some moves being made in the public sector. The big Brexit bonuses we want comprise spending our own money and knowing when, how much, and what we are going to get for it; having a fishing policy that makes sense both for British fishermen and for British fish; having a better agricultural policy that means we can grow more of our own food; and having an energy and industrial policy that supports more investment and more growth.