Taxation (Cross-border Trade) Bill (Eighth sitting)

Jonathan Reynolds Excerpts

Thursday 1st February 2018 Public Bill Committees

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I beg to move amendment 13, in clause 39, page 27, line 12, at end insert—

“(aa) the interests of manufacturers in the United Kingdom,”.

This amendment requires the Treasury to have regard to the interests of manufacturers in considering the rate of export duty.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 79, in clause 39, page 27, line 17, at end insert

“and

(e) the impacts on sustainable development.”

This amendment requires the Treasury to have regard to the impacts on sustainable development in considering the rate of export duty.

Amendment 119, in clause 39, page 27, line 17, at end insert

“and

(e) the public interest.”

This amendment requires the Treasury to have regard to the public interest in considering the rate of the export tariff.

Amendment 142, in clause 39, page 27, line 17, at end insert—

“(e) the interests of producers in the United Kingdom.”

This amendment requires the Treasury to have regard to the interests of producers in the United Kingdom in considering the rate of export duty.

Amendment 143, in clause 39, page 27, line 17, at end insert—

“(e) the desirability of maintaining United Kingdom standards of food safety.”

This amendment requires the Treasury to have regard to the desirability of maintaining United Kingdom standards of food safety in considering the rate of export duty.

Amendment 144, in clause 39, page 27, line 17, at end insert—

“(e) environmental protection.”

This amendment requires the Treasury to have regard to environmental protection in considering the rate of export duty.

Amendment 145, in clause 39, page 27, line 17, at end insert—

“(e) the welfare requirements of animals as sentient beings.”

This amendment requires the Treasury to have regard to the welfare requirements of animals as sentient beings in considering the rate of export duty.

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[Jonathan Reynolds]

Welcome to the Chair for the final sitting of the Committee, Mrs Main.

As is explained in the explanatory notes, the Bill does not establish the rate of export duty, but the power to do so is contained in it so that it can be introduced subsequently through regulations made by the Treasury. As we discussed when considering amendment 1 to clause 8 during my first speech in Committee, it is vital to pay careful attention to the needs of manufacturers for the future of our economy. The Committee will be pleased to hear that I will not repeat that speech in its entirety, although I am sure colleagues would like to hear parts of it.

The representatives of the manufacturing industry to whom we spoke in our helpful evidence sessions on Tuesday 23 January amply illustrated why such a consultative approach is important, by raising many legitimate considerations to which answers are required. Given the amount of detail in the Bill that is left to secondary legislation, all manufacturers seek is minimal reassurance that their interests will be taken into account. They are not asking for special measures, but pointing out that we are on the cusp of a complex post-Brexit world and that clarity is needed as soon as possible. It has been the Government’s choice not to include that in the Bill, as we have discussed, but we need some middle ground to address the resulting lack of certainty, given how it has inhibited the ability of UK industry to prepare for that future landscape.

As we draw towards the end of the Committee, I am only too aware that we are becoming increasingly committed to the process of adding detail by secondary legislation. That makes it even more important for the vital consultation with manufacturers to be enshrined in the Bill. We will not necessarily seek to press the amendment, but I hope that the Minister, through his comments, can provide reassurance for manufacturers at this stage.

[The Financial Secretary to the Treasury (Mel Stride)]

It is a pleasure to serve under your chairmanship again, Mrs Main.

The amendment would add the interests of manufacturers to the list of factors the Secretary of State and the Treasury respectively must have regard to when recommending or imposing a rate of export duty. The Government acknowledge the wide-ranging impact that any future imposition of export duty could have on the UK economy and that of our trading partners. We would consider imposing an export duty only in wholly exceptional circumstances. Of course, in practice the Secretary of State and the Treasury would have regard to many factors. The provision requiring the Secretary of State and the Treasury to have regard to productivity, trade, consumer interests and competition is sufficient and broad enough to encapsulate the economic and strategic interests of the whole of the United Kingdom.

Taking into account the interests of manufacturers will often form part of the Secretary of State and Treasury’s duty to consider how export duty will maintain and promote productivity in the UK, but it would be inappropriate to specify an exhaustive list of factors in the Bill. The Government believe that the scrutiny and procedure set out in the Bill are proportionate and enable us to respond quickly to exceptional circumstances to implement an export duty.

Amendment 79 would add the impacts on sustainable development to the list of factors the Secretary of State and Treasury must have regard to when respectively recommending a rate of export duty or considering whether to impose export duty, and the rate of duty applicable. Where relevant and possible, the Government will take into account the impact of export duty on sustainable development. However, it would be inappropriate to specify an exhaustive list in the Bill. Certain factors will be relevant in certain cases, and their importance may change over time.

Amendment 119 would add the public interest to the list of factors the Secretary of State and the Treasury must have regard to when respectively recommending a rate of export duty or considering whether to impose export duty, and the rate that should apply. The provision requiring the Treasury and the Secretary of State to have regard to productivity, trade, consumer interests and competition is sufficient to encapsulate the public interest by considering the economic and strategic interests of the whole of the UK.

Amendments 142 to 145 provide additional factors that the Treasury and Secretary of State must have regard to respectively when considering whether to impose export duty and the rate that should be applied. Clause 39(4) is broad enough to cover the economic and strategic interests of the UK. In particular, I question the necessity of considering food standards, environmental protection and the welfare of animals when setting a tax on goods leaving the United Kingdom. The amendments would not achieve the presumed aim of preserving standards in the UK. Lastly, the interests of producers are intrinsically linked with competition, productivity and the promotion of trade, which are already included in the Bill. I therefore urge hon. Members not to press the amendments.

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[Jonathan Reynolds]

All the amendments relate, as ever, to the lack of detail in the Bill. The Minister has provided some words of reassurance, which are appreciated, but in the end it comes back to the point that very important details, which industry needs to plan, are missing from the Bill. However, I think that that point has been made, and for that reason I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Anneliese Dodds]

I beg to move amendment 14, in clause 39, page 27, line 20, at end insert—

“() by a relevant select committee of the House of Commons, or

() contained in a resolution of the House of Commons.”

This amendment requires the Treasury to have regard to recommendations of any relevant select committee of the House of Commons or contained in a resolution of the House of Commons in considering whether to exercise the power to impose export duty.

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Amendments 83 and 84 are all the more important given the unprecedented steps taken by the Government, in a shift of constitutional power that has been recognised right across the piece, including by many of the witnesses who came before us. I have repeated that issue already, and no doubt it will be repeated time and again. I may borrow the Minister’s cut and paste button to repeat it—

[Jonathan Reynolds]

Two buttons.

[Peter Dowd]

Yes, two buttons: control and whatever it is. As I have mentioned, we are not alone in this view, which is shared by the Delegated Powers and Regulatory Reform Committee. The Government ought to respond to our genuine concerns in this matter, and we will persist in asking them until they do respond to our genuine concerns and those of other agencies, bodies, organisations and people.

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[Mel Stride]

I thank the hon. Lady for those well-made observations. We certainly want to ensure that whatever transition there is to the new regime for small parcels is handled correctly, for exactly the reasons that she has given. I am very close to that as a Minister; in fact, I will meet Royal Mail next week to discuss exactly those points. I will, of course, be happy to share that information and take any further questions that she might have.

Question put and agreed to.

Clause 44 accordingly ordered to stand part of the Bill.

Clause 45

General regulation making power for excise duty purposes etc

[Jonathan Reynolds]

I beg to move amendment 85, in clause 45, page 31, line 24, at end insert—

‘(3A) The power to make regulations under this section—

(a) insofar as it is exercised to replicate or apply, with or without modifications, any EU regulations mentioned in section 47(1), ceases to have effect after the end of the period of two years beginning with exit day; and

(b) insofar as it is exercised to make provision of the kind described in subsection (2)(k), ceases to have effect after the end of period of five years beginning with exit day.”

This amendment, together with Amendment 86, limits the duration of certain delegated powers under Clause 45 to periods aligned with other proposed limitations relating to withdrawal from the EU and to customs unions.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 86, in clause 45, page 31, line 25, at end insert—

““exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”

See explanatory statement for Amendment 85.

Clause 45 stand part.

Amendment 135, in clause 48, page 33, line 29, at end insert—

“(5A) No regulations may be made under section 47 unless a draft has been laid before, and approved by a resolution of, the House of Commons.”

This amendment requires regulations under Clause 47 to be subject to the affirmative procedure.

Amendment 136, in clause 48, page 33, line 30, leave out “47” and insert “46”.

This amendment is consequential on Amendment 135.

Clause 48 stand part.

[Jonathan Reynolds]

The Member’s explanatory statement for amendment 85 states:

“This amendment, together with Amendment 86, limits the duration of certain delegated powers under Clause 45 to periods aligned with other proposed limitations relating to withdrawal from the EU and to customs unions”

in parallel legislation. In many ways, it continues the conversation we had during debate on the last group.

Effectively, the amendment would introduce a sunset clause to clause 45: a measure to prevent the indefinite extension of delegated powers by HMRC commissioners where they relate to excise duty. We have discussed many times—in some ways, we have discussed it in every debate—the democratic implications of the Bill. The addition of sunset clauses has been proposed by many partners as a solution to the need to safeguard against potential abuses of the powers in the Bill. As has been said many times, the House of Lords Delegated Powers and Regulatory Reform Committee, in its report, said clearly that the Bill transfers substantial powers to the Executive—that is not in doubt on any side of this Committee. The question is whether they are proportionate and whether appropriate safeguards are in place.

I listened carefully to the Minister during discussion of the last set of amendments about the differences between the European Union (Withdrawal) Bill and this Bill, but I must say that I am not convinced that the differences are substantial enough to envisage a completely different set of amendments’ appropriateness in terms of the use of sunset clauses. As the Lords Committee said,

“the Treasury’s delegated powers memorandum acknowledges that the Bill has been drafted to cater for various contingencies that might never materialise, for example, if the UK leaves the EU without a negotiated agreement.”

I do not agree that the European Union (Withdrawal) Bill and this Bill represent such wildly different circumstances that one set of amendments is appropriate for the other Bill but not for this one. The Opposition are firmly in agreement with the Lords Committee that a sunset clause is an appropriate manoeuvre to redress the balance of power. We must bear in mind that the use of delegated powers carries a risk of abuse by the Executive, which is not something the Opposition could ever support. Rather, it is our duty at this stage to check the powers of the Executive and ensure that we are not giving them carte blanche to change the balance of power permanently in their favour.

I also stress that the amendments offer generous provision in terms of timing. It varies for each item, with sunset clause terms of either two years or five years from EU exit day for the powers in question. That should give the Government ample opportunity to adapt, even if we face the nightmare “no deal” scenario. It makes little sense to the Opposition that such provisions are included in the European Union (Withdrawal) Bill, but that there are no corresponding provisions in this Bill. Adding these provisions to the Bill would be an important step in providing a much-needed check to delegated powers.

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[Mel Stride]

Clause 45 provides powers to make changes to ensure the UK has a fully functioning excise regime after EU exit. The powers mean that the UK will be able to implement a range of negotiated outcomes. They also ensure that, after EU exit, we retain the same ability to legislate for excise that we have now.

EU legislation impacts on a number of areas of the excise regime. One example is the existing holding and movement regime for excise goods, which is based on a framework set up by the European Union. It allows the free movement of goods while ensuring excise duty is collected in the country of consumption. The UK needs the ability to make changes to the excise regime to reflect a range of negotiated or non-negotiated outcomes. The power will also ensure that, after EU exit and the repeal of the European Communities Act 1972, we maintain the same ability to legislate for excise as we have now.

The clause gives the Government a power to make regulations generally for the purposes of excise duty on alcohol, tobacco and fuels. It includes, among other matters, when the excise duty becomes due, who will be liable for excise duty, reliefs and the rules around the holding and movement of excise goods. It also ensures that, after EU exit, the Government have the same ability to legislate for excise as they have now. It does not, however, enable HMRC to set excise duty rates.

The excise regime is largely set out in secondary legislation made under various existing powers. However, we can anticipate that the primary legislation that underpins it may need to be amended. The clause allows any regulations made under this section to amend or repeal primary legislation using secondary legislation. It does not allow secondary legislation to amend or repeal provisions in the Bill.

Any negotiated outcome could include key administrative features such as the collection, control, management and enforcement of excise duties. Changes could also be needed in those areas if there is no negotiated agreement. The goods it could be applied to are alcohol, tobacco and fuels.

On repeal of the 1972 Act, we will retain the legislation made under it, but we will no longer have the power to amend that legislation. Clause 45 will ensure there are no gaps in HMRC’s powers to deliver the necessary changes to the excise regime as a consequence of EU exit. For example, the Government made consequential amendments to primary legislation in the last substantive overhaul of key excise secondary legislation in 2010. They relied on the powers provided for by the 1972 Act, which will not be available in future. The power could also be used to ensure that there are clear arrangements in place so that goods in transit between member states before EU exit are not subjected to additional controls or requirements after EU exit.

The power has, however, been limited in a number of ways. It does not allow any changes to duty rates. Clause 49 ensures that the power is no wider than necessary. It is limited to making provisions in respect of the excise duties on alcohol, tobacco and fuels. Those are the duties most impacted by EU legislation and EU exit. It is important that the Government can act quickly in case of changing circumstances, but it is also vital that Parliament is able to scrutinise the use of these powers. Clause 48 sets out the proposed scrutiny arrangements.

Amendments 85 and 86 seek to limit the duration of the power contained in clause 45 where it is exercised to replicate or apply EU regulations. They also intend to limit the duration of the power to make provision for excise duties in connection with the UK forming a customs union with other customs territories. The Government oppose the amendments. The Bill is drafted to cater for a range of long-term outcomes from negotiations on the future relationship with the EU. We do not yet know the outcome of negotiations with the EU or exactly when the final outcome will be confirmed. It would therefore not be prudent to include a sunsetting clause.

The clause provides the Government with the power to legislate for the excise regime to implement the outcome of negotiations. Just as importantly, it ensures that we can legislate for excise in the future—after exit—with the same flexibility we have now. It is essential that we have a fully functioning excise system on EU exit and the powers contained in the clause are necessary to achieve that.

If the amendments are accepted, after the relevant sunset period the Government’s ability to legislate quickly to respond to changing circumstances and future business processes will be limited. For example, the current excise duty suspension arrangements secure the movement of goods through a number of different countries, potentially over a large geographical area. On leaving the EU, the movement of excise duty suspended goods may be permitted only within the territory of the UK. The clause may allow further simplifications for compliant traders if the risks to revenue are considered to be lower in the United Kingdom.

Amendment 85, relating to subsection (2)(k), refers to clause 31, which allows for arrangements that establish a customs union, as we debated, between the UK and territories outside the UK to be given effect by Order in Council. If the UK forms a customs union with any other customs territory, the Government may need to adapt the excise regime accordingly to ensure that the UK can enforce and maintain the operability of the excise duty regime. For example, if an arrangement is made with any territory where free movement of goods is allowed now or in the future, the UK may wish to ensure that excise duties can be controlled and collected without customs formalities at the border, as is now the case. The requirement to make such arrangements may not be limited to the period following EU negotiations or the implementation period.

Clause 48 sets the procedure for making regulations under clauses 44 to 47. The powers in clauses 44 to 47 are necessary to ensure the alcohol, tobacco and oils excise duty regimes continue to function as required after EU exit. The clause ensures the use of those powers is subject to appropriate scrutiny. It also includes provision to streamline procedures where the new excise powers are combined with some existing powers. That gives the Government the flexibility to make the changes to the excise regime needed after EU withdrawal. A smaller number of statutory instruments will therefore be required and the legislation will remain accessible to users.

Clause 48 sets the procedure for exercising the powers in clauses 44 to 47 and gives further detail to their scope. On procedure, the clause sets out four scenarios in which regulations made using the powers will be subject to the made-affirmative procedure: first, where the changes amend or repeal any Act of Parliament; secondly, where changes extend the descriptions of goods on which excise duty is chargeable; thirdly, where changes extend the cases in which stamping or marking of goods is required; and fourthly, where changes restrict any relief or rebate. In all other cases, the negative procedure applies. That is in line with the existing approach to excise regulation-making powers.

A large number of changes need to be made to excise secondary legislation to maintain a functioning excise regime after exit. The Government plan to use existing powers as well as the new powers in the Bill. Clause 48(7) will streamline procedures to allow existing excise powers and the new powers to be combined in some cases. The streamlining applies only if regulations made under the existing powers would be subject to the negative resolution procedure—not where the affirmative procedure is to be used. Such streamlining gives Government the ability to maintain a functioning excise system after EU withdrawal. It reduces the number of statutory instruments to be laid on the same subject matter, making more efficient use of parliamentary time and limiting fragmented legislation, which is harder for business and its advisers to follow.

In some cases, that will have the effect that some provisions that are currently subject to the negative resolution in the Lords and Commons will be subject to the negative procedure in the Commons only. However, Commons-only scrutiny is in line with the convention that tax legislation is not subject to Lords scrutiny. The majority of excise regulation-making powers created in recent times are similarly subject to Commons scrutiny only. For example: the alcohol wholesaler registration scheme, introduced in 2015; the raw tobacco approval scheme, introduced in 2016; and the remote gaming duty, introduced in 2014. Members can be assured that, if the Government combine powers, they will not do so to make a trivial provision only to remove Lords’ scrutiny and bring this special procedure into play.

Amendments 135 and 136 seek to require that regulations made under clause 47 are subject to the draft affirmative procedure. Clause 47 gives the Government the power to exclude or modify EU rights, powers, liabilities and obligations relating to excise duty that continue to have effect in UK law after exit by operation of clause 4 of the European Union (Withdrawal) Bill. Some of those rights and obligations will no longer be appropriate after exit. Some may need amendments to deal with the outcome of negotiations with the EU. Therefore, this power has a part to play in ensuring that we have a fully functioning excise regime.

The power in clause 47 is targeted and proportionate. It is specific to the areas saved by clause 4 of the European Union (Withdrawal) Bill, and in addition, it may only be exercised in relation to excise duties on alcohol, tobacco and fuel. It is appropriate and proportionate that the power should be subject to the negative procedure and not the affirmative procedure. That reflects the specific nature of the power in the clause and the speed with which regulations may be required.

The Bill ensures that the scrutiny procedures that are applied to the exercise of each power are appropriate and proportionate. They take into account the technicality of the regulations and the frequency with which they are likely to be made.

Clause 48 ensures that the scrutiny procedures that apply to the exercise of the powers in part 4 are appropriate and proportionate. As far as is practical, the procedure that applies to excise regulations made under these powers is in line with the approach to procedures on existing excise powers.

[Jonathan Reynolds]

There is clearly a fundamental difference of opinion about these clauses. We absolutely support the right and ability of the Government to possess the requisite powers on exit to set the regime that is required. What is in dispute is whether those powers should remain on the statute book for a long time.

It seems entirely reasonable that the Government could come back to legislate for the power that they need in future, rather than giving themselves such a fundamental transfer that changes the balance of power between Parliament and the Government, but we may have to return to that question. Further groups of amendments are on the selection list that cover sunset clauses, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.

Clause 47

EU law relating to excise duty

[Anneliese Dodds]

I beg to move amendment 134, in clause 47, page 33, line 7, at end insert—

“(5) No regulations may be made under this section after the end of the period of two years beginning with exit day.

(6) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”

This amendment limits the duration of the delegated power under Clause 47 to the period ending two years after the United Kingdom leaves the European Union.

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[Kirsty Blackman]

I will speak to amendments 120 and 97 and skim over consequential amendments 98 and 99. I will also mention Labour amendments 87 and 88.

Amendment 120 is an old discussion that we had with the Minister earlier in the debate. We ask for the second “appropriate” to be left out and replaced with “necessary”. That would mean that the powers to make the provision in relation to VAT or customs or excise duties would be made as the appropriate Minister considered necessary in consequence of, or otherwise in connection with, the withdrawal of the UK from the EU.

We have had the discussion before about whether it is best to have “appropriate” or “necessary” in these sections, but it would be sensible for Ministers to make a regulation that they thought was necessary rather than appropriate. The former is a stronger word—the Law Society of Scotland believes that it is a stronger word and has a more appropriate legal definition in this regard. It would be good if the Minister would consider making the change we are asking for in amendment 120.

On the first part of clause 51, I have heard concerns about some of the stuff that has not been written into UK law either through this Bill or possibly the European Union (Withdrawal) Bill. The shipwork end-use relief from customs duty is in EU law—it is a relief that people who bring things in for use offshore have from customs duty. It is written into EU law, but I have not been able to find in this Bill where it is written into UK law —perhaps it is in the European Union (Withdrawal) Bill. The offshore industry rely on it heavily and it would make a big difference, specifically on charges.

The shipwork end-use relief is relied on only for imports coming from third countries, but given that imports from the EU would now be potentially subject to customs duty, if the Government do not manage to get a deal to be in a customs union, it will become more applicable and will apply to many more products and goods coming through. It will be necessary to write that into UK law at some point, and I would very much appreciate a commitment from the Minister on that. A lot of companies that transport goods offshore, which particularly affects my constituency, would appreciate knowing the direction of travel in relation to this relief.

Amendment 97—the Scottish National party amendment that would apply a sunset clause to clause 51—serves a dual purpose. It submits that there should be a sunset clause and makes the case that regulations may not be made under the clause after 29 March 2021, but it would also change the procedures for the making of regulations, asking that they are made using the draft affirmative procedure. As we have discussed at some length, the draft affirmative procedure would be better than either the negative procedure or the made affirmative procedure. It would mean that no changes are made before Parliament has the opportunity to scrutinise them because they would be laid in draft rather than created and then consulted on with Members. That is why we are asking for both of those changes.

Although this is my first chance to talk about sunset clauses, we have had a fairly lengthy debate on them and they have been covered by various Members. Labour Front Benchers asked earlier why sunset clauses should be applicable to the European Union (Withdrawal) Bill but not this Bill. Even though they are separate pieces of legislation, I actually believe that, in this Bill, it is reasonable for Ministers to have one process relating to the setting up of a customs or an excise regime, and for that process to be different ever after. That is why a sunset clause would be a good change in that regard.

If future Governments are to make such changes, they should be subject to more parliamentary scrutiny. I have said to the Minister previously but remind him that the Conservative party will not be in government forever—I hope not—and in that case they will be sitting in opposition, unable appropriately or extensively to scrutinise the measures. That is a major concern given that the delegated powers in the Bill allow for the Government to make radical changes without the need for much in the way of parliamentary scrutiny.

I am sure the Government do not intend to give a future Labour Government a free rein drastically to alter the customs regime, but unfortunately the way the Bill is written would give them that right. I get the impression that I would be more likely to favour the Labour party’s customs regime than the Conservative party’s, but none the less no Executive should have the power to do all those things by using such things as the negative procedure. The made affirmative procedure is not even strong enough in some cases.

Labour amendments 87 and 88 are grouped with other amendments on sunset clauses. If they put the amendments to the vote, I will support them, because I believe a sunset clause is appropriate for the provisions made in clause 51.

[Jonathan Reynolds]

I wish to speak for what I will believe will be the final time in Committee. [Hon. Members: “Oh.”] There is always Report stage; we know the procedure here. I will speak to amendments 87 and 88, which relate to clauses 51 and 52. The explanatory statement for amendment 87 reads:

“This amendment limits the duration of the delegated power under Clause 51 to the period ending two years after the United Kingdom leaves the European Union.”

Amendment 88 would apply the same limits to the powers entitled under clause 52.

These are obviously a fairly similar set of arguments to those we have just heard relating to clause 45, but I think we have clearly established that there are strong reservations about the use of delegated powers under the Bill and its democratic implications. The famous House of Lords Delegated Powers and Regulatory Reform Committee said specifically in its report that clause 51, which relates to VAT or duties of customs or excise, is such that a sunset clause would be possible and welcome. As the Lords report said, clause 51 contains a very wide power that, in the words of the Treasury itself

“is necessary to ensure that the Treasury and Secretary of State have the ability to deal with the consequences of withdrawal from the EU and to maintain fully functioning and legally operable customs, VAT and excise regimes in a range of scenarios”.

It is about withdrawal from the EU, yet the powers would give considerable scope to the Executive to shape the regime for many years, perhaps decades, into the future. That is surely why a recommendation for a sunset clause relating to clause 51 is appropriate.

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[Nic Dakin (Scunthorpe) (Lab)]

Is it not important that the Government take account of the evidence we have had from the Hansard Society supporting protections from whoever happens to be in Government in the future?

[Jonathan Reynolds]

I firmly agree. Members on both sides of the Committee have referred to the testimony the Hansard Society gave in the evidence sessions. It is not just the Opposition who have concerns. I would very much like to be a real, not shadow, Treasury Minister one day. Even then, we would require the proper checks and balances to be in place. It still seems counter-intuitive to include time limits in the overall European Union (Withdrawal) Bill but not in today’s Bill, when the principles we have established apply similarly to both. As with our other arguments on sunset clauses, we do not see how the Government can justify the use of the powers in the clause in perpetuity. We have established that that should not happen, and the Government have not yet been able to refute that case.

I emphasise again that we all have a duty to check the powers of the Executive and to ensure that we do not allow them to change the balance of power permanently in their favour. The time period of two years should be generous enough to fill any gap in provisions that may come about from the end of delegated powers through other channels. Sunset clauses provide a vital check on delegated powers, and I urge members on both sides of the Committee to support the amendment to help to mitigate the constitutional risks introduced by the Bill.

[Peter Dowd]

It is important that we deal with the question raised by the amendment regarding sunset clauses. The Government originally did not want any of the sunset clauses in the European Union (Withdrawal) Bill, but they were required or forced—people can call it what they will—by hon. Members from across the parties to put in sunset clauses. We were told at the time that the inclusion of a sunset clause in that Bill would result in the end of civilisation as we know it. Of course, someone threw a bucket of water over the Government, and they freshened up and realised that they were not going to get away with not having sunset clauses.

The Government have persisted in Committee—they might be doing the same with the Trade Bill—to argue against sunset clauses. They would have us believe that sunset clauses are some foreign or alien concept in parliamentary democracies. Well, they are not. There were even sunset clauses in the nuclear deal with Iran. Sunset clauses exist in all sorts of legislation, including treaties—and we have some 3,000 treaties. They exist right across the piece in legislation. Indeed, the coalition Government, when introducing the Enterprise and Regulatory Reform Act 2013, basically insisted on sunset clauses to reduce the legislative burden. When it suits the Government to have a sunset clause, they will have a sunset clause; in fact, they introduced an Act to have sunset clauses. They are now telling us that sunset clauses are outrageous, and will somehow mess up the whole VAT regime.

Other countries have sunset clauses. For example, sunset clauses in Texas mean that, after 10 or 12 years, some agencies will cease to exist unless they can prove their appropriateness, consistency and status. They have to go through that process. Even organisations have sunset clauses applied to them and they have to show how relevant they are.

The Prevention of Terrorism Act 2005 had a sunset clause. In the past, sunset clauses have been applied to the effectiveness of legislation, and yet we are now being told today that they are somehow outrageous and that the whole Government will grind to a halt if we have them.

Some Canadian legislation—in fact, a whole range of Canadian legislation—has an automatic five-year sunset clause. The Canadians manage perfectly well with sunset clauses. The question is: are this Government so fearful of a sunset clause, so fearful of challenge and so fearful of scrutiny, particularly in relation to this amendment, that they do not want sunset clauses?

There are even sunset clauses in Australia, and they seem to manage. Australia has general sunset clauses; they are not even specific. They have sunset clauses for whole swathes of legislation and they manage perfectly well. South Korea also has sunset clauses. Perhaps that is why it has such a booming economy—because the sunset clauses mean that, time after time, they test and challenge. The only sunset clause in North Korea, no doubt, is the sunset on democracy. We do not want that; we want sunset clauses for the powers this Government have taken for themselves.

[Jonathan Reynolds]

My hon. Friend is making a fantastic speech about the applicability of sunset clauses around the world. Again, however, we have to get back to this point: if the Government still need these powers after the sunset clause is done and the powers no longer exist, they simply have to come back to Parliament. It is not the case that they do not have the power to deal with things; a strong, united Government, with a parliamentary majority, would quite easily be able to come back and put on the statute book anything they needed. That argument simply has not been addressed by the Government.

[The Chair]

Order. Before I call Mr Peter Dowd, I will say that we are all immensely interested in South Korea, Texas, Australia and all the other places he has listed, but could he get back to this particular amendment?