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

Debate between Jonathan Reynolds and Nicholas Dakin

Thursday 1st February 2018 Public Bill Committees

[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.

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

Debate between Jonathan Reynolds and Nicholas Dakin

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Nic Dakin]

My hon. Friend is setting out the case for the measures he is arguing for very strongly. He may or may not agree, but it seems to me that it is important that, when considering what to do, the actions he is talking about need to be taken.

[Jonathan Reynolds]

I agree. Every member of the Committee will recognise my hon. Friend’s constituency interest and expertise in this area. I felt that the evidence that UK Steel gave us earlier in the week was particularly helpful in being prescriptive as to where it believes the Bill falls short. As an industry, it is especially susceptible to gaps in trade remedy legislation given the historic damage that dumping has done to the sector.

--- Later in debate ---

[Nic Dakin]

The opportunity of leaving the European Union ought to be to speed up these processes, and to give greater confidence to the industry rather than less confidence.

[Jonathan Reynolds]

That is absolutely the case. Gareth Stace from UK Steel told us last Tuesday:

“The Government can promise anything they like, but more than a third of all tariffs in place affect the steel sector and it hits us hard, therefore, if this system, when it comes out, is not appropriate for what it is trying to do.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 68-69, Q105.]

That will clearly result in huge problems for the sector.

UK Steel’s main reservation with the Bill is the lack of detail, as my hon. Friend has said, which is present on a number of fronts where it believes the industry needs more certainty. Secondary legislation is being relied upon to provide a huge amount of the practical information we need. One of UK Steel’s specific concerns is around investigations relating to the dumping of foreign subsidies that can cause injury to UK industry. As related by Dr Cohen in her testimony, to which I referred earlier, there is no information on how dumping margins are to be calculated.

UK Steel goes further and sets out a list of other considerations that should be taken into account, including how to assess whether a UK industry has been injured; how to determine if such injury has been caused by the dumped or subsidised imports; what principles may be used in defining the products covered by an investigation; how subsidies can be defined; what evidence an industry needs to produce to trigger an investigation; how to conduct an investigation, including any time limits; and how to require guarantees to cover possible future duties when provisional measures are required. It is a long list and I could go on, but in the interests of the Committee’s time I will not. However, it serves to illustrate the point that there are a number of multi-layered and complex considerations to take into account.

I also want to underline that this is not a matter of protectionism. As Gareth Stace also made clear in Tuesday’s evidence session:

“The steel sector thrives on free, liberalised trade. A third of all steel produced in the world is traded across borders.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 67, Q104.]

At present there are zero tariffs between developed nations for steel trade. It was his belief that, without trade remedies, there will be an increase in protectionism, as they are essential to allowing free trade to take place. I thoroughly endorse that message.

The upshot of such deputations is that manufacturers are not asking for special measures from the outset, but pointing out that we are on the cusp of a complex world post-Brexit and they need more detail. It has been the Government’s choice not to include such detail in the Bill and it is too late to make that change now. It is clear, however, that the lack of certainty that results has not been optimal for our manufacturing sector and has inhibited its ability to make plans and prepare for the future.

As UK Steel has highlighted, the legislation lays out the bare minimum needed, delegating all detail to secondary legislation. It is true that we are on a tight timeline for negotiations, but there is a wealth of global legislation that could have been drawn upon to help inform the Bill, such as the US Tariff Act of 1930, the Canadian Special Import Measures Act, the EU Regulations 2016/1036—