Customs and Borders

Kirsty Blackman Excerpts

Thursday 26th April 2018 Commons Chamber

[Yvette Cooper]

Look, there will be some for whom this debate is partly about what happened in the referendum. Others will want to have nothing to do with anything that is linked to the European Union in any way. I am looking to see where the consensus can be in this House, and I think there is a possibility of a consensus around a customs union. We can have a separate debate another time on the wider regulatory alignment—on which the hon. Gentleman and I have particular views—and on what other aspects of regulatory alignment, or of a single market, we may each care about. For now, the focus should be on a customs union, which does not prejudge the conclusions of some of the wider questions.

I want to say something about the common external tariff, because I think this bit gets lost too often. If we are in a customs union, we have the common external tariff, the consequence of which is that not only all those products, but all the components and agreements of the products can spin back and forth across different borders within the EU and not have to face rules of origin checks. Many businesses are particularly concerned about the rules of origin checks, because that means that they have to account for where the different ingredients come from. If they suddenly change the mix of ingredients in a product or if they suddenly change the source of their supply, they might also suddenly have to change their evaluation of the rules of origin and fill in different forms. That is a huge ongoing burden for businesses, employers and particularly for manufacturers. It is not just a one-off cost or an easy thing about ticking an online box.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am really pleased that the right hon. Lady secured this debate. The point she is making about the importance of the shared external tariff is absolutely vital, because of the rules of origin. Does she share my concern that some Members in this House seem to be wilfully misunderstanding what a customs union really means and cannot cope with the idea that this will result in a huge amount of extra paperwork?

[Yvette Cooper]

That is right. If a manufacturer’s components come in from China but then, as part of the manufacturing process, the product moves to France for further manufacturing, and the components come back again and are then sent somewhere else, at every stage those calculations would have to be done. At the moment, because we all have the common external tariff, when the components come in from China or elsewhere in the world, those rules of origin checks do not need to be done after the manufacturing process and before it is sold on. It does not matter where the widgets come from or where the gadgets go; we have the common external tariff, which makes that process much, much smoother than it would otherwise be.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

Mr Speaker, I would like to take this opportunity to be the first person in this place to congratulate Ruth Davidson, who has just announced her pregnancy. I send huge congratulations from those of us on the Scottish National party Benches.

I feel very sorry for the Financial Secretary to the Treasury, because when we went through the initial stages of consideration of the customs Bill—the Taxation (Cross-border Trade) Bill—his Government had not announced that they were against being in a customs union. In fact, a couple of days after we finished the Bill’s consideration in Committee, the Government randomly—on a Saturday morning—announced that they were not going to pursue a customs union. The Committee stage would have been an awful lot easier had we been aware of the Government’s position.

It was almost as if the Government took that position without really thinking it through. They said, “Of course we are not going to be in a customs union.” Then everyone said, “What about Ireland?”, and the Government said, “Oh, right. We’d better do something about that.” Then we said, “What about rules of origin checks?”, and the Government said, “Oh, yes.” It was almost as if they were being held to account by some Brexiteer Back Benchers and, without thinking, announced this crazy policy that they now cannot row back from.

A customs union means a shared external tariff. It generally means that countries lower the tariff barriers between them. It is not anything else. It is not anything that anyone else says it is. Half our trade in goods is with the EU, and the other half is with the rest of the world.

I want to debunk some of the myths that have been put out in recent days. Every single lorry is stopped at the Norway-Sweden border—not every one is checked, but every one is stopped. We will lose free trade agreements. The Government say, “All these countries have decided that we will continue to be party to the free trade agreements,” but I am not sure that that is the case. We do not have it in writing from anyone. The Government have talked about how great it is that our trade with South Korea has increased, but that is since the EU signed a free trade agreement with South Korea—that is the only reason why it has happened. Then there is the question of scrutiny. I am sure that some of the Brexiteers do not understand what they have signed up to. The Trade Bill does not give us any more scrutiny; in fact, it gives us less scrutiny. The Commission needs authority from the European Council, and then it needs consent from the European Parliament, but we will not have those mechanisms. The Government will be able to do what they like because there is no mechanism for parliamentary scrutiny under the Bill.

The Brexiteers talk about trade with Africa. I look forward to their tabling amendments to the customs Bill to increase the number of “least developed countries” from 49, to increase the number of “generalised scheme of preferences” countries from 19, and to increase the number of GSP+ countries from nine. They do not know what will actually happen, and they need to table amendments if they want to fulfil their bright idea of the future.

--- Later in debate ---

[Mel Stride]

The position of the Prime Minister and the Government is that we are confident of a deal. In that context, this issue of no deal is not particularly pertinent.

Other important points have been raised. I think everybody recognises the importance of having as frictionless a border as possible. Of course, it is recognised that we would achieve that if we stayed within the customs union or a customs union, which is de facto the same thing, but that is not the same as suggesting that there are not alternative arrangements—I will discuss those alternative arrangements in a moment—that would achieve as good as the same thing as a frictionless border.

Many Members today have raised the importance of being free as a nation to go out and negotiate our own free trade arrangements, which of course means that we need to leave the customs union.

[Kirsty Blackman]

Does the Financial Secretary believe the trade agreements we negotiate could possibly be better than the trade agreements we currently have and would continue to have as a member of the EU?

[Mel Stride]

As the hon. Lady knows, we are currently working on transferring the EU’s agreements with third-world countries. Of course, in future we will be free to strike our own FTAs with other countries, which we are currently prohibited from doing.

It is good to hear the hon. Member for Bootle (Peter Dowd) agree with Margaret Thatcher at long last. She stood for free markets, free trade and fiscal responsibility, and I look forward to hearing more of that from him in the years to come.

I have just been informed that I must leave two minutes for the right hon. Member for Normanton, Pontefract and Castleford, which I will endeavour to do—[Interruption]— although she is generously saying that one minute will be enough.

The hon. Member for Bootle suggested that the Government’s position is confused, although I am not sure whether he was thinking of his own position when he said that. The reality is that the Labour party has a classic fudge on the customs union. It wants to tell everybody that we can somehow be in the customs union while not being a rule taker—that we can somehow negotiate to be in the room when FTAs between the EU and other countries are negotiated. The Labour party accuses us of seeking to cherry-pick, but by its own logic, it is quite clear that this is just not a realistic possibility.

The hon. Gentleman specifically mentioned clause 31 of the Taxation (Cross-border Trade) Bill, which will indeed permit the UK to enter into a customs union with another customs union or territory. That is something we will almost certainly wish to do with our Crown dependencies. The clause will therefore not be relevant to the European Union after our departure. The Government are therefore clear that when we leave the European Union we will leave its customs union. That is a matter of fact. The Government have also been clear that forming a new customs union with the EU is not compatible with a meaningful independent trade policy, so we will not be doing that. Outside the EU and a customs union, the UK will be able to sign its own trade deals with our partners around the world.