Taxation (Cross-border Trade) Bill

Lord Adonis Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 4th September 2018 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I agree entirely with what my noble friend Lord Whitty said about the need for proper parliamentary oversight. I also support the amendments in the names of my noble friend Lord Tunnicliffe and the noble Baroness, Lady Kramer, which I will vote for if they press them.

Almost everyone except the Minister accepts that the Chequers policy on tariffs and customs is now defunct. The Minister knows it to be true; he just cannot say so. The Bill is essentially a trade destruction Bill in that it helps to dismantle our current membership of the European customs union and single market without any policy, let alone a credible strategy, to put in its place. I would say that this is the height of Executive irresponsibility, but coming from a Government who have turned irresponsibility into an art form and created in Brexit a giant political Ponzi pyramid scheme waiting to collapse, it is sadly par for the course.

However, I want to concentrate my remarks on one issue. The position of Northern Ireland was precarious before the Bill and impossible after it because of the Rees-Mogg new clause—Clause 55—which the Government accepted in the Commons at the last minute to stave off certain defeat. It reads as follows:

“It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain”.


We all know the clause’s genesis: in the European negotiations leading to the EU and UK’s joint report last December, Mrs May accepted the necessity of a backstop in respect of Northern Ireland whereby if new hard border or customs controls of any kind were necessitated by treaty provisions—or their absence—affecting Great Britain after Brexit, Northern Ireland would remain subject to European law and customs and trade provisions to ensure “full regulatory alignment”. Mrs May struggled hard to avoid a commitment to such alignment and the backstop but she had no choice, for two reasons: the Government’s pledge and treaty obligations to observe the Good Friday agreement, and the reality that the Republic of Ireland would simply have vetoed any EU negotiating provision that did not guarantee that there would be no border infrastructure or mobile border controls between the Republic of Ireland and Northern Ireland.

As I said, Mrs May struggled hard against those provisions, so much so that when she was in Belfast last month—in a visit orchestrated and supervised by Arlene Foster, the DUP leader who has Mrs May at her beck and call—the Prime Minister disowned the backstop, saying that it should not be a legal mechanism in European law and should be time limited. In other words, it should be a backstop that is not a backstop, like an insurance policy that does not provide any insurance. That analogy is a bit close to the bone because British insurance policies will lose a lot of their insurance cover if we leave the European Union next March without a deal.

In saying this, Mrs May is parroting the critique of the Northern Ireland backstop which, disgracefully, is now par for the course among Brexiters. When I challenged Mr Nigel Farage about this in a debate last week, he said that the concerns about Northern Ireland were,

“entirely got up by Barnier”,

and that, anyway, Ireland was a “tiddly” country. This echoes Mr Boris Johnson who attacks Mrs May every day for letting Ireland become the “tail wagging the dog” of Brexit. Not to be outdone, Mr Rees-Mogg has suggested that the answer to the Irish problem is for the Republic of Ireland to follow us in leaving the European Union. If it does not, we might need searches at or near the border,

“like there were in the Troubles”.

In other words, this is a choice between neo-colonialism and a return to the politics of the 1980s which, I am afraid, sums up Mr Rees-Mogg’s approach to Brexit as a whole. Whatever else Mrs Thatcher did in the 1980s, she did not seek to leave the European Union.

These attempts to undermine the Good Friday agreement and the Irish backstop are utterly reprehensible —indeed, chilling to anyone with any experience of Ireland. The speech by my noble friend Lord Hain was very much to the point. Despite this, the Irish backstop is still the formal negotiating position of both the United Kingdom and the European Union. Thanks to your Lordships, the European Union (Withdrawal) Act enshrines in statute that any withdrawal agreement must conform to the Good Friday agreement.

To return to last December’s EU/UK joint report, your Lordships will recall that it was nearly derailed at the last minute because Arlene Foster and Mr Rees-Mogg worked out that, if there had to be “full regulatory alignment” within Ireland, but Great Britain was leaving the customs union and the single market, then there would have to be a tariff and customs barrier down the Irish Sea. To forestall this—in yet another layer of the Brexit Ponzi pyramid—Mrs May gave a commitment that there would be no hard border down the Irish Sea, nor within Ireland. As your Lordships appreciate only too clearly, after our 150 hours of debate on the then European Union (Withdrawal) Bill, this means that any Brexit which involves Great Britain leaving the customs union and the single market is not possible unless something fundamental gives.

This brings us to Chequers. As the House knows, the Cabinet imploded after Chequers, with the resignations of the Foreign Secretary, the DExEU Secretary and a string of junior Ministers. The Prime Minister was forced to appoint Mr Raab as her Brexit negotiator and thereby disown her own Chequers policy of “a facilitated customs arrangement”. This language was an attempt to disguise a customs union. It was, unsurprisingly, rumbled by Arlene Foster and Mr Rees-Mogg within minutes, which is why the Prime Minister was forced to concede new Clause 55, prohibiting any customs regime for Great Britain which is different from that in Northern Ireland. So we now face a policy which is completely impossible unless Brexit involves no change of any substance in the customs union or the single market in their application to the entire United Kingdom.

There is no point in my pressing the Minister on these fundamental issues of government Brexit strategy because he will simply read out his brief, but can I ask him two specific questions? First, do the Government continue to support a backstop which has legal force and is not time limited? Secondly, does the Minister accept that no deal, in the form in which the Government presented it as an option last week, is incompatible with the Good Friday agreement? It is possible for the Minister to give a one-word answer to both questions. I look forward to hearing whether the Minister—whom I greatly respect—gives me a straight “yes” to both or whether he is forced to dissemble. If he dissembles, people in Ireland will be even more alarmed than they are today.