Taxation (Cross-border Trade) Bill

Lord Browne of Ladyton 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 Browne of Ladyton (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Fox. I hope that his speech has engaged the Minister’s business experience and encourages him to take back to his colleagues in government the significantly persuasive detail of the argument he presented. I also hope that the Minister will refer particularly to that in his response to the debate.

I do not suppose that this will be much of a surprise to anybody but I support the UK’s continued membership of a customs union with the European Union. However, like my noble friend Lord Tunnicliffe, I recognise the necessity of this legislation for an alternative customs regime should we find ourselves out of the European Union without a deal—which, frankly, looks increasingly likely—or with a deal that requires us to leave the customs union.

This is a complex piece of legislation. It consists of 58 clauses and nine schedules and includes provisions covering some of the most complex areas of legislation: import duty, export duty, VAT and excise duty. It is astonishing that it comes before your Lordships’ House in the state it is presently in. I agree with the noble Baroness, Lady Kramer, and the noble Lord, Lord Kerr, about the designation and the motivation for the designation of the Bill as a supply Bill. It is difficult to avoid the conclusion that the sort of scrutiny that this Bill demands is being avoided. Candidly, in the time that I have been in your Lordships’ House I have never before contributed to a debate on a Bill that was designated as a supply Bill. When I was preparing for this debate I wondered what the point of it was, but having listened to the speeches thus far, I can now see that this is a significant opportunity for people to make good arguments, even if they do not affect the legislation before the House.

These restrictions were not before the House of Commons. The other place had the opportunity to scrutinise the Bill fully but it can hardly be said—and I read the report of all the debate there—that it has done so. I draw attention in particular to the proceedings in the other place on Monday 16 July, when both Report and Third Reading were conducted over four seriously timetabled hours, with reducing times offered to speakers as the debate progressed. A minuscule number of Members of the other place managed to contribute to the debate. The consequence was that, as the Official Report shows—these statistics do not particularly prove anything but are indicative of the position—Report and Third Reading are contained within 127 columns of the report, covering the less than four timetabled hours of debate. Sixty-five of the columns are necessary just to record the amendments that were considered and the votes thereon, and only 59 columns record the debate. It is not possible for the Government to come to this House and say that the Bill has been scrutinised or—as the noble Viscount, Lord Trenchard, told us—that it has been considered in the other place and voted on. It has not been considered at all. I spent more time reading the amendments and looking over the votes in the Official Report than I spent reading the debate. It is a disgrace. What is the position of the Government and the Brexiteers on how this squares with taking back control to our Parliament?

While I am on the subject, perhaps the Minister, in his summation, will explain to your Lordships how telling the people who run businesses in Northern Ireland that, in the event of a no-deal exit from the European Union, if they want to know how to conduct cross-border business, they should ask a foreign government how to do it, is consistent with taking back control of our own destiny. That appears to be the compelling argument for us leaving the European Union in the first place. Who thought that that was the right response to give to the people of Northern Ireland?

Among the amendments considered on Report, which my noble friend Lord Hain went through in some detail, were four put forward by the ERG—the European Research Group—which were designed to kill off the possibility of the Prime Minister agreeing a Brexit deal on the basis of the Chequers agreement. It appears that they have worked. I understand that they have been aided by the position that the remainers in the Conservative Party have also taken on the Chequers agreement, and that it is now dead in the water, but they certainly would have worked on their own. Recent evidence suggests that the Prime Minister is now hemmed in by both sides of her party. In the current environment, the space for a deal that all sides of the Conservative Party and the EU 27 can agree is virtually non-existent.

It is incomprehensible why the Government accepted these amendments. All of them were designed to undermine their preferred Brexit policy. It is also instructive that the Minister, in his opening remarks, completely ignored all these amendments. He referred to amendments in a generic sense but made no particular reference. We talk about ignoring the elephant in the room, but there is a massive elephant in this Bill. It significantly changes both the Bill and the Government’s policy, yet in the Minister’s introduction of the Bill to your Lordships’ House, it was as though it did not exist. As the Minister knows, I admire him greatly. I suspect that the reason why he did that was that he could not bring himself to put forward the argument that was asserted by Mel Stride, the Financial Secretary to the Treasury, in some very short sentences in summing up the debate on Report, when he said that these amendments not only are not as damaging as they may seem but are consistent with the Government’s position. There is no persuasive argument for that.

An analysis of the amendments, which my noble friend Lord Hain has done, shows that they damage the Government’s position significantly and undermine it completely. I challenge the Minister, if he is able, to give us not bland assertions over a couple of sentences, as his colleague in the other place did, but a serious analysis of these amendments and their effect on the Government’s position. If he wants to explain to us that they do not change the Government’s position, can he please share them with us in summarising the debate? I had intended to go through each amendment to explain why they have that effect, but my noble friend did that for me. I could not do it any better so I will rest with the arguments he put forward.

Over the next couple of minutes—recognising the constraints that are upon me in this speech and upon this House, and recognising that I see little point in referring to any specific provisions of the Bill, but out of respect for those beyond this House who have taken the time and trouble to consider the provisions of the Bill and to provide us with briefings for today’s proceedings—I would like to make reference to one or two points, and to two particular briefings. I invite the Minister, at least in the fullness of time, and perhaps in written form, to respond to the points made by both the Law Society of Scotland and the Fairtrade Foundation, whose briefings I received and both of which impressed me.

The Law Society of Scotland makes a compelling case about the scope of the delegated powers contained in the Bill—echoing concerns over the use of Henry VIII powers, as discussed significantly in the context of the then European Union (Withdrawal) Bill—and about the importance of ensuring that the Government are obliged to consult stakeholders in the process of setting regulations to establish a customs regime. As is its wont, the society proposes in its briefing paper a number of very specific and well-argued amendments to the Bill. I ask the Minister to consider these amendments and, perhaps, to respond to the House in some fashion about the Government’s position in relation to them.

The Fairtrade Foundation provided an interesting briefing which covers both the trade and customs Bills. It points out that this Bill, as drafted, makes no reference to sustainable development and would allow tariff changes to take place without regard to their impact on developing countries. It hopes that the Bill will be amended to include sustainable development criteria to which the Secretary of State must have regard in Clauses 8(5) and 39(4). I am completely confident that it would not be the Minister’s intention for tariff changes to take place without regard to their impact on developing countries. I trust that in due course the Minister will take this into consideration and respond to the point being made in this briefing. Perhaps a suitable amendment to the Trade Bill could address this deficiency if it is not possible to do so in this Bill. I assume that the Government have copies of these briefings; if not, they can be provided.

Finally, I want to make a specific point about customs and excise. I am in possession of a briefing from the Scotch Whisky Association. This is a significant industry not just for Scotland but for the United Kingdom, with £4.3 billion or more of exports. It is a very active co-operator and partner with the Government in the customs and excise environment. Tomorrow, I will attend a meeting of the All-Party Parliamentary Group on Scotch Whisky and I know that representatives of the industry will ask me—because they do so every time I meet them—what the timetable is for the implementation of these new customs arrangements.

This is an organisation which has contributed to the development and introduction of the present European customs arrangements that allow spirits to be traded across the European Union, the excise duty being paid only when the goods arrive at their destination. It is called the EMCS. The industry helped the Government to build this system, so it knows the problems, for the industry and for the Government, associated with building new customs systems. Frankly—I summarise bluntly what they say—its members tell me that it is now too late for us to get new customs or excise duty arrangements not only for the EU but for their industry in time for any of the expected dates on which we will leave the European Union. It will take years.

Therefore, perhaps the Minister can give some indication of how long—once this Bill is passed and becomes law, as inevitably it will—this industry should expect to wait before customs arrangements are worked through and bedded down so that it can continue to make the sort of contribution that it does to the economy of this country.