Taxation (Cross-border Trade) Bill

Lord Tunnicliffe 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

Moved by

[Lord Tunnicliffe]

As an amendment to the motion that the bill be now read a second time, at end to insert “but expresses grave concern that the Government agreed to accept, without detailed Parliamentary scrutiny, substantial measures that contradict both the United Kingdom’s stated negotiating position and commitments already entered into with the European Union; and that the bill introduces additional barriers to securing a United Kingdom–European Union customs union.”

[Lord Tunnicliffe (Lab)]

My Lords, I turn first to the Bill, which will be needed in any sensible Brexit scenario. As a supply Bill, it is not the role of this House to hinder its passage. Nevertheless, it is appropriate to set out the criticisms that we have of this legislation and the context in which we are having this Second Reading debate today.

Once again, as the Government have done in all previous Brexit Bills, powers from Europe are being repatriated, not to Parliament, but to the Executive. Labour opposes those clauses that give the Treasury huge amounts of delegated power to set regulations and future customs duty tariff rates through the back door. Parliament, not the Executive, should have the final say.

Labour supports the creation of a truly independent Trade Remedies Authority to help protect UK industry and advise the Government on how best to tackle the dumping of state-subsidised goods on the UK market. However, the Bill also provides the Secretary of State with a veto to prevent adoption, against the advice of the TRA, if he determines that it is not in either the economic interest or the public interest, both of which remain undefined. Overall, Labour is concerned about the lack of detail in the Bill to protect UK manufacturing and business. The proposals are pitiful, to say the least. They are weaker than those currently in the EU and those in most developed trading nations, and they will put manufacturing jobs at risk.

However, it is to be welcomed that the Government have made a number of concessions to Labour amendments. Of particular note are concessions that strengthen the role of the TRA, introduce sunset clauses for delegated powers and give Parliament a vote on the raising or lowering of import duty and excise duty and on the raising of VAT.

The Government must resource and staff HMRC to guarantee the successful implementation of the new customs and tariff regime. Its staffing levels have been cut by 17% since 2010 and are set to be cut further this year.

I turn now to the White Paper, The Future Relationship between the United Kingdom and the European Union, Command Paper 9593, which is now more popularly known as “Chequers”. Although it represents a move away from the type of proposal advocated by many Tory Brexiteers, the proposals stop well short of the comprehensive customs union that Labour has called for. We believe that, instead of floating a complex and bureaucratic customs fudge, the Government should focus on negotiating a comprehensive customs union for all goods and on securing a proper position for services.

I now turn to my amendment, which in summary is addressed to the amendments tabled by the European Research Group, but let us once again look briefly at the White Paper. Labour cannot endorse it but one has to admit that it is better than nothing. It could conceivably move the process along and it is the first document to acknowledge that compromise is necessary. However, it was two years in the making and it was blown out of the water within a few days of publication. I am referring not to the resignation of two Cabinet members—individuals whose promotion few of us could understand in the first place and whose absence from the Cabinet can only but improve its overall capability—but to the fact that it was torpedoed in this Bill by amendments tabled by members of the ERG.

Let us look first at the two amendments that relate to a customs union. Labour believes that we should seek to negotiate a new, comprehensive UK-EU customs union. For that reason, we were pleased to see Clause 31 in the Bill. Before amendment by the ERG, it provided a potential vehicle to negotiate a customs union. Now, encumbered by Clause 31(5), it will be difficult to use in the frighteningly few weeks left. Add to that the deletion of paragraph 14 of Schedule 8—a power that is essential for a customs union—and the amendments all but cut off this essential area of compromise.

However, the biggest torpedo of them all is new Clause 54. Turning back to the White Paper, its biggest idea is set out in paragraphs 13 to 21 of point 1.2.1 under Chapter 1, starting on page 16. Of particular note is paragraph 17a. In effect, it says to the EU: “We want to be part of your free trade area but set our own overseas tariffs. If our tariffs are less than yours, we will collect your tariffs for goods destined for the EU. We will not, however, expect you to collect our tariffs at your border if they are greater than yours. A simple compromise: we will protect your external tariff regime; we are not asking you to set up a complex system to protect ours”. This compromise, as I said earlier, has been blown out of the water by new Clause 54—an amendment proposed by Priti Patel, Jacob Rees-Mogg et cetera.

The new clause specifies reciprocity. The Government would be allowed to collect EU tariffs at our borders only if the EU were required to collect UK tariffs at its borders. There was only a limited possibility that the EU would accept the White Paper compromise but, burdened with reciprocity, as it now is, I put it to the House that the probability is now negligible.

How did these damaging amendments get into the Bill? Were they introduced in Committee in the other place and carefully debated and scrutinised? No, they were introduced at the last possible moment on Report. Why did they get through? They got through because the Prime Minister gave in to the ERG. A Back-Bench group of Tory Brexiteers now effectively has control of the Brexit negotiations.

That brings me to the sorry performance of Theresa May. I, like many, breathed a sigh of relief when she became Prime Minister—a sigh of relief because the alternatives were Boris Johnson, David Davis or Michael Gove—but her performance has been lamentable. We should not be surprised. She was, after all, the Home Secretary whose actions brought us the present crime wave, the hostile environment and the Windrush scandal. She clearly has no understanding of negotiation. Negotiation is a process whereby two sides explore each other’s positions and motivations to seek common ground as a basis for agreement. It is not, in general, aided by going behind the back of the other side’s nominated representative. Negotiation is a remarkably personal affair where respect and empathy are crucial. Her colleague, Dr Fox, has opined that a no-deal exit is a 60:40 probability. A no-deal exit would be a disaster for all our citizens. If it happens, she will have been responsible for the worst political event of the last 45 years.

I do not intend to divide the House on my amendment. Success would have no effect and would be represented in the Brexit press as this House exceeding its authority. However, I hope the debate will cause the Government to pause and think again; to listen to the proposals from across the House, and particularly from the Labour Party; to wrest control from the ERG, and to deliver a Brexit deal for all our citizens. I beg to move.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, we put down our amendment to create a framework for the debate. We wanted to assure ourselves that it would not be a simple, formal, dry debate on the supply Motion. We have been successful in that, in the sense that this afternoon’s debate has been excellent and thoughtful and has created many, many questions. I am afraid that in my judgment, and I suspect in that of many others in the House, the Government have failed to produce credible answers that are internally consistent and capable of execution. In particular, they have failed to answer the question: have the ERG amendments to the Bill effectively destroyed the Chequers solution?

The Labour Front Bench will not be able to support the amendment from the noble Baroness, Lady Kramer, because it is not presently the policy of the Labour Party to support a second referendum. With that, and in accordance with my introduction, I beg leave to withdraw the amendment.

Lord Tuncliffe’s amendment to the Motion withdrawn.