Taxation (Cross-border Trade) Bill

Marcus Fysh Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Yvette Cooper]

I completely agree with the right hon. Lady. The former Brexit Secretary seems to be arguing that because companies trade across borders that involve customs checks, we should rip up our customs-free borders. He is saying that because those trades take place, it is okay somehow to add costs to our trading process. Why on earth would we do that? Why on earth would we add burdens to businesses that do not face them at the moment? Why on earth would we make the process difficult and more costly for them? It is not that we think all trade will stop—of course it will not—but the point is that that trade will become more costly and burdensome, and our businesses and manufacturers will be at a disadvantage compared with their European neighbours and competitors. That is unfair on our manufacturers, which we in this House should be standing up for. I certainly believe in standing up for Yorkshire manufacturing.

The former Brexit Secretary also seemed to be arguing that, because we coped with Operation Stack before, let us have more delays again. Yes, we can cope, but Operation Stack cost businesses coping with those long delays a fortune.

[Mr Marcus Fysh (Yeovil) (Con)]

Will the right hon. Lady give some consideration to supporting our new clause 36, which will become a key piece of legislation if the UK is to operate proper trade defences? She mentioned manufacturing, and I note that many Labour Members have constituencies where workers may depend on the UK’s having good trade defences. Under the facilitated customs arrangement, that would not be possible without new clause 36.

[Yvette Cooper]

Let me just deal with new clause 36. If the Government are saying that they will accept it, I do not understand how that does not rip a hole right through their White Paper. New clause 36 explicitly states that we cannot collect customs and excise duties at the border on behalf of another country unless that country is going to do the same for us, but the White Paper states:

“However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK.”

That is the opposite of what is said in new clause 36. Have the Government ripped up their own White Paper in the space of a couple of days? This is a chaotic approach to a matter that is so serious, and it shows a ridiculous wobbling in the face of a small group of people who I do not believe speak for the majority in this country.

[Yvette Cooper]

I think that the right hon. and learned Gentleman is right on two counts. First, I think that this inconsistency and buckling in the face of objections from what I consider to be an unrepresentative group is the wrong approach. Secondly, I think that these customs arrangements are immensely important.

[Mr Fysh]

Will the right hon. Lady give way?

[Yvette Cooper]

No, I will not, because there is a time limit and I want to finish my speech early so that others can contribute.

Members who oppose any form of customs union are underestimating the significance of rules of origin checks which, according to the Government’s own analysis, can burden businesses with additional costs amounting to between 4% and 15%.

--- Later in debate ---

[Caroline Lucas (Brighton, Pavilion) (Green)]

I support all those who have been arguing for continued membership of the customs union, and therefore I support new clause 1. It is clear from everything we have heard today that, if we are to avoid serious economic hardship, membership of the customs union is essential. Frankly, the wrecking ball that the hard Brexiteers would bring to British business and industry is pretty extraordinary, and all for what?

The Prime Minister had it pretty much right when she spelled out:

“We export more to Ireland than we do to China, almost twice as much to Belgium as we do to India, and nearly 3 times as much to Sweden as we do to Brazil. It is not realistic to think we could just replace European trade with these new markets.”

She said that in April 2016, and I contend, as the Prime Minister herself is fond of saying, that nothing has changed.

In the brief time available to me, I will raise the issue of standards, particularly in relation to my amendment 71. Clause 8 sets out factors to which the Treasury must have regard when considering the rate of import duties that apply to goods. Those factors include the interests of UK consumers and the desirability of maintaining and promoting productivity and external trade.

Amendment 71 would add to those factors. First, it would add the interests of UK producers, particularly farmers. Secondly, it would add the desirability of ensuring that UK standards of animal welfare, food safety and environmental protection are not undermined by imports produced to lower standards.

The Prime Minister said at Prime Minister’s questions in February 2017, and many times since:

“We should be proud that in the UK we have some of the highest animal welfare standards in the world—indeed, one of the highest scores for animal protection in the world. Leaving the EU will not change that…we are committed to maintaining and, where possible, improving standards”.—[Official Report, 8 February 2017; Vol. 621, c. 424.]

Similarly, we have heard the Secretary of State for Environment, Food and Rural Affairs say on many occasions that we need to maintain, and where possible enhance, environmental and animal welfare standards. However, if the UK is unable to protect its farmers from being undermined by lower-quality imports, those farmers are likely to find it hard to be competitive and to go further on improving their animal welfare and environmental standards. Accordingly, when negotiating new trade agreements, it will be vital that the UK insists on the inclusion of a clause permitting it to require imports to meet UK animal welfare and environmental standards. I have tabled an amendment to the Trade Bill to that effect.

If that were not to happen and we were to lose the principle of prohibiting products that do not meet our standards, we would need some kind of backstop, which is where amendment 71 comes in. It would give Ministers the power to place differential tariffs on imports. Imports that do not conform to UK welfare standards would be subject to tariffs high enough to safeguard UK farmers. It would ensure that UK farm businesses were not undermined by low-quality products and that UK consumers would be protected from goods of a lower standard—chlorine-washed chicken, ractopamine-fed pork and hormone-treated beef, to name but a few—through tariffs on imports that do not meet UK standards. These tariffs would effectively make the cost of these lower-welfare products an awful lot higher to protect our standards here in the UK.

[Mr Fysh]

The hon. Lady makes an important point about the value of trade defences in our armoury. Would she consider supporting new clause 36, which is essential if the UK is to be able to operate its own trade defence policy, because if the EU is not collecting our tariffs for us at our border, there will potentially be nothing we can do about that?

[Caroline Lucas]

I am afraid that I do not share the hon. Gentleman’s faith in our own Government continuing to keep higher standards. We have already heard clear criticisms of new clause 36 for many other reasons, including the way in which it drives a coach and horses through the kind of customs union that we want, so I will not be supporting new clause 36.

I was going on to give examples of ways in which food standards in the US are much lower than our own. Many may find the prospect of eating chlorine-washed chicken disturbing. Although there appears to be no clear scientific evidence that it poses a substantial risk to human health, it is linked to poor animal welfare on farms and at slaughter. Similarly, ractopamine is a feed additive used to promote growth in pigs, and its use is permitted in the United States, but prohibited in the EU. There is evidence that it has a detrimental impact on pig welfare, with the Humane Society of the United States stating that it

“causes death, lameness, stiffness, trembling and shortness of breath in farm animals”.

Concerns have been expressed about its impact on human health as well.

My amendment 71 would simply require the Treasury, when considering the rate of import duty that ought to apply to any goods, to have regard to the interests of UK producers, such as farmers and to the desirability of ensuring that UK standards of animal welfare, food safety and environmental protection are not undermined by imports produced to lower standards. I will wrap up my comments about it there.

I am supporting a number of other measures, including that on dealing with impact assessments, which are vital when we talk about impacts on the economic situation in this country and on the Northern Ireland border. However, I just thought that it was important to put something on record in this debate about the impact on animal welfare and environmental standards, too.