Leaving the EU: Customs

Matt Western Excerpts

Wednesday 16th May 2018 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The Minister for Cabinet Office gave all sorts of procedural reasons for why these papers should not be released. He spoke a lot about the relationship between Parliament and the Executive, but he did not mention the people who matter in all this: the British public, our businesses and the trade unions that represent workers who will lose jobs if we crash out of the EU with the reckless hard Brexit that the Government are currently pursuing.

It is no wonder that the Government do not want to release such papers and information because, after weeks of trying to prevent papers from being released, we saw Treasury documents that made it clear that, under all the options being pursued by the Government, we will see job losses, a loss of revenue, a lowering of growth and an increase in public sector borrowing—all the kinds of things that will have an impact on communities up and down the country. Indeed, documents about nuclear safeguards were released today, and the Government marked each one as red. This information should be in the public domain for the public and our businesses to see.

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend is making an important point. Does he accept that we are already seeing the loss of many hundreds of jobs, particularly in our manufacturing sector and particularly in the west midlands, by virtue of these policies and the uncertainty surrounding them?

[Stephen Doughty]

My hon. Friend makes a crucial point. I have the same worries about businesses in Wales, in south Wales and in my constituency.

This is our biggest decision since the second world war, and as my hon. Friend the Member for Streatham (Chuka Umunna) pointed out, we have a total shambles from the Government. Rows are largely being conducted in public, but without the public knowing what the Government know about the real impacts on businesses and on Northern Ireland and the huge inconsistencies in what is being put forward, let alone the risks to our place in the world.

We have heard about the risks of leaving the customs union. We have heard about the £466 billion-worth of current goods trade with the EU. The Brexit Secretary’s special adviser said that there would be a cost of £25 billion a year up until 2030. Her Majesty’s Revenue and Customs has pointed out the issues with customs checks on imported goods. The Home Affairs Committee revealed the lack of preparation at the Home Office, including the lack of recruitment of people to carry out customs checks, and the cost of all that. We have not even left yet, but the Home Office has already had to request up to half a billion pounds that could have been spent on policing. Instead, it is going on preparing for a hard Brexit. We have also heard about the impact on the Northern Ireland-Republic of Ireland border, including some excellent points, as ever, from the hon. Member for North Down (Lady Hermon), but the Northern Ireland Secretary has not even been to Brussels to discuss the issues and the Brexit Secretary went over to Northern Ireland only relatively recently.

My hon. Friend the Member for Warwick and Leamington (Matt Western) pointed out the risk to jobs, and we repeatedly hear that directly from businesses. Many businesses have come to see me in private to tell me how disastrous the Government’s approach is. The truth is that the Government know that, but they are just not willing to admit it in public. Many businesses are activating major Brexit contingency plans. We have heard about the automotive sector, but the National Farmers Union has also described the scenario as disastrous. The pharmaceutical industry has warned about the impacts, and the Chemical Industries Association has made it clear that the best thing for us is to retain our membership of the single market and the customs union.

I have spoken extensively with the UK Chamber of Shipping about the impact on Welsh ports, including in my constituency, and it warns that the UK is facing an absolutely catastrophe. The same goes for steel, manufacturing, high-tech industries and, of course, the creative industries. We should not forget about the ability of our musicians and creative people to travel across Europe, making incredible products and selling them to the world.

As my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) said, we cannot fundamentally divorce all that from the arguments about the single market. I favour our staying in the EEA and in the customs union, and the Social Democratic and Labour party—Labour’s partner in Northern Ireland—has said the same. At the moment, however, the Government are riven in two in public and in private. They are unprepared, irresponsible and incompetent, and, what is worse, they know it.

--- Later in debate ---

[Mrs Madeleine Moon (Bridgend) (Lab)]

Let us make no mistake: the only way to ensure tariff-free and frictionless trade, as well protecting against a hard border on the island of Ireland, is to remain in the customs union.

The Secretary of State for Exiting the European Union told me in a recent debate that the Canada-United States border was an example of a customs arrangement that the Government may seek to replicate. However, the Irish Prime Minister, having visited that border, said:

“I saw a hard border with physical infrastructure, with customs posts, people in uniforms with arms and dogs.”

That is not what we want for the border in Ireland.

[Matt Western]

Having visited Detroit and that border between the US and Canada in February, I can confirm that it takes an average of eight minutes to get through, and that it is what a hard border looks like, with X-ray machines and so on. There would be serious friction on such a border.

[Mrs Moon]

It is good to hear such first-hand experience in the House. Clearly such an option is unacceptable for peace in Ireland and the efficient customs regime that we seek. Donald Tusk has effectively said that if Ireland does not find the UK’s offer on the border acceptable, the EU will not allow negotiations to move on to trade. If we also consider the fact that the Irish Prime Minister has said that the US-Canada border example

“is definitely not a solution”,

it is clear that the only way forward is to remain in the customs union.

My constituency of Bridgend has the largest Ford engine factory in Europe. The automotive sector is critical to the wellbeing of many families throughout my constituency—on average, around 12,000 families are linked to work with that factory. According to the Society of Motor Manufacturers and Traders, the introduction of tariffs on trade with the EU because of our leaving the customs union would significantly increase costs. A 10% tariff on finished vehicles would cost the industry £4.5 billion, increasing the price of cars imported to the UK from the EU by an average of around £1,500. Tariff costs and custom burdens on such a highly integrated supply chain would undoubtedly disrupt and undermine the competitiveness of UK manufacturing, and that is without the common standards and rules mentioned by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden).

The Government have said that one of their strategic objectives is

“ensuring UK-EU trade is as frictionless as possible”.

Automotive experts have made it crystal clear that customs barriers and tariffs would be crippling for their industry. As frictionless as possible is just not good enough. It is no secret that the single market and customs union have been vital for the competitiveness of the sector. In the UK, it has made more than £71 billion in turnover and supports more than 800,000 jobs. That is not something that we can toss away lightly.

To protect jobs and to protect the automotive industry, the Government should be actively seeking to avoid any customs tariffs whatsoever. The only way to do that is in the customs union. My constituents deserve to know what future the Government are taking them towards. They have the right to make the ultimate decision, based on the facts—facts that were denied to them at the time of the referendum. Let them have those facts now, and let us know what the Government know about the risks we are taking as a result of their line of taking us out of the customs union.