Exiting the European Union: Sanctions

Meg Hillier Excerpts

Wednesday 19th July 2017 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is a great pleasure to follow two such excellent maiden speeches. I congratulate the hon. Member for Saffron Walden (Mrs Badenoch) on her speech. We share a background and a love for the London Assembly, of which we have both been members, and for Nigeria; I sense that she shares not just my love for it, but my frustration that that wonderful country still faces so many challenges. I look forward to working with her over the coming years. I also congratulate the hon. Member for Northampton South (Andrew Lewer) on his speech. He has described his interesting and illustrious predecessors, but his track record, both in Europe and as an excellent council leader, augurs well for his future here. I am sure that he will be named similarly in future maiden speeches. I welcome them both to this place.

Today, we are here to focus on exiting the European Union and sanctions. I want to discuss both those things—together and slightly separately—because they are very connected. I reiterate the comment made by my hon. Friend the Member for Bishop Auckland (Helen Goodman), which is: where is the Bill, Minister? We have already seen the publication of the grand repeal Bill, but this Bill has a pretty important connection with that. We cannot do the one without the other, and it really sums up, as the hon. Member for Livingston (Hannah Bardell) said, the challenges of how we timetable and deliver on this hugely challenging programme for our Parliament over the next 20 months. The Minister’s response to that from the Dispatch Box underlines the lack of planning that we have seen on the Public Accounts Committee, which I have had the privilege of chairing for the past two years, where we have repeatedly heard examples from permanent secretaries about the lack of planning—a deliberate policy.

For example, on 7 July, the permanent secretary to the Treasury confirmed, when questioned, that the Prime Minister had said at several points that the civil service was not, as a whole, preparing for Brexit. On 13 July, Sir Martin Donnelly, the permanent secretary to the then Department for Business, Innovation and Skills, said:

“We were following the guidance given by Ministers, which was not to make contingency plans for this outcome.”

On 26 October, we heard from Jon Thompson, the permanent secretary and chief executive of Her Majesty’s Revenue and Customs, of the eight serious areas that his Department has to consider now that Brexit is a reality. I will not run through them all, because it is not the main point of the debate, but let me just mention customs. He said that,

“we run £40 billion-worth of the benefits system in tax credits and child benefit…there is excise and the decisions to be made there…there is VAT…and the question of what difference this would make to direct taxes and state aid.”

He went on to list other big concerns.

Let me take HMRC as an example of the challenges that this Government, this Parliament and this country face as we move to leaving the European Union over the next 20 months. That Department is already going through huge change in its estate management, in its IT and in the way that it tackles and deals with taxes.

We all know that it takes about 18 months on a fair wind to make a major change to the tax system, which is why budgets are planned some time in advance for those technical points, and yet the permanent secretary and the chief executive of HMRC has listed to our Committee and to this House eight other serious areas of concern—more than one Government Department can realistically manage—and that is just one Department. I have to say that that permanent secretary was the only one who actually had a long list. Other Departments—I will not name them all—mentioned the discussions they were having, but nothing really concrete about how they were planning to implement our exit from the European Union.

[Hannah Bardell]

The hon. Lady is making some pertinent points about HMRC and the challenges of the customs system going through a transitional phase when it is already creaking under the pressure. Does she not also share my concern that in constituencies such as mine in Livingston, a high proportion of staff who are highly skilled in such systems and processes will be lost because of the transition the Government are going through? If we put Brexit on top of that, it becomes a perfect storm that is about to hit us.

[Meg Hillier]

The hon. Lady makes an important point. If we add on the other changes in Government Departments—the DWP is going through some changes of property and where jobs might be—that poses a challenge. We face a challenge with skills in this country anyway, and we can add to that our exit from the European Union and the fact that we have so many unanswered questions about what will happen to EU citizens residing in the UK and others who need to come here. We heard only the other day that the NHS needs to bring in a large number of GPs from the European Union because we are unable to recruit in this country. Whatever one might have thought of these policies before, we are now seeing skilled people who are potentially unable to move to new locations and we do not yet have a skills strategy to fill not just those gaps but the others we might see as we leave the EU. A perfect storm is perhaps a polite way of putting it; I could think of fruitier ways of describing it, but I will leave the fruity conversation to the hon. Member for Saffron Walden, who stretched the boundaries further than I will on this occasion.

I will not list every Department and its problems, but we have a long list if other hon. Members are interested in seeing it, given the challenges that each Department faces in its exit from the EU, the lack of planning, and the lack of joined-upness across Government. A problem in one Department, such as HMRC, will have knock-on effects in another, such as the Department for International Trade. We cannot see these things in isolation and there is not yet a coherent plan.

I hope that when he sums up the Minister can reassure me that what I am saying is not true, but the evidence we have seen in Committee suggests that this is the reality. As I have said, senior civil servants acknowledged that they were told very definitely not to plan for the leave scenario, which has put us very much on the back foot.

[Chuka Umunna]

Does my hon. Friend agree that this reinforces the need for proper transitional arrangements? We are talking not only about the time that will be necessary. It seems to me that all the points she has just made are an argument for this country remaining part of the customs union and part of the EEA—the single market—at least in the interim, as we make our way out of the European Union.

[Meg Hillier]

My hon. Friend raises an important point. As we approach the summer recess—with only one Bill published for our exit from the EU, with no serious plans on the table, and with it becoming apparent that when we come back in the autumn we will not get going seriously until October—we are getting to a point at which we will not even have 18 months to get this show on the road. I am assuming and hoping that Ministers will work 24/7 over the summer to get us to a better place, but even then the timetabling of business through this House means that practically—whatever one’s philosophical view—this cannot be done in time.

I am not saying this because I am a remoaner or a doomsayer. I might have been very positive about wanting to stay in the EU, as was my constituency, but let us be practical about the reality. The delay in delivering the sanctions Bill is another of the many concerns.

It is important that I highlight the concerns of many of my constituents who are EU citizens about the uncertainty they are still facing. Even now people are phoning me or coming up to me in the street in tears because of their concerns about their future. We have heard some degree of certainty from the Prime Minister: she has told us that there will be a mechanism for those people already living here who are EU citizens to regularise their stay, but that will not be published until the end of 2018 and there is still no certainty about the costs.

I was a Home Office Minister, and much as I like to gloss the previous Labour Government as one of the best we have ever had, the reality is that the Home Office—then and now—faces huge challenges in the number of people going through its immigration system. I grappled with that as a Minister, and I did not solve it. We grapple with it as Back Benchers. I certainly do in my constituency, where I have a high number of people going through the system. The idea that, between the end of next year and when we leave, all those who so wish will be able to go through a regularisation process is cloud cuckoo land. It is not surprising that those who can afford it are going through the long-winded process of regularising their stay, getting residency and applying for citizenship.

I spoke at the weekend to a constituent, an international banker who has children. It costs £300 to reach the first hurdle in the legal process. She told me, “If I’m not wanted here I might just leave.” For her, leaving is a real option as she could get a good job elsewhere. Other good, skilled people who have given up their lives in other countries to work in the UK and pay taxes feel like turning their back on us. Some who have been settled in the UK for 15 or 20 years, whose children have grown up here, are very concerned about what the future means for them. Despite the Prime Minister giving some words of comfort—late in the day, and I do not know why this could not have been dealt with before—we need to resolve this sooner rather than later.

Sanctions are the main thrust of the debate. I am strongly of the view that UK-EU co-operation needs to be maintained. I say that not because I am trying to rewind the clock on the referendum—much though this is not where I wanted us to be—but because of a simple question: where would we have differed from the EU on sanctions? There are issues with money laundering and our approach to big international questions such as freezing assets across boundaries, travel bans, trade, and market restrictions, which are but a small part of that approach.

The timetabling of a sanctions Bill to fit with the great repeal Bill is another practical problem. For three years, on behalf of the British Government, I negotiated home affairs at the table in Europe with 27 member states. It took long enough to reach agreement but it was possible. However, trying to enact our Bill and align us, where we would normally agree with our European counterparts, will be incredibly challenging. It will be difficult, at this pace, to write that into law.

We must be frank: this House is not very good at legislating. The Government draft legislation—often in a hurry, and quite a lot will now be written in a hurry—the House has little chance seriously to amend it but must instead pick on the bits we can most likely amend, and as a result it often does not hang together very well. We legislate in haste and repent at leisure, taking a long time to unpick things. That is not true in every case, but as Ministers or Back Benchers dealing with our constituents’ problems we have seen it often.

Would the UK seriously go it alone? No, I think we would not, and I hope the Minister will be clear on that. Why do we not find a way of maintaining the status quo, for a transitional period at least? I fear how the Bill will fit in when it eventually comes before the House.

I have some simple questions for the Minister. How do the Government intend to timetable the repeal Bill and the future sanctions Bill, ensuring that they can work together and there is no contradiction? It would be crazy if we ended up legislating on two separate issues related to Europe, only to find that they do not work together.