Taxation (Cross-border Trade) Bill (Third sitting)

Nic Dakin Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Mel Stride]

I will take the hon. Lady’s references to “you” as not meaning the Chair of this Committee, but me. The issue that she has raised, which ran in the press a few weeks ago, relates to an issue for the Home Office and Border Force, not HMRC. It is outside the immediate scope of this Bill. I know that at least one Minister in the Home Office was able to refute those suggestions, but I will not dwell on that in this Committee.

[Nic Dakin (Scunthorpe) (Lab)]

The other thing that came out in the evidence was the concern about the loss of experience at a critical time. Is the Minister giving us a strong assurance—I think he is—that there will not be any problems as we move forward? If there are any problems, the Minister and HMRC will be jointly and severally responsible.

[Mel Stride]

I thank the hon. Member for his very helpful intervention. Of course Ministers have responsibilities for the areas that they oversee. I can assure the hon. Gentleman that I have had discussions with HMRC staff, including the head of HMRC, and we have looked specifically at the right mix of skills and people, so I am confident that we will have the right team in place to meet the challenges ahead.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Schedules 1 and 2 agreed to.

Clause 4

When liability to import duty incurred

Question proposed, That the clause stand part of the Bill.

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Ian Cranshaw noted that the exception is UK Steel, which has been active on this issue in recent years. That is because the UK steel industry has been especially vulnerable to dumping. Perhaps the most notable example was Tata Steel’s well-publicised difficulties in 2016, which were in part owing to imports of cheap Chinese steel. Some media commentators alleged that the UK was part of a blocking minority of member states that had resisted EU efforts to toughen anti-dumping legislation that would have allowed for retaliatory tariffs.

[Nic Dakin]

My hon. Friend is setting out the case for the measures he is arguing for very strongly. He may or may not agree, but it seems to me that it is important that, when considering what to do, the actions he is talking about need to be taken.

[Jonathan Reynolds]

I agree. Every member of the Committee will recognise my hon. Friend’s constituency interest and expertise in this area. I felt that the evidence that UK Steel gave us earlier in the week was particularly helpful in being prescriptive as to where it believes the Bill falls short. As an industry, it is especially susceptible to gaps in trade remedy legislation given the historic damage that dumping has done to the sector.

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[Nic Dakin]

The opportunity of leaving the European Union ought to be to speed up these processes, and to give greater confidence to the industry rather than less confidence.

[Jonathan Reynolds]

That is absolutely the case. Gareth Stace from UK Steel told us last Tuesday:

“The Government can promise anything they like, but more than a third of all tariffs in place affect the steel sector and it hits us hard, therefore, if this system, when it comes out, is not appropriate for what it is trying to do.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 68-69, Q105.]

That will clearly result in huge problems for the sector.

UK Steel’s main reservation with the Bill is the lack of detail, as my hon. Friend has said, which is present on a number of fronts where it believes the industry needs more certainty. Secondary legislation is being relied upon to provide a huge amount of the practical information we need. One of UK Steel’s specific concerns is around investigations relating to the dumping of foreign subsidies that can cause injury to UK industry. As related by Dr Cohen in her testimony, to which I referred earlier, there is no information on how dumping margins are to be calculated.

UK Steel goes further and sets out a list of other considerations that should be taken into account, including how to assess whether a UK industry has been injured; how to determine if such injury has been caused by the dumped or subsidised imports; what principles may be used in defining the products covered by an investigation; how subsidies can be defined; what evidence an industry needs to produce to trigger an investigation; how to conduct an investigation, including any time limits; and how to require guarantees to cover possible future duties when provisional measures are required. It is a long list and I could go on, but in the interests of the Committee’s time I will not. However, it serves to illustrate the point that there are a number of multi-layered and complex considerations to take into account.

I also want to underline that this is not a matter of protectionism. As Gareth Stace also made clear in Tuesday’s evidence session:

“The steel sector thrives on free, liberalised trade. A third of all steel produced in the world is traded across borders.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 67, Q104.]

At present there are zero tariffs between developed nations for steel trade. It was his belief that, without trade remedies, there will be an increase in protectionism, as they are essential to allowing free trade to take place. I thoroughly endorse that message.

The upshot of such deputations is that manufacturers are not asking for special measures from the outset, but pointing out that we are on the cusp of a complex world post-Brexit and they need more detail. It has been the Government’s choice not to include such detail in the Bill and it is too late to make that change now. It is clear, however, that the lack of certainty that results has not been optimal for our manufacturing sector and has inhibited its ability to make plans and prepare for the future.

As UK Steel has highlighted, the legislation lays out the bare minimum needed, delegating all detail to secondary legislation. It is true that we are on a tight timeline for negotiations, but there is a wealth of global legislation that could have been drawn upon to help inform the Bill, such as the US Tariff Act of 1930, the Canadian Special Import Measures Act, the EU Regulations 2016/1036—

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[Kirsty Blackman]

This aspect of the clause is about

“considering the rate of import duty that ought to apply to any goods”,

and we have tabled amendments. The Government have chosen not to include in this provision a reference to “any other factor” or even the preferable “any other relevant factor”, but have laid down a number of factors that they are believe are relevant in this case. Both the Scottish National party and the official Opposition, with amendments 1, 78 and 106, are trying to increase the number of factors that will be considered when the rate of import duty that ought to apply is being considered. The clause already includes

“the interests of consumers…the desirability of maintaining and promoting…external trade…the desirability of maintaining and promoting productivity…and…the extent to which the goods concerned are subject to competition.”

On amendment 1, I associate myself with many of the shadow Minister’s remarks about the importance of manufacturing. It has been concerning that the Government have not taken into account the interests of manufacturing in many of the actions that they have taken. Therefore, it would be useful for the House to have the comfort that the Government would have to consider the importance of manufacturing when they were making these decisions.

The Scottish Government are in a much better place in that, in relation to steel and Tata Steel specifically, we have saved the Lanarkshire plants, and we have worked with BiFab. If the UK Government had previously taken actions like that, we would be in the much better position of feeling that they would be likely to protect the interests of manufacturing. We are therefore happy to associate ourselves with the Labour amendment.

Amendment 78 has been suggested by Traidcraft. I will talk about exactly why Traidcraft says that it is important. The UK has signed up to the sustainable development goals. They are incredibly important for the future of the world—for our children and our children’s children—in ensuring that there is sustainable development. Traidcraft says:

“It is therefore vital that consideration of sustainable development is contained in primary legislation to avoid the potential for the UK to inadvertently contravene its global commitments…If sustainable development were added to this list it would ensure the Government were able to fulfil its global commitments.”

That is a strong message from Traidcraft about this aspect of the clause. Because, as I said, the Minister has not included in it “any other relevant factor”, we want to be clear that the Government are protecting the interests of manufacturers, but also the interests of the future of the planet.

Amendment 106 is in my name and that of my hon. Friend the Member for Dunfermline and West Fife. Again, the factors that the Minister is required to consider when setting the rate of import duty are not wide enough. We suggest including a reference to the public interest generally, so that the Minister and the Treasury, in making these decisions, would be required to look at whether the public interest generally would be served by the rate of import duty that they were imposing.

All three proposals are relevant considerations for the long-term future of manufacturing which, given the not-very-good productivity in the UK, is hugely necessary and something that we need to protect. I do not know how anybody could argue with looking at sustainable development, given that the future of our planet is at stake. On the point about the public interest in general, we are all here to represent our constituents—we are here to ensure that their views are heard in this place—so it is completely reasonable that the Minister and the Treasury, in making any rules under this aspect of the clause, would consider the public interest generally, as well as the other four factors already mentioned.

[Nic Dakin]

In opening the debate, the Minister helpfully said that the intention was to introduce things in a way that did not disrupt things that were currently going on. The advantage of amendment 1 is that it would help to bring that about by adding in “the interests of manufacturers” as part of the test. It would give confidence to manufacturing areas.

I speak as somebody who represents a steel town. The confidence of manufacturers and the people who work there, who are also significant consumers in the local economy, is important because those manufacturing sectors desperately need investment in capital and in new ways of working to remain competitive in a competitive world.

The Minister and the Government would do well to consider that, because it would assist in delivering continuity—the outcome that the Minister set out at the beginning—and the confidence necessary for the investment we need. We cannot delay investment, although that might happen, because that would mean delayed opportunity. One of the Government’s overriding responsibilities is to put confidence into the system so that the risks of leaving the European Union are diminished and the opportunities are enhanced.

Taxation (Cross-border Trade) Bill (Fifth sitting)

Nic Dakin Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 30th January 2018 Public Bill Committees

[Graham Stuart]

The Bill ensures that the UK customs regime is ready for EU exit. A key part of our readiness for exit day is our ability to operate our own trade remedies system. Trade is good for the UK. It can lead to higher wages, stimulate business efficiency and productivity and improve consumer choice. Analysis by the OECD suggests that a 10% increase in openness is associated with a 4% increase in income per head.

[Nic Dakin (Scunthorpe) (Lab)]

Will the Minister clarify whether the Government have done a comparative impact assessment of the processes involved with the EU and the processes they are trying to put in place in terms of speed and timeliness, which we are all concerned about?

[Graham Stuart]

I am grateful to the hon. Gentleman for that question. I will seek at some point in the debate to address his point.

Free trade does not and should not mean trade without rules. Trade remedies are an important safety net. They can help enforce the rules that make free trade work by addressing injury to a domestic industry caused by unfair trading practices or unforeseen surges in imports. That is why all major WTO members have a trade remedies regime, and why we are taking forward the measures in the Bill. The European Commission currently carries out trade remedies investigations and imposes measures on our behalf. Once we leave the EU, we will need to be able to do that for ourselves. Clause 13, together with schedules 4 and 5, sets up the UK framework to allow us to do just that.

These proposals fall under the international framework set by the WTO. We are legislating for the full suite of powers permitted under that framework, which will enable us to impose additional duties on imports that cause injury to UK industry. The message is clear: free trade and the benefits it brings are welcome, but the UK will act decisively to address trade that causes injury to our domestic industries.

We cannot forget the wider ecosystem of our economy. Tackling injury is the priority, and the Bill makes clear that there is a presumption in favour of imposing additional duties when UK industry suffers injury as a result of unfairly dumped or subsidised imports. In recent years, trade remedy measures have protected UK industry and its employees, particularly in the steel and ceramics sectors but also in the chemicals, biofuels and glass industries. Considering that manufacturing contributes around 10% of UK gross value added and 8% of employment, the need for the UK to have a trade remedies system once we leave the EU is apparent.

Without the ability operate our own trade remedies regime, the UK would be exposed to unfair trading practices and unforeseen surges in imports, with potentially damaging consequences for UK industry and the economy more widely. However, there must also be a mechanism for ensuring that imposing such duties is not contrary to the best interests of the UK as a whole. Duties on imports can increase costs for downstream industries that use those imports to create their products. They can also hit the purses of consumers. That is why the Bill ensures that any duties are set at the level needed to address injury to UK industry and no higher. That levels the playing field without causing unnecessary harm to downstream users and consumers.

We are also building in a safety valve to ensure that measures are not imposed where they are not in the overall interests of the UK. The economic interest test will consider whether duties would have a disproportionate impact on a particular area of the UK or on particular groups in the UK. The test will also consider issues such as the impact on the longer-term competitive environment in the UK.

Businesses can have full confidence that that test, and investigations as a whole, will be objective and impartial. The new Trade Remedies Authority, which will be established through the Trade Bill, will have the independence and technical expertise to determine complex matters of fact. When the authority concludes that measures are justified, it will make independent recommendations to Ministers, who will then reach a final decision. Ministers will be able to reject recommendations to impose duties where they consider they are not in the public interest. Where Ministers do so, they will do so transparently, and they will have to make a statement to Parliament setting out their reasons.

As Monckton Chambers noted in its response to the trade White Paper, that structure ensures that

“the complex judgments made in such cases are, and are seen to be, made independently”.

It strikes a delicate balance between ensuring that the investigation and the calculation of proportionate duties is carried out by impartial experts, and ensuring that there is an opportunity for Ministers to intervene if duties are not in the public or wider economic interest. We believe that these provisions are therefore fundamental to establish a robust but proportionate trade remedies system for the UK.

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In short, can the Minister give the Committee any reason—just one would be helpful—why the Government should not include the standard procedure in the Bill to allow Parliament its proper role of scrutiny? I hope he will be kind enough to respond to each of these questions, as the many great producers in the United Kingdom will no doubt be listening carefully and avidly, hanging on every word he says, hoping he might ease their concerns.

[Nic Dakin]

It is a pleasure as always to serve under your chairmanship, Ms Buck. As my hon. Friend has pointed out, the amendment is about certainty for business and industry. At some point, the Government need to bring detail forward. The longer detail is left, the more problematic it will be for business confidence, particularly in an industry such as steel, which is freely traded. It is a free trade industry, so it needs to ensure fair trade. That is why it is not surprising that steel has such a significant number of trade defence instruments in the European Union. That ensures a level playing field under WTO rules against other parts of the world where people want to trade unfreely.

At some point the Government need to bring forward the detail. The problem with this part of the Bill is that it is just a framework with nothing more to it. I therefore very much welcome the amendments tabled by my hon. Friends, because they would bring some certainty and sense into the area. At some point the Government will have to do that. They may say the amendments are not appropriate now—they are drawn very much from what is already there in the European Union and have been written across—so my challenge to them is to ask why they are not appropriate. When will we have the appropriate provisions in place?

We need to have certainty and confidence. These major foundation industries, such as steel, ceramics, oil and gas, that rely on strong trade defence instruments to ensure that they can trade not only freely but fairly need significant capital investment to stay at the cutting edge of development. To make that capital investment now, they need confidence about the framework of the future. That is why the Government should not dilly-dally. The sooner they can bring things forward the better.

The Opposition are doing their job in trying to be helpful to Government by bringing forward something that is compliant with WTO rules and would give the necessary confidence. We would know more about how investigations would be conducted, how calculations would be made and how remedies would be applied—the sort of detail that industry needs.

In a sense, the challenge to the Government is that we all agree. I welcome the Minister’s robust approach this morning—it is the approach we always enjoy from him—but there has been a clear commitment to speedy, timely and effective protection and relief for businesses that are unfairly competed against by the threat of dumping from abroad. However, we need appropriate mechanisms in place to deliver on that rhetoric. The longer it takes to get that detail in place, the more the hesitation, concern and lack of trust in the Government will grow. It is in no one’s interest that the Government should not be trusted in such a crucial area. Therefore, the Government, by taking steps sooner rather than later, and embracing the Opposition proposals, would be moving briskly in the direction of the Minister’s rhetoric.

[Graham Stuart]

I thank the hon. Members for Bootle and for Scunthorpe for excellent contributions to the debate. I entirely agreed with many of the issues that they highlighted.

The amendments would set out a great deal of the technical detail about the determination and calculation of dumping on the face of the Bill, rather than in secondary legislation, and would require the Government to define the meaning of

“serious injury to UK producers”

affected by unforeseen surges in imports, in accordance with article 4 of the WTO Agreement on Safeguards.

Of course, we accept that it will be necessary to set out further details in legislation. As I and my right hon. Friend the Financial Secretary have said from the beginning, the Bill is a framework Bill. It is intended to provide the framework for the UK’s trade remedy system but, as is normal where there is a great deal of technical detail to be legislated for, that will be set out in secondary legislation.

Industry has contributed its thinking to the detailed technical areas, and we shall engage with all stakeholders with detailed proposals in a series of meetings starting next month. I entirely agree with those who have spoken so far about the need for speed; but they would also agree about the need to get things right. Our aim and the purpose of introducing the Bill is to make sure we have a suitable framework for the long term. That is why we are going to get it right, as well as getting it in place in the appropriate time.

[Nic Dakin]

I very much welcome the Minister’s commitment to engage in a timely way with stakeholders. Can he give us a timescale by which the engagement will be concluded and proposals will come out of it, to give some detail and confidence?

[Graham Stuart]

I shall do so in due course. The detail of the secondary legislation will be constrained by and compliant with the WTO rules, but the rules that we set will be appropriate for the UK. Because they will be set out in secondary legislation there will be the necessary flexibility to allow changes to be made quickly, reflecting developments in best practice and WTO case law. I am sure that the Committee will agree that that is important, and that is why we do not think it is appropriate to include those matters in the Bill.

As to market distortions I reassure the hon. Member for Bootle that the legislation will enable the UK trade remedy system to account for particular market situations in anti-dumping cases. All major economies have a trade remedies framework that allows alternative methodologies to be used in investigations when the normal value of a good cannot be properly determined based on information from exporting countries. The UK will be no different. We have already discussed this with industry and will continue to do so, to get it right.

I recognise the underlying intent of amendment 62, to increase legal certainty for UK industry by including the requirement to act in accordance with the WTO Agreement on Safeguards. However, it is unnecessary. As members of the WTO we will be required to adhere to the provisions of WTO agreements, and we have been clear about the fact that we are committed to developing the detail of the UK’s trade remedy system in a way that is fully compliant with the obligations. By way of further reassurance, clause 28 of the Bill requires the Secretary of State and the TRA to have regard to their international obligations. On that basis I hope that the hon. Gentlemen can see that their concerns will be met by the approach that we shall continue to take, and that the amendment will be withdrawn.

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[Graham Stuart]

It is a framework Bill—skeletal or otherwise—and the detail will come in secondary legislation, as is entirely normal for issues such as this. In response to the question from the hon. Member for Scunthorpe on when we will be ready to bring secondary legislation forward, we will do so as soon as possible. Evidently, that will need to be in time to ensure that the UK system is ready for when we exit the EU. That is the time constraint. We are working on this. We will engage in detail with industry, starting next month. We are bringing this forward as quickly as we can.

If the Opposition decide to press the amendment, that is fine, but cutting and pasting WTO agreements with which we will comply is not the same as having an appropriate system in place for the UK. This is not the right moment or place for these proposals, because this is framework legislation.

On why we should have secondary legislation, we need flexibility to adapt to developments in WTO case law and, if the Committee were to support the Opposition’s amendments, that flexibility would be removed. Changes in WTO case law are frequent: for instance, only last week there was a panel decision on article 2 of the WTO anti-dumping agreement. It is therefore important that we have the flexibility that only secondary legislation provides, so I ask the Opposition to think again.

[Nic Dakin]

Will the Minister confirm once more that the Government intend not to make things any more difficult for producers in terms of trade defence instruments and that, as the detail comes forward, people producing stuff in the UK will not be any worse off in future than under the current EU rules? I think that is what he is saying.

[Graham Stuart]

I would go further than that. By having a system that is entirely aligned with and attuned to the interests only of UK producers, we hope to have a better system than the one we have now. I cannot give firm timelines, because the TRA is not set up yet, but hopefully it will be speedier, more proportionate and balanced, absolutely scrupulous in observing WTO case law, flexible enough to implement it, better attuned to the needs of UK producers, and more effective at averting injury to them.

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[Graham Stuart]

These amendments seek to include specific reference to the relevant WTO agreements in the Bill. As I said in our earlier discussion, the Government have carefully considered the right balance between primary and secondary legislation. Where there are very technical provisions in a regime, those are usually set out in secondary legislation because they are very detailed. That is the case here, so we have taken powers to make the necessary regulations.

As a member of the World Trade Organisation, the UK will be required to abide by the WTO agreements. We intend fully to comply with these obligations, and the regulations will therefore reflect the detail of the WTO agreements. However, as I have said, clause 28 does require the Secretary of State, and the TRA, to have regard to international obligations, which should provide any reassurance needed.

It has been suggested that the injury margin is more complicated and harder to define than the dumping margin. We do not believe that that is the case. Both calculations are based on industry data and export data and involve a number of variables where the TRA would be afforded discretion to use its expertise in determining the appropriate approach.

[Nic Dakin]

Does the Minister recognise that the EU is moving away from that calculation and that, according to the evidence that was presented to us, that calculation involves greater bureaucracy but does not make a great deal of difference in the end, in terms of impact on prices?

[Graham Stuart]

I do not agree with the hon. Gentleman. From a technical point of view, I do not believe that the EU is moving away from its approach to injury. As I say, we are subject to the WTO. The Secretary of State has to have regard to international obligations, and the detail needs to go into secondary legislation. I therefore ask hon. Members to withdraw their amendment.

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[Kirsty Blackman]

I will say just a few things to follow on from the shadow Front Benchers on this. It is strange that market share is being used in this regard as something that will be taken into account. It is almost as if the TRA cannot be bothered to investigate a company if it does not have a certain market share. For that industry, and for manufacturers in particular, it does not matter what their percentage of market share is; what matters is the injury that is being done to them by dumping. Market share is not relevant, and I do not understand why it is included in the Bill. It may be relevant to the Treasury because it affects the tax take it gets from the industry, but it is not relevant to the protection we should be affording to the industry.

This proposal has geographical implications, given that these new goods will be made in the industrial north of the country. Those products may not meet the market share threshold, but they may be incredibly innovative and may improve productivity and make this country a better place to be. Those things will not be taken into account.

I have argued previously that if the fishing industry is decimated as a result of Brexit, that is a geographical issue for the affected communities. It does not have a massive implication for the Treasury’s tax take, but it does for those communities. I fear that this market share test is not only unnecessary, but has implications for the choices that communities make.

[Nic Dakin]

The communities that are the most vulnerable to that disadvantage are often those that voted most strongly to leave because of their fear that they are not getting a fair deal at the moment.

[Kirsty Blackman]

Absolutely, and conversely they are the ones that have been getting the most European funding, so the choice they thought they had to make because of the inequality and uneven economic growth in the United Kingdom will make them lose out in more than one way.

On the issue of new good and fledgling industries, we cannot predict what the world will look like in 20 years’ time. Who could have predicted the rise in the need for electric vehicle charging points, for example? If something suddenly becomes a thing, the effects cannot be predicted. For example, companies making paper straws in the UK are probably seeing their shares going through the roof. We cannot predict the market share of those companies and how quickly it will grow as a result of changes in the culture of the country. I do not think the market share test is appropriate. It is strange to have it in the Bill, and the Government need to rethink it.

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“an appreciation of all the various interests taken as a whole, including the interests of the domestic industry and users and consumers.”

[Nic Dakin]

Can the Minister clarify whether we will have more tests, fewer tests or the same number of tests at the end of the process?

[Graham Stuart]

What I can confirm is that our system will be much more transparent. It will allow those who apply to it, or might be affected by it, to be clearer about how the system will work. That form of transparency is one of the fundamental principles on which we have built this structure.

[Peter Dowd]

That was a valiant attempt to show why the Government are taking a hammer to crack a nut.

[Nic Dakin]

I would appreciate my hon. Friend’s view on whether there are more tests, fewer tests or the same number of tests, transparent or otherwise. The Minister did not answer that question.

[Peter Dowd]

I am not privy to the details, but I believe there will most probably be more tests. I think those tests will be more bureaucratic and will lead to inflexibility. By the time we get around to designing them, they will be more complicated than they need to be. The Government’s position, as I have indicated, is to take a hammer to crack a nut. They are not fleet of foot enough on this issue. I have tried to lay out where we think the Government should give careful consideration. Though I hear what the Minister says, and his concern about transparency, this is so transparent that we can see through the Bill. That is the problem: there is nothing there. Though the Minister has tried to reassure us, I think he has missed the point. The Government are going into potentially dangerous territory and poking their fingers into all sorts of places that they do not necessarily need to poke into. We will therefore push the amendment to a vote.

Question put, That the amendment be made.

Taxation (Cross-border Trade) Bill

Nic Dakin Excerpts

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

[Greg Hands]

I am going to use my three remaining minutes.

The fourth area—again, it is remarkable that Labour is ignoring this—is the potential regulation of the NHS and other public services. I think that Labour Members have forgotten the TTIP debates of four or five years ago. They got very agitated about TTIP and the prospect of granting access to the NHS and other key public services in this country via a EU trade agreement. Now they seem to be happy for the EU, through a customs union, to negotiate potential access to the NHS and our markets. Even worse, we would not have a seat at the table when that trade agreement was set up. I find it remarkable that the Labour party is prepared to do that.

My final point has also not been raised in this debate, but it is a vital aspect of the Bill: trade preferences for the developing world. Again, I think that there is cross-party support for this country doing more and better in this area. The Bill allows for the transition of the scheme of trade preferences, meaning that the UK will have its own scheme of trade preferences. It will transfer overnight the European Union GSP—generalised scheme of preferences—and GSP+ and include everything but arms. Crucially, there will be the ability to improve on that scheme. If we stay in a customs union with the European Union, we will strangle in its infancy that ability to do better than the European Union on trade preferences.

The Trade Ministers to whom I have spoken in the Governments of countries such as India, Pakistan and Bangladesh—they are all really important markets for this country and really important friends—would welcome the UK having the ability to offer better access for their goods than the European Union currently does. I am not saying that we will make a policy decision today, but it is extremely important that the Bill contains the ability for us to do that, and it is an underrated aspect of the legislation. Whatever we think of the access currently offered by the European Union, I do not think that anybody would say that the UK would be unable to offer better access if we had our own preference scheme under the Bill. That has been neglected in this debate.

Whatever we think of the original decision in June 2016, it would be a grave error to enter into a customs union with the European Union. It is not just a question of formalities and practicalities at the border; there many other really important issues, such as trade remedies and trade preferences with the developing world, that make entering a customs union with the European Union a very bad idea. I very much support the Bill and urge the House to reject the new clauses.

[Nic Dakin (Scunthorpe) (Lab)]

I apologise for the fact that I had to attend a Statutory Instrument Committee, but I was present at the beginning and I am here now. It is a pleasure to follow the right hon. Member for Chelsea and Fulham (Greg Hands), who brought us back to the detail of the Bill, which is where I wish to focus my remarks.

I was concerned that the proposed dumping methodology might not address the UK steel industry’s concerns, so I am pleased that the hon. Member for Stafford (Jeremy Lefroy) has tabled amendment 25. I am also pleased that the Government have engaged with Members from all parties and that last week, in response to a written parliamentary question from the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), they underlined their commitment to

“protecting UK industry where it is suffering injury as a result of dumped imports.”

The Government went on to say that they would not allow that to happen and would use mechanisms for the calculation of dumping methods that, on the face of it, seem to have the support of industries such as steel and ceramics. I very much welcome the fact that the Government have listened and have worked with key industries during the Bill’s progress through Parliament.

I am less convinced by the situation in relation to the economic interest test. I was rather hoping that, in line with the rhetoric that we heard throughout the whole argument for leaving the European Union, we would take advantage of the opportunity that leaving the European Union offered to reduce any bureaucratic pressure on industries such as steel, rather than adding to their bureaucratic pressures. The economic interest test in the Bill adds extra layers compared with what currently exists in the European Union, so we have the genius of a Government bringing forward something even more complex than what we already have in the European Union. I did not think that was the purpose of what we were doing; perhaps I was naive.

In Committee, we expressed concerns about the proliferation of economic interest tests that have been built into the regime and that measures must pass before tariffs can be introduced. Of particular concern was the fact that such tests will first be conducted by the independent Trade Remedies Authority and then again by the Secretary of State, theoretically on a completely different basis. As such, we have pushed for the Secretary of State’s power in relation to the tests to be curtailed and at most to act as a sense-check on what the TRA has conducted. Anything more than that will introduce an unacceptable level of potentially political interference into the process. It will be an unnecessary block on what is happening. The real worry is that it will delay the introduction of trade remedies and thereby potentially subject industry to more damage. However, the Government have tabled amendments 103 and 108, which go some way towards addressing the concerns I have just outlined.

Government amendments 110 to 112 and 116 to 118 seek to deal with the replication of tests, but they would not do that sufficiently well, so I shall support amendment 21, tabled in the name of the Leader of the Opposition, which would achieve a better outcome.

Finally, let me say a little about safeguard measures and adjustment plans. I am concerned that the Government intend to require any industry that requests safeguard measures to submit adjustment plans to demonstrate how it will adjust to new market circumstances, before any safeguard investigation can be launched. In essence, that would require an industry to demonstrate what changes it was making to its operations, including efficiencies and rationalisations, before a safeguard investigation could even start. UK Steel and others have pointed out that in situations such as those we currently face in relation to US section 232 tariffs, such a requirement would be unjustified. Industry should not have to make major adjustments to deal with what is likely to be a temporary situation introduced by the non-WTO-compliant actions of another Government. I am therefore pleased that the Government have tabled amendment 113 to modify the requirement, allowing the TRA to waive the requirement when it deems it necessary or suitable. It would, though, be better if that pressure on industry—at a point at which it is already under significant pressure—were not there.

I wanted to put those concerns on the record so that the Government have the opportunity to make further improvements to the Bill as it makes progress in the other place and before it comes back to this House.

[Craig Mackinlay]

I rise to speak to amendment 73, tabled in my name and the names of my right hon. and hon. Friends, and which I wish to move at the appropriate time.

It now has to be a settled will that in future we are not going to be in the, or a, customs union with the European Union. That became clear during the hours of debate on the European Union (Withdrawal) Bill in this place and the other place, and that Bill became an Act. It is clear in the Chequers deal and the White Paper on the future relationship. The statement “We will not be in the customs union” has passed through the Prime Minister’s Lancaster House and Mansion House speeches, and through her statements on the Floor of the House on occasions far too numerous to mention.

We are not to be in a customs union. That was clearly the compact with the public made by the Conservatives and the Labour party in their manifestos last year. It is clearly the will of the people, as expressed in the June 2016 referendum. I do not think there can be any doubt about the clarity, because it was mentioned by all involved in that debate, no matter what side they supported. It is clearly the will of the people, of the Prime Minister and of the Cabinet. Similarly, when we negotiated and passed the European Union (Withdrawal) Bill, it was the will expressed by a majority of this place.

My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) said earlier in an intervention that, were it necessary for there to be a customs union with some part of the world, there would need to be, at the right time, primary legislation that would also incorporate any requirements in the Government’s proposed new section 16A, which I am trying to nullify with amendment 73. I certainly hope that, given those settled wills, my amendment will be supported by the Government because anything else does not square with the manifesto on which we were elected and it certainly does not square with the manifesto on which the Labour party was elected either.