May Adjournment

Nic Dakin Excerpts
Thursday 3rd May 2018

(6 years ago)

Commons Chamber
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Ian Mearns Portrait Ian Mearns
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That is a concern. As well as my duties as Chair of the Backbench Business Committee and as a member of the Select Committee on Education, I am a member of several parliamentary trade union groups, including the Bakers, Food and Allied Workers Union, which, with the Health and Safety Executive, has been struggling to get recognition for a condition known as baker’s asthma. I understand entirely the hon. Gentleman’s point. The HSE is working under great pressure to conduct the work that it must do.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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I join my hon. Friend in congratulating all those responsible for arranging Workers Memorial Day, including Councillor Tony Gosling in my area, who worked with the Scunthorpe Baptist church and Berkeley Junior School to hold a fantastic celebration of the work of trade unions in improving health and safety with their employers. The young people from Berkeley Junior School will take that message with them through their lives, and that will really transform health and safety in the future.

Ian Mearns Portrait Ian Mearns
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I entirely concur with my hon. Friend’s comments.

Workers Memorial Day is important, but it comes with a vital message. As we prepare to leave the European Union, when so much power will be handed back to Ministers, the protection of health and safety regulations and law is so much more important now than it has probably been for an awful long time.

Customs and Borders

Nic Dakin Excerpts
Thursday 26th April 2018

(6 years ago)

Commons Chamber
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Yvette Cooper Portrait Yvette Cooper
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A customs union should be at the heart of that free trade agreement. Whatever the trading or future partnership agreement should be with Europe ––and we clearly need a close, continuous trading arrangement––my argument is that, for the sake of manufacturing and of Northern Ireland, a customs union should be the central part of it. That is what is in our interests.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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My right hon. Friend is right when she says that small towns such as the ones that I represent—Bottesford, Kirton and Scunthorpe—voted to come out of Europe, but they did not vote to lose out when that happened, and they will be looking for an arrangement that makes sure they do not.

Yvette Cooper Portrait Yvette Cooper
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That is exactly right. They want a Brexit deal that is good for manufacturing, and to be honest, any deal that rejects a customs union is going to hit manufacturing across Britain.

Patient Transport Volunteer Drivers

Nic Dakin Excerpts
Monday 23rd April 2018

(6 years ago)

Commons Chamber
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Jamie Stone Portrait Jamie Stone
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The hon. Gentleman makes a sage point, which I will come to shortly. The issue is the taxation regime—it is a UK function, hence it being the peg on which I hang my hat—that applies to these drivers. I shall describe the problem. In 2011, the then Chancellor, George Osborne, set thresholds and payments for volunteer drivers that would not incur additional taxation over and above their PAYE. These rules, which still govern us today, were: a reimbursement of 45p per mile for the first 10,000 miles and of 25p per mile for any additional miles.

I shall work that into a typical example of a volunteer driver in my constituency. In my part of the world, it would be no surprise if a driver did as many as 50,000 miles a year—believe it or not—driving patients to and from their much-needed appointments. As I have said, he or she receives the higher rate of 45p for the first 10,000 miles and then the lower rate of 25p for the following 40,000 miles. As Members will understand, it does not take a financial genius to work out that the reimbursement for these higher mileages represents a net loss for the driver. It is for this reason that for far too long volunteer drivers have sadly been packing it in—giving it up. As I say, this is particularly worrying in constituencies such as mine where we have huge issues of distance, inclement weather and so on. Where a volunteer driver continues to drive and accept this taxation regime, just one 200-mile return trip a week will take them in a year up to the 10,000-mile point.

This was for a long time a big issue for me during my time as a Member of the Scottish Parliament, and every time I raised it in Holyrood with the Scottish Government, they would say—with truth on their side—“We’re sorry but this is a matter for Westminster”. I am here now—some might say by a dreadful accident of the electorate, but there we are—and it is precisely because it is a matter for Westminster that I raised it with the Leader of the House not very long ago. It is also the reason I applied for this debate—and now I have been lucky enough to be chosen to place the issue before Members tonight.

It would be easy for me to say to the Minister, “Will Her Majesty’s Government please go away and think about it?”, but I know from previous ministerial responses that he might well respond, “If the volunteer driver thinks he is losing money on this deal, he can always present his books to Her Majesty’s Revenue and Customs and say, ‘You’re being unfair to me’”. But let’s face it: how many volunteer drivers have such a detailed grasp of accountancy or the time to do that? It would take up too much of their time or be beyond their capabilities. They just want to get on with helping their friends and neighbours get the medical treatment they need.

I have instead a suggestion for the Treasury—if it chooses to take it apart, so be it, but I will argue my corner. It seems extraordinary that the 10,000-mile threshold and the rate of reimbursement have not been looked at since 2011, when George Osborne put in place the current arrangements; it was seven years ago. If nothing else, surely the time is now right for the matter to be revisited. One way forward would be to raise the threshold to, say, 15,000 miles—or another figure that Her Majesty’s Government might suggest. The beauty of this is that, while it could be argued that other drivers—for instance, employees using their own cars for business, which is governed by the same taxation law—might be tempted, in a bad world, to incur extra mileage to ramp up their income, a simple change in taxation rules to recognise the specific and special role of NHS volunteer drivers would be a safeguard and could easily be written into law.

Sticking to volunteer drivers, some have expressed the fear that increasing the threshold might encourage NHS drivers in urban areas, or perhaps in the home counties of England, to up their mileage to cash in, but there are only so many working hours in a day and one can only drive for so long in a day. As a highlander who has come down to these strangely populated parts of England, I have discovered it can take an awfully long time to travel from A to B, even when the mileage is comparatively short, owing to urban hold-ups and so on.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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There are lessons to be learnt from northern Lincolnshire, where Thames Ambulance Service Ltd took over the contract and changed the arrangements for rewarding volunteer drivers, as a result of which the whole contract became very difficult to run. I congratulate the new chief executive on changing the arrangements again, as a result of which volunteer drivers are now coming back. As the hon. Gentleman has said, they make a big contribution to the health service, and they need to be properly remunerated.

Jamie Stone Portrait Jamie Stone
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I thank the hon. Gentleman for his intervention, which was thoughtful and to the point. Ultimately, however, whether the matter is devolved or reserved, I am left with the problem of trying to help people whom I know and love to reach hospitals and medical centres so that they can be given the treatment that they need.

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

Nic Dakin Excerpts
Thursday 1st February 2018

(6 years, 3 months ago)

Public Bill Committees
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I will briefly refer to the testimony of Mr Joel Blackwell of the Hansard Society to the Committee regarding clause 51. He stressed that a sunset clause amendment was suitable, that the clause’s powers are not required to be used in perpetuity, and that similar sunset clauses to those included in clauses 7 to 9 of the European Union (Withdrawal) Bill would bring consistency and thus make “perfect sense”. He supported the view of the Lords Committee.
Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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Is it not important that the Government take account of the evidence we have had from the Hansard Society supporting protections from whoever happens to be in Government in the future?

Jonathan Reynolds Portrait Jonathan Reynolds
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I firmly agree. Members on both sides of the Committee have referred to the testimony the Hansard Society gave in the evidence sessions. It is not just the Opposition who have concerns. I would very much like to be a real, not shadow, Treasury Minister one day. Even then, we would require the proper checks and balances to be in place. It still seems counter-intuitive to include time limits in the overall European Union (Withdrawal) Bill but not in today’s Bill, when the principles we have established apply similarly to both. As with our other arguments on sunset clauses, we do not see how the Government can justify the use of the powers in the clause in perpetuity. We have established that that should not happen, and the Government have not yet been able to refute that case.

I emphasise again that we all have a duty to check the powers of the Executive and to ensure that we do not allow them to change the balance of power permanently in their favour. The time period of two years should be generous enough to fill any gap in provisions that may come about from the end of delegated powers through other channels. Sunset clauses provide a vital check on delegated powers, and I urge members on both sides of the Committee to support the amendment to help to mitigate the constitutional risks introduced by the Bill.

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Peter Dowd Portrait Peter Dowd
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I was trying to show that in this case there is a requirement for a sunset clause. It is absolutely crucial that we have sunset clauses and I am trying to show—I know that you will appreciate this, Mrs Main—that they are capable of being delivered.

Nic Dakin Portrait Nic Dakin
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Is not having a sunset clause in place definite evidence of Parliament taking back control, not just now but into the future?

Peter Dowd Portrait Peter Dowd
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That is spot on. We have raised that issue time after time. Having sunset clauses and taking control back is a sign of a confident Government who are strong and stable and know their direction of travel. That is why I am sure that every Government Member of the Committee will support the amendment’s specific proposal for a sunset clause.

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

Nic Dakin Excerpts
Thursday 1st February 2018

(6 years, 3 months ago)

Public Bill Committees
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Kirsty Blackman Portrait Kirsty Blackman
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Absolutely. For a number of businesses, particularly those that are quite small and do a lot of exporting and importing, VAT is a major part of their costs and they have to deal with that on a regular basis. There would be a disproportionate impact particularly on smaller businesses were there to be changes without sufficient notice.

The effect of amendment 95 would be to ensure that the UK Government do not exclude aspects of the UK’s participating in the EU VAT area or in the EU’s principal VAT directive by delegated legislation. The amendment would ensure that there is more parliamentary scrutiny around any changes. We have been clear that we want more parliamentary scrutiny. The evidence sessions that we had were useful because we had people here talking about actual impacts on actual businesses and not just the impacts that the policy makers might think will take place. It was useful to learn about some of the technicalities.

We might have legislation and changes made in future by delegated legislation with no ability for us to have written and oral evidence and all of those people coming together to ensure that those of us in Parliament who make the laws are as well briefed as possible and able to make the best possible decisions. That is one of the most important things specifically in the area of VAT. I do not think many people in the House of Commons are expert in VAT. I am sure there are some, but not a huge number. We would have to be incredibly lucky to have all of them on a delegated legislation Committee and to have enough knowledge in the room to make reasonable decisions.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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That sounds like a fun Committee.

Kirsty Blackman Portrait Kirsty Blackman
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VAT is incredibly interesting and such a Committee would be an absolute hoot. The point is that there are not enough people in the House with enough knowledge on this subject, and there would be a massive benefit from not legislating in delegated legislation but in a situation in which we could properly take evidence and make the right decisions so that businesses were not disproportionately affected.

Amendment 96 and new clause 12 would apply a super-affirmative procedure in relation to the VAT issues that I have discussed. As I have said, we would benefit from having more parliamentary scrutiny of these issues. Any changes of any sort, as mentioned by the hon. Member for Oxford East, have a significant impact on businesses. They are a significant proportion of costs and other matters that businesses have to think about. A super-affirmative procedure would mean more scrutiny and that better law is made.

This is not about the Opposition wanting to have a go at the Government. It is about making sure we have the most workable possible laws in place and making sure that with all the stuff that is happening around Brexit, with the possibilities of leaving the customs union and the single market, and with all the possible changes that are coming through, having better scrutiny over what is happening in relation to VAT would be incredibly helpful. Businesses would have more comfort that better rules would be made and that they would not be hit with massive negative changes in how they have to deal with VAT, as well as having to contend with leaving the single market and the customs union and all of the other things that they currently have to contend with.

The two different areas that I have talked about relate to the Trade Remedies Authority, subsidies and countervailing measures, dumping, all the trade remedies and VAT. I think we should have more parliamentary scrutiny of those things. The amendments all attempt to make sure we have better law that means businesses can cope better with whatever the future throws at them.

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

Nic Dakin Excerpts
Thursday 25th January 2018

(6 years, 3 months ago)

Public Bill Committees
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Peter Dowd Portrait Peter Dowd
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The Opposition believe that, just as changes to tax are brought in in the form of a money Bill, so should changes to tariffs and customs duty. That is practical, reasonable and very responsible, if I may say so. We are not suggesting that there should be a vote every time that a tariff is raised or lowered; instead we envisage the Government regularly introducing to Parliament a list of changes for Members to scrutinise and vote on.

The alternative to a democratic and open process is the hoarding of power in the Treasury or the Department for International Trade, which alone will set the UK’s future customs tariffs. The workings and logic behind their decisions will be largely unknown, and hidden from the scrutiny of the House. That is the theme of our amendments with regard to the Select Committees. The Minister says that Select Committees will be able to bring the Minister in, question them and have a chat with them, but I am afraid that is not strong enough.

This is the biggest constitutional change we have had for as long as anyone can remember, and it is incumbent on us to ensure that when we have major shifts in power between the Executive and the Commons, we can challenge them. I think a confident Government would acknowledge that. I would not use the word “concede”, but I think a Government, who were confident in their own abilities—

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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Strong and stable.

Peter Dowd Portrait Peter Dowd
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I refuse to use the phrase “strong and stable”, but if the Government had confidence in their policies, they would not shy away, in any way, from the proposals that we have set out. I am interested to hear what the Minister says about them. In the oral evidence sessions, several witnesses expressed concern, and were reluctant to agree that the lines of communication between businesses, between organisations, between agencies and so on were conducive to getting a proper hearing. I think Members most probably got that message from the witnesses. Communication lines are there, but in a sense no one is at home; that is certainly the perception that I got.

Customs tariffs will be unamendable and unchangeable except, in effect, at the whims of the Chancellor and a Trade Secretary. It may well be that those individual Ministers are very open to dialogue and persuasion, and are in listening mode. Then again, they might not be, and this Parliament has always challenged the whim of whoever might be in power. [Interruption.]

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Mel Stride Portrait Mel Stride
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It is a pleasure to serve under your chairmanship, Mrs Main. I thank the hon. Member for Bootle for his remarks. His usual brilliance was enhanced by an unknown quality of being able to summon dramatic music to enhance his comments. He gets better and better, the longer we hear from him.

The hon. Gentleman raised various general points, including the fact that this is, in effect, a Finance Bill and therefore will not be amended in the House of Lords. There are good reasons for that. There is a very, very long tradition for Bills that relate substantially to tax and the rating of charges to be handled in that way—both by this Government and by Labour, when it was in government.

Nic Dakin Portrait Nic Dakin
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But the Bill does go into the House of Lords, and I am sure that the Government will be listening carefully to what their lordships say.

Mel Stride Portrait Mel Stride
- Hansard - - - Excerpts

The Government of course listen to everybody who has an opinion—or, should I say, a relevant opinion; a rational opinion, even—on the matter in hand, and we will continue to do so.

The hon. Member for Bootle raised the obvious and important point that with Brexit in the round, we are looking at a big constitutional change—I think that was the expression he used—which is undoubtedly true. However, he seized on that known fact to suggest that in the narrow case of the change in the duties on specific goods, we should therefore have a highly augmented level of scrutiny. I do not think that the two things are linked. The Bill deals narrowly with duties, and more robust scrutiny is suggested through the affirmative statutory instruments for the first introduction of the tariff and for all duties that are changed in an upward direction afterwards. He stated that there will be a huge change, but the Bill’s purpose is to narrow down that change wherever we can, not least regarding our tariff arrangements.

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As far as we are concerned, as we leave the European Union and undertake free trade agreements with countries all over the world, we want to avoid situations where arrangements do not work—a situation that could see the UK Government negotiate a free trade agreement with America, with part of the agreement being a preferential rate being given to US machine parts entering the UK. While the Treasury may see the economic benefits of businesses being able to access cheaper machine parts, in that scenario it does not take the consideration of UK machine part suppliers into account. The UK machine part suppliers are then undercut by the flooding of cheap machine parts from the US. That in turn would lead to job losses, and the loss of a whole industry and all the knowledge and skills that go with it. We have seen so much of that over the past three decades, and the Bill potentially makes the situation worse.
Nic Dakin Portrait Nic Dakin
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Does my hon. Friend think that, in line with the Government’s industrial strategy, it would be a missed opportunity if we end up hollowing out UK industry in the way that he describes, rather than securing its future as we all wish to do?

Peter Dowd Portrait Peter Dowd
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My hon. Friend makes a very important point. There is a danger that we are walking into this with a bit of a fuzz around us. We just do not know the impact this will have on us. If the Government do not get it right, as in spot-on, it is potentially very dangerous for our industries. That is why we are concerned, which is another of our themes in relation to the Bill: one is about democratic accountability, and the other is about how the Bill will protect our vital industries, from manufacturing right the way through the whole ream.

The scenario I referred to earlier is far from absurd and reflects the reality that, when it comes to negotiating and signing free trade agreements, there are always winners and losers, particularly when negotiating with countries that are larger both in population and economic size.

The free trade agreement negotiated between Australia and the United States in 2004 was negotiated in a relatively quick period, and it was so bad that officials refused to recommend it to the Australian Parliament. John Howard, the then Prime Minister, was forced into signing it by President George W. Bush, who essentially reminded him of the close security collaboration between the two countries. After signing, John Howard was often and repeatedly chided by political opponents who would shout, “Where’s the beef?”—a reference to the failure of the free trade agreement to stimulate beef exports for Australia.

We do not want to be in that situation. The UK could easily find itself in a similar scenario whereby we will offer preferential rates to the USA or China, with little in return. In November, we had Wilbur Ross, the US Commerce Secretary, saying that the UK retaining EU regulations on chemicals, genetically modified crops and food safety would represent “landmines” for a potential deal. The Secretary of State for International Trade is reported to have given him private assurances that this would not be a problem.

Stakeholders could find themselves shut out of the process. The Opposition’s concerns are not scaremongering, particularly when we have a Secretary of State who has already made it clear that he supports a race to the bottom, with cheaper consumer goods and weaker regulations and standards. Again, our witnesses spoke about how it is not consumer against producer—the two are almost interchangeable. If we look at the trade remedies outlined in the Bill, we see the Government have ensured there is a clear economic interest test for the Treasury to follow that does not consider the interests of UK manufacturers or key industries, which is unique among most World Trade Organisation countries.

If this Bill and the Trade Bill remain unamended, the Treasury will have to take the advice only of the Secretary of State in that regard, but it will receive a recommendation from a Trade Remedies Authority that will be appointed by the Secretary of State and no doubt made up only of people he trusts—that does not mean that anyone else does—unless its composition is amended in the Trade Bill. We saw that only yesterday, with a vote in the House of Commons in relation to the Electoral Commission. Parliament is entitled to express a view on such appointments, but in this case I do not think we will get that capacity. It certainly does not seem to be in the Bill. Key stakeholders will therefore bear the brunt of any changes to tariffs and again effectively be shut out of the process.

Those key stakeholders will be at the mercy of a Secretary of State who appears to be desperately attempting to negotiate free trade agreements at any cost and potentially to pay a price that most of us would not be prepared to pay. If hon. Members do not have the ability to challenge it, the Treasury will also have a free hand to introduce regulations that will set the framework for the lowering of tariffs which, if we are not careful, will change the UK economy as we know it. I exhort the Committee to think carefully on the proposals in the Bill and to take into account what we say in our new clause.

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

Nic Dakin Excerpts
Mel Stride Portrait Mel Stride
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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 Portrait Nic Dakin (Scunthorpe) (Lab)
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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 Portrait Mel Stride
- Hansard - - - Excerpts

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 Portrait Nic Dakin
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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 Portrait Jonathan Reynolds
- Hansard - - - Excerpts

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 Portrait Nic Dakin
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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 Portrait Jonathan Reynolds
- Hansard - - - Excerpts

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 Portrait Kirsty Blackman
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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 Portrait Nic Dakin
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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 (First sitting)

Nic Dakin Excerpts
Tuesday 23rd January 2018

(6 years, 3 months ago)

Public Bill Committees
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Emma Hardy Portrait Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
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Good morning—it is nice to see you all here. Earlier this week, the director general of the CBI said that the UK should seek to negotiate a comprehensive customs union with the EU. Having listened to all the complications that you have just outlined, would you support that proposal?

William Bain: The BRC is less concerned at this stage with the means of delivering frictionless and tariff-free trade with the EU, but what we do see is the overwhelming priority of the Government to focus on securing that. Our biggest market is the European Union, and it is likely to remain so for many decades to come.

To put it into perspective, our members say that 79% of food imports come from the European Union. That shows the sensitivity of sourcing contracts and supply contracts. For example, some retailers offer ready meals with cheddar from the Republic of Ireland in them, so it is used as an ingredient in products. If we do not get a deal that ensures tariff-free trade with the EU, the tariff on Irish cheddar is 44.5%. On beef from Ireland, it is 38.9%. On Dutch tomatoes, it is nearly 29%. That will have a serious impact on consumers, which is why we have said that, above all, by whatever mechanism they achieve it, the Government should aim for frictionless trade and zero-tariff trade with the European Union. Otherwise, consumers will face a big hit to their living standards.

Anastassia Beliakova: The same principle of having as little friction as possible in future trade with the EU is, of course, very critical for our members. On the specific question of the customs union, we are currently surveying our members—literally as we speak, or at least in the next few days—so, as and when those results are available, I will be very happy to share them with the Committee.

Peter MacSwiney: All the efforts over the last few years have been to remove bureaucracy. SITPRO made it its mission in life to try and simplify trade, and now we are introducing an inhibition to trade in the form of a customs entry. Taking what William said, of course duty plays a part, but even if there is a duty-free element you still have to do a customs entry, and it is hard to see where the benefit of that is. So, I would say that some form of customs union would be useful and beneficial.

Gordon Tutt: From a systems point of view—obviously, we are a vested interest here—the more declarations that are done, the more money for our members. That is why we take a very neutral position on this. But clearly, as my colleagues have said, there are a whole range of issues here, particularly in the movement of goods, which traditionally posed no threat. That goes in both directions—both into the UK and leaving the UK. We need to find a mechanism to allow those goods to move freely, without hindrance and without additional cost to trade.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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Q Can I follow up Kirsty Blackman’s question about statutory instruments? Is it helpful or unhelpful to business confidence, including the confidence of your members, that so much of the detail—some people estimate that there will need to be about 1,500 statutory instruments—is left to secondary legislation? Is that helpful or unhelpful to business confidence?

Gordon Tutt: Having experienced some of the European legislation in recent years, particularly the way the UCC was written, I do not see that the current UK proposal is any more onerous than what we have seen coming out of Brussels—in fact, in some ways it is a lot clearer. And we do have the confidence here in the UK; again, I can only speak on behalf of my members. We have a very good rapport with customs and with other Government agencies, in that we can actually discuss the detail and get clear understanding, and intervention where it is necessary. So, I am not unduly concerned with what is being proposed.

Peter MacSwiney: I think of the point we made earlier. As Gordon has just said, the engagement is good but the timescales are not.

William Bain: The key point, Mr Dakin, is that obviously companies want to know what the impact on them and the wider industry will be. Having legislation with an impact assessment is very helpful, in being able to explore the pinch points—whether on customs, VAT or the staffing implications. The retail industry wants to see this legislation as early as possible, and to engage with Government about it. We know that this legislation is not amendable in this House or in the House of Lords, so it is even more important that industry has a very strong engagement with it at the earliest opportunity.

Nic Dakin Portrait Nic Dakin
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Q What role could trade associations—as in chambers of commerce—play in facilitating overall custom co-ordination, both with the EU and more broadly? What are the opportunities?

Anastassia Beliakova: We already provide a lot of advice to businesses when it comes to trade. That is due to our role in trade facilitation with certificates of origin, but we also help with any queries that companies have regarding compliance with origin or local regulations in other markets. We also support businesses with any questions regarding taxation.

We hear from our members that they want to know what they should be preparing for. At the moment, the kind of guidance that we can provide is not prescriptive. It is more, “These are the various areas that you could consider”. One of them, of course, is VAT; another is origin declaration; and a third one is various rules of origin and existing trade agreements that the UK has by its membership of the EU. But because businesses don’t know what they don’t know, and we are working between assuming that everything will continue as it is and anticipating further changes, we would like to work even more closely with HMRC and Government more widely to provide support as and when changes become clear.

Peter MacSwiney: The current infrastructure is good. The Joint Customs Consultative Committee and the sub-groups are a decent forum. We are all members of one or more of those groups, and that works pretty well. I would like to see more engagement from the Border Force with the end user. It seems to be more focused on intergovernmental negotiations and discussions, rather than coming out to the wider trade.

Gordon Tutt: Most trade associations attending the JCCC are also, through either their own trade associations or affiliate trade associations, part of the trade contact group that discusses arrangements with TAXUD—the taxation and customs union directorate-general—for customs legislation in the EU. We are working closely with our European trade associations to try to ensure that there is a commonality in approach, to avoid unnecessary disruption to trade both from the UK and from the EU.

William Bain: The practical benefit is the experience across different industries and sectors in dealing with the movement of goods and services and being able to identify the potential difficulties with compliance.

One further point on the movement of goods is that at the moment there are 30 separate Government agencies that deal with this process. We are not expecting the Government to rationalise those or shuffle them in some way, but we would urge that the level of integration and co-operation between them should increase as we move towards Brexit day and, if there is a transitional period, any expiry of it, because dealing with 30 separate agencies is onerous for business.

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None Portrait The Chair
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We have a little over 10 minutes to go and three people to ask any further questions.

Nic Dakin Portrait Nic Dakin
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Q In sectors like steel that operate pretty much in a free market without tariffs, trade defence instruments are very important in ensuring fair trade. What do you think about the UK’s proposed system of public and economic interest tests? How do they compare with elsewhere? To me, at first glance, they seem more cumbersome than what is already there, and therefore there might be higher risk, but I am interested in your views.

Sue Davies: We think it absolutely critical that we have the economic interest test. We completely recognise that there will be cases where we need to consider whether we put remedies in place, but it is really important that when the decision is made to do that, there has also been a full assessment of what the impact would be ultimately on the end consumers. As some of the products or sectors that have involved remedies up to now have often been inputs or intermediaries into other sectors, which will then feed through to consumers, we need to ensure that we are looking at what the short-term impacts could be while also thinking longer term. We were really pleased to see the economic impact test referred to. We think it could be more explicit about the public interest side and the need for a consumer impact assessment, but otherwise we could be going down an unnecessarily protectionist route that could have consequences we are not sure about, because remedies can remain in place for quite a while.

Correspondingly, I appreciate that you are not considering the Trade Bill, but we think that the composition of the Trade Remedies Authority, which will be included in the Trade Bill, and the way that it operates, are also critical, so that we ensure it is transparent and includes consumer interest—for example, consumer representation on its board—so that when it is looking at the need for remedies we all understand exactly how it has traded off those different interests. But we think it would be simplistic and potentially damaging to consumers if we do not have the test in the Bill.

Nic Dakin Portrait Nic Dakin
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Q There are four tests here—four different checks. That seems to me to be potentially over-checking. There needs to be a test, but do there need to be four tests?

Sue Davies: We have the economic significance of affected industries and consumers and the likely impact on affected industries and consumers, which enable a wider public policy consideration. For example, there have been remedies in everything from salmon to solar panels in the past. We have got the likely impact on particular geographical areas, which is about regional aspects, and the likely consequences on the competitive environment. So there is a wider competition check, and that is where it will be important to make sure that the Competition and Markets Authority is consulted.

We think the criteria are right. It is how it is done. At the moment it says, “They can take account of the following so far as relevant,” whereas we think it is really important that there is a transparent impact assessment, so we think the wording there could be clearer about how it is doing that modelling in assessing the impact. We felt that the criteria seemed sensible.

Barbara Scott: What also needs to be in there is perhaps timings. At the moment, when we have trade remedies under the EU legislation, it takes an inordinate amount of time to put them in place. If we can have something in our legislation that is timeframed and more clear, with a shorter timeframe, that will be a big plus.

Kirsty Blackman Portrait Kirsty Blackman
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Q My question is specifically for Barbara Scott on the issue of HMRC resourcing. Is the authorised economic operator system working as it should, and will it work post Brexit? Is there enough focus within Border Force on customs issues, or does that need to change as well?

Barbara Scott: Currently, we have a bit of a divide between HMRC and Customs and how it operates processes such as economic operators, which Border Force does not come online with. No matter what we do to facilitate authorised economic operators—I detest that term—Border Force will still carry out the same controls whether a trade is authorised or not authorised. That really is something that discourages businesses from actually becoming an AEO.

There is a lot of talk about our not having a high number of AEOs in this country. That is because UK Customs has looked at trade facilitation as far as it can, and was quite facilitative to business before we even had an AEO system. For larger traders, there was a lot of facilitation allowed, whereas perhaps some other EU countries, particularly before the UCC, were not so facilitative and have used that AEO process to be more facilitative, which is why traders in, say, Germany have become authorised and in the UK they have not.

The benefits of AEO currently are very small, which is why I was pleased to see within this Bill that there are opportunities for having different levels of AEO. That could be a particular help to small businesses that cannot get over the extremely high bar that exists at the moment. Something that is smaller—a sort of bronze star for SMEs—might be better than the gold star that a multimillion-pound business can afford to obtain.

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

Nic Dakin Excerpts
Tuesday 23rd January 2018

(6 years, 3 months ago)

Public Bill Committees
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Mel Stride Portrait Mel Stride
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Q A final question to Rosa, which goes back to Mr Menzies’s question. What is the specific trade case you can cite where the application of the lesser duty rule has failed?

Rosa Crawford: I refer to the specific case about solar panels, and I am happy to provide more information. The trade remedies alliance has done additional research that we can supply to the Committee, so there is evidence that we can supply that it has not been effective.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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Q On the lesser duty rule, as a result of things such as the steel crisis, the EU is moving to be exception-based, in line with Canada, Australia and others. Is there a lesser duty rule anywhere else in the world that will operate like this one?

Ben Richards: Not that I am aware of, and I think that what happened with that steel crisis is one of the reasons our members do not have confidence in what is in the Bill at the moment. Even with the reservations that we have about the way EU trade remedies worked, as Kathleen spoke about, the EU was trying to deal with that situation. Unfortunately, our members felt that it was their own Government who were holding back the process of imposing sufficient remedies at a European level to deal with the situation of Chinese steel dumping.

Nic Dakin Portrait Nic Dakin
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Q Can I come to Kathleen? The lady from Which? did not actually refer to the lesser duty rule with respect to the Minister. She did refer to the economic test. Of course, everybody recognises that there should be an economic test, but there are a number of tests—public interest tests, and tests by various people. I noted that you, Kathleen, said that you were alarmed by the state of the current proposals. What needs to change in them to remove your alarm?

Kathleen Walker Shaw: The introduction of the economic interest test in itself, and then a further public interest test that the Secretary of State would then make a final decision on, is a confusion. First of all, the economic interest test is not defined clearly enough in our view, in terms of what it is assessing. The public interest test is just not defined at all. We have to assume that that would be an issue of national security, but a concern that we have about the economic interest test in terms of the procedure as laid out—it is still very vague in some of these areas—is that it would come before interim measures. If you are an industry that is suffering from anti-dumping, you do not want to be waiting for the conduction of an economic interest test—we still do not know the nuts and bolts of how that will happen—while somebody is roasting your fingers in an anti-dumping case. By the time you get to the interim measures, said British company may not be there any more. Having that where it is in the process is very flawed. Having it at all has a serious question mark over it, in terms of its broadness and definition. It is something that you cannot pin down.

Another concern that I have is the—

None Portrait The Chair
- Hansard -

Can I just ask that you keep it short? We have three more Members to get some questions in.

Kathleen Walker Shaw: Sorry. The lack of scrutiny, in terms of parliamentary process, over the economic and public interest elements of it is a huge worry to us regarding the Bill.

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Emma Hardy Portrait Emma Hardy
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Q Welcome. Could you discuss in more detail the proposals you have for sift and scrutiny committees to deal with the delegated legislation?

Joel Blackwell: Of course. At the moment, the Chair of the Procedure Committee, Charles Walker, has tabled amendments that would introduce a sifting mechanism for clauses 7, 8 and 9 of the European Union (Withdrawal) Bill, which means that for those SIs laden with those powers that are subject to the negative power, a new European statutory instruments Committee—in the House of Commons only at the moment—would have the ability to recommend an upgrade if it thinks it more appropriate that the negative should be subject to the affirmative procedure.

At the moment that is only a recommendation; the Government is not obliged to follow that recommendation, and we have concerns about that. We proposed in September our variation of a sifting committee, which would combine the sifting mechanism with Committee scrutiny. That is in keeping with what we call the strengthened scrutiny procedure, but many others call the super-affirmative procedure: if you see a power in a Bill that you think is extremely wide—particularly if it involves numerous policy areas and Government Departments—you would say, “The affirmative is probably not rigorous enough; we would like a more rigorous procedure than the affirmative.”

You would create what we call a strengthened scrutiny procedure, which is in essence Committee scrutiny work. It is not just sifting; sifting is one element of that super-affirmative, but it potentially involves the ability to table conditional amendments as a Committee, and the Government being obliged to listen to those recommendations. That was the Committee we wanted to see—a Committee with teeth. At the moment, we do not think the amendments tabled by the Chair of the Procedure Committee go very far, and we would like to see more amendments tabled to the Bill, particularly in the Lords, that would give that Committee more bite, in keeping with strengthened scrutiny procedures.

Nic Dakin Portrait Nic Dakin
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Q What is your view on the Henry VIII powers in this Bill and their impact on this area of legislation?

Joel Blackwell: It is a good question. Referring back to Ms Blackman’s question, I think all Henry VIII powers should be subject to the affirmative procedure unless the Government give a compelling reason, and we do not think that that has happened in the Delegated Powers Committee note. The six Henry VIII powers contained in this Bill are not as wide as clauses 7, 8 and 9 of the European Union (Withdrawal) Bill or the clauses we have seen in the Legislative and Regulatory Reform Act 2006 and the Public Bodies Act 2011. They are constrained merely by the fact that this Bill is focusing particularly on taxation, border trade, customs arrangements and what-have-you. So I think, in keeping with the views of the Delegated Powers Committee, that the affirmative procedure would be sufficient in this context.

However, parliamentarians, particularly in the House of Commons, have made it clear over the last few months that there are issues with the scrutiny of delegated legislation—more so than they have since we have been doing our research. In particular, there seems to be a view that they would like to have more meaningful and effective oversight over Brexit SIs. The sifting committee was intended to be part of that, but at the moment the sifting committee will only look at clauses 7,8 and 9 of the European Union (Withdrawal) Bill and will not touch the other Brexit-related Bills. If it is still the view of the House of Commons that they would like to look at all Brexit-related SIs then you could, for example, insert into Standing Orders that the new European statutory instruments Committee looks at clauses 42, 45, 47 and 51 of this Bill if it so wishes.

Mel Stride Portrait Mel Stride
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Q Thank you for your evidence. The negative SIs, on balance, given that they do not necessarily get “called in”, for want of a better expression, are on average scrutinised less than affirmative SIs, but is there anything that would in any circumstances stop an Opposition party calling one in? Is there any reason why they would be out of the reach of scrutiny, should the Opposition decide that more scrutiny was appropriate?

Joel Blackwell: A Member of either House who wants to pray against or seek to annul a negative instrument has to do so within a 40-day period. That is one of the restrictions: you have to do it within 40 days, otherwise you have the situation that arose with the personal independence payment regulations and the student fees regulations. The Opposition wanted to debate those regulations but the 40-day period had ended, so they used Opposition day debates in another Session. They had to hold the debates on “revoke” motions, and there was the issue of whether those would be statutorily binding if the Government were defeated. It turned out that the Government did not vote at that point. So there is that limit.

We think the negative procedure is fundamentally flawed, because in order to debate a negative SI, an MP has to use an early-day motion, for which no fixed time is allocated. That means that whether a negative instrument is debated is purely in the hands of the Government. We would like to see that changed. In “Taking Back Control”, we proposed that a new sift and scrutiny committee should be created, and that that power should be given to that committee. You would have to tweak Standing Orders to ensure that the debate was heard, but that is our view.

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Chris Davies Portrait Chris Davies
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Q If and when we set up free trade agreements with the rest of the world, will the ships come in and receive the same treatment as if one was coming from Europe at the moment?

Tim Reardon: It would depend on what the agreement said, but on the experience of ones that exist elsewhere, that is extremely unlikely. The effect of a free trade agreement tends to be to reduce, perhaps to zero, the customs duty that an importer has to pay. It tends not to make a material difference to the administrative process of getting that unit across the quay.

Richard Ballantyne: My members would be relatively calm about free trade agreements, actually. I thought when we had the vote, and in the time after, that a lot of ports would be getting concerned about potential tariffs on a lot of commodities. There are one or two high-profile exceptions where there are relatively high tariffs, such as the automobile trade—new cars and trade cars—but a lot of the trade and the ports are reporting that tariffs are relatively low. As, operationally, they are collected away from the border—they are not a condition of entry —they are not seen as a direct issue for port authorities. Obviously, if they have an impact on trade, ports will be interested.

Just to bring up a very general point, you may find it useful to know that roughly 500 million tonnes of freight is handled at UK ports. That is 95% of UK international trade. About 20% of that is roll-on, roll-off ferry traffic, which by definition and by its nature is overwhelmingly—99.5%, I think—with other EU ports. Then you have the container sector, which accounts for about 10% or 11% of tonnage and is probably about 70% from third-country sources—countries outside the EU. The other big area is bulk commodities—liquid bulks and dry bulks—which, from memory, account for about 40%.

Nic Dakin Portrait Nic Dakin
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Q When the Home Office had its e-border thing, it appeared to fail through lack of engagement with key partners. How much engagement have you had with HMRC on the new CDS system? Are you confident that it is getting to the right place?

Robert Windsor: I will take the lead on that, because the freight borders are heavily engaged in this. CDS has been an ongoing project for about three and a half years. Customs did quite a lot of research with industry on what its requirements were. They have been doing a development stage, which, I have to be honest, is highly technical and way beyond anything that I can understand, although software suppliers and the community service providers have been part of the technical workshops on it. They are now starting to talk directly to us and, as a trade association, we are receiving quarterly updates on the project. I really do not want to comment on whether we think it is going to succeed or be delivered on time, because at the moment it is still under development. Part of the problem that they have, which is not of the team’s making, is that some of the data elements are still to be defined within the Union customs code, such as the format of a unique consignment reference. That matter still needs to be resolved.

Richard Ballantyne: This is a technical area, and Robert and his colleagues will be concentrating on that, but all three of us sit on the Joint Customs Consultative Committee, which is HMRC’s main stakeholder committee, and there are opportunities to get briefings on CDS. I feel personally that if we want the information, it is there.

Tim Reardon: What I would say on CDS is that it is an importers and exporters system. As carriers, we have very little interface with it, but our engagement with Revenue and Customs has been constant and continual since the referendum result, when it became apparent that there was a significant new element of uncertainty about whether the 40% of the UK’s international trade that arrives and leaves in trucks on ferries was going to be able to continue doing as it did.

Richard Ballantyne: Yes, at a very general level, ports touch many Government Departments in terms of policy regulation, and of all the Departments, HMRC has been the most forthcoming since the referendum. The amount of engagement has been quite unprecedented. That is not necessarily to speak negatively about the other Departments, but HMRC has really taken the lead.

Peter Dowd Portrait Peter Dowd
- Hansard - - - Excerpts

Q I want to talk about the Joint Customs Consultative Committee. I understand that you are all members. How often has it been convened in the past year, for example? Are there any plans to increase the regularity of its meetings in the run-up to Brexit? What sorts of things have you been discussing at those meetings—maybe the last two or three, for example?

Robert Windsor: The Joint Customs Consultative Committee meets three times a year, and it covers areas of strategy that are impacting on importers, exporters, freight forwarders, shipping lines, whatever. Since Brexit, the JCCC has established sub-committees specifically dealing with Brexit as an issue and that group, if I remember correctly, meets about four times a year.

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Kirsty Blackman Portrait Kirsty Blackman
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Q The other one is about the trade remedies that are in place. On the trade remedies that we have by virtue of being a member of the EU, is it your view that they will definitely roll over and continue to be applicable, or is it your view that they might be challenged when the UK leaves the EU and is no longer part of that kind of conglomerate which has put those remedies in place? I have heard conflicting evidence and information about that.

Gareth Stace: Those remedies might well be challenged, in the sense that anyone can challenge anything, but that does not mean that they should not be rolled over. It is our firm view that the UK Government can roll over all the remedies that are applicable to the UK within World Trade Organisation rules, and we have set that out very clearly to the UK Government.

We have heard lawyers. I gave evidence to the International Trade Committee, and there was a lawyer saying that it could not happen, but when we explained it to her she thought, “Ah yes, actually it could happen.” We need to remember that if they could not roll over from the EU to the UK because the calculations were wrong, because it is just the UK and not the EU, they would also all be invalid in the EU, because they are based on 28 member states and there would be only 27. I think they can easily roll over and will then be reviewed when those cases expire after five years.

Dr Laura Cohen: In our association, we appreciate the way in which the Department for International Trade is going about the consultation at the moment, just checking UK interest. Certainly, we are gathering evidence from our members on tiles and tableware, but the consultation is also forcing us to check the three or four other sectors where we think there could be some UK manufacturing interest. That is particularly in the technical ceramics and refractory areas, which are quite diverse and complex, and we need to take enough time to explore those properly.

Nic Dakin Portrait Nic Dakin
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Q How does the UK’s proposed system of public and economic interest tests compare with elsewhere, and are you happy about the proposals as they currently are?

Dr Laura Cohen: I want to explain that the EU uses a Union interest test as a sanity check, to balance the possible conflicting interests of member states. The wording of the rules around that test are crucial. For example, in the tiles renewal that I just talked about, the Official Journal text says:

“In weighing and balancing the competing interests, the Commission gave special consideration to the need to eliminate the trade distorting effects of injurious dumping and to restore effective competition.”

It is essential, if the UK is doing that sort of test, that such clarity of purpose is in the Bill that you are considering. It is not at present.

I would argue, as my colleagues said earlier, that addressing dumping is always in the long-term consumer interest because it restores a competitive market. We would expect the Competition and Markets Authority to take strong action if UK companies were not playing by the rules. In the absence of international competition laws, strong trade remedies are the best we have. The EU is only one of five countries or areas out of 32 main anti-dumping users in using that type of test. In Brazil and Canada, it is a conditional test used in certain circumstances only.

What is the UK proposing? First, I want to state that the WTO does not require a public interest test. It appears in the Bill as if the UK is proposing something very new to replace the Union test. That seems to run counter to the principle that global free trade cannot mean trade without rules. As some of the previous witnesses said, three opportunities are provided to stop remedies against rule breakers. The text in the Bill suggests the three stages, the first of which is an economic interest test by the TRA. The research commissioned by the Department for International Trade strongly hints that that may contain a cost-benefit analysis and/or an economic model. No other country uses that approach. The USA tried it and stopped. The Union interest test is just a sanity check. Secondly, if the Secretary of State does not like the result by the TRA, he or she may overrule it with their own economic interest test. Finally, that may be overruled again by the Secretary of State’s public interest test. A recent article in The Telegraph—we can provide a link if the Committee wishes—alluded to the implications of a potential UK-China free trade agreement and inward investment being weighed up in such a test. If true, that would be highly alarming.

Those second and third tests are not carried out in the EU. They add a lot of uncertainty to the process, particularly with a very unclear presumption at present in favour of adoption of duties in the Bill text. No wonder some UK manufacturers are scared witless by this. I think you heard similar emotion from the unions. Manufacturers have enough uncertainty around Brexit to cope with, without the fear that if they bring a case, despite dumping and injury being found there will be three chances for that ruling not to be implemented, and they might have all sorts of legal challenge. We heard this morning that the Bill is not even clear if we can do that.

Mel Stride Portrait Mel Stride
- Hansard - - - Excerpts

Q Thank you very much. It is very good to see you again—I know we had a very recent meeting, Laura. Just for clarity, because I do not know whether this suggestion was being made or not, from the Government’s point of view we do not equate sensible, proportionate trade remedies with protectionism at all. We see the value of those, just as everybody else on the Committee, and indeed yourselves, does.

Can I just go into the area of the lesser duty rule in a little more detail? To the extent that the lesser duty rule functions as proposed, and it does provide remedy for injury caused through dumping to those producers who have been affected, why would you want to go further than that in terms of a potential remedy? Why would you want to go beyond that particular threshold? The argument from consumer groups is that that will then start disproportionately to damage consumers and those businesses that use those imports within their own production processes.

Dr Laura Cohen: I am going to let Gareth answer first. Then I will come back and refer to what the unions were talking about; I have some evidence from the alliance.

Gareth Stace: It seems that we are constraining ourselves in the UK when we do not need to. One of the aims of Brexit was to strip things away, make things more simple and have fewer people employed working on these things; much of what we have seen in both Bills seems to add layer upon layer that is probably not needed. The lesser duty rule is used quite a lot in various different regimes, but it is not used in the US at all. We want to create strong links with the US in terms of trade, so that seems a bit odd.

We could say yes, but I could not tell you that if we did not have the lesser duty rule, we would have seen less dumping in recent years. The lesser duty rule has not meant that new cases did not stop dumping. The point I would like to make is this: we are always told that the lesser duty rule ensures that the consumer is not ripped off—that prices do not rise significantly because tariffs are imposed at too high a rate.

I have an example. In the hot rolled coil case recently—hot rolled flat is used for car bodies and washing bodies, but I am using the example of the car—the injury margin was 17.5% and the dumping margin was 29%. That is a difference of 11%. So the 17.5% was applied, not the 29%. If we think of a luxury car that cost €45,000, because this is a European example, if the lesser duty rule was not applied in this case, it would increase the value of the €45,000 car by €16. We are not suddenly going to see runaway costs and the poor old consumer having to pay lots and lots more. We are going to have a robust system that ensures that we have free liberalised trade continuing as a safety valve. In that case, it increases the cost by €16 on €45,000.

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Graham Stuart Portrait Graham Stuart
- Hansard - - - Excerpts

Q The TRA has that presumption in favour of imposing those duties. Do you welcome that in the Bill?

Dr Laura Cohen: All three tests should have that presumption.

Ian Cranshaw: The specific issue is the language: there is not that specific phrase. There is a presumption in favour of duties written into the Bill, and we would like to see that specifically written much clearer than it currently is. That would reassure many of our companies.

Nic Dakin Portrait Nic Dakin
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Q On timescale, is the current Bill likely to mean that things will take longer to get done than currently with the European regime, or will it make things quicker? I am sure that we want everything to be slicker and easier when we come out of the European Union.

Gareth Stace: The timescales are not set out clearly enough. I do not want to go over old ground, but the hoops to go through at all the different stages will only lengthen that process. I am sure that will happen, calculating injury and dumping, but if was just dumping, that would happen very quickly.

I might have said already that in the US, provisional measures come in after 45 days and in the EU they come after nine months, which is coming down to seven. The UK has the opportunity to say that we will do it at six months, and we always—unless there are circumstances where it is not appropriate—apply retrospective duties of three months. So you get provisional duties coming after three months, which sends a very strong message to the market: do not dump your illegally traded goods here in the UK.

Ian Cranshaw: I think we would all be disappointed if we could not expedite the EU system, when it has to canvass views across 28 member states. We would have to canvass views in just the UK, so if we cannot bring that nine months—soon to be seven months—down further, an opportunity will have been missed.

Dr Laura Cohen: There is a tremendous opportunity here for Brexit. If an industry is suffering injury and dumping, it is really important that it gets sorted out quickly.

Peter Dowd Portrait Peter Dowd
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Q What involvement have you had in your respective sectors with the Department for International Trade on the creation of any potential trade remedies in the Bill? We are expecting a Division shortly, so a short answer would be helpful.

Gareth Stace: From my point of view of steel, this time last year we had written five very detailed papers that DIT officials have been very pleased to receive. We have had very good engagement with them, so I could not actually fault that. We probably have had some difference of opinion, so although I heard, “We agree with 95% of what you are putting out,” I said, “That’s fine, but it’s the 5% that is crucial.” Like everything with Brexit, the issue is around that 5% and we do not understand the detail around that.

We continue to engage with DIT, but we have provided all the information we can; there is nothing more we can provide. That is why we are disappointed: in the face of this Bill in primary legislation, we have not seen the detail that the Government had the opportunity to put in.

Dr Laura Cohen: From our sectors, I echo what Gareth has said. As an association, we have had really good engagement with DIT officials. BCC has had four meetings as an association with Ministers or Secretaries of State in the past year. That is really appreciated. However, we have made our case very clearly and I do not know what else we can say. We need to ensure that businesses, investment and jobs get the best possible deal from Brexit.

Ian Cranshaw: As a group, we met Greg Hands. The Minister gave us a considerable amount of time. He had been briefed well and he understood our issues, but he just did not accept them—he had a different view. That is fine; we have to go away and refine our position and give the evidence that was required. Some of the evidence that he called on we would call less than proven.

We know that there was a discussion earlier about the make-up of the TRA and who helped formulate the Government view. They say that for the review on trade remedies they went to a very liberal think-tank and asked what the view is on this, so of course they got a very predictable response. We would have questioned whether they had taken in some of the advice and evidence from business, as they might have got a rounder view of what was required.

Gareth Stace: It was not a liberal think-tank, but a company that represents the Chinese steel sector against the EU. They could have chosen many; why did they choose that company?

Christmas Adjournment

Nic Dakin Excerpts
Thursday 21st December 2017

(6 years, 4 months ago)

Commons Chamber
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Karin Smyth Portrait Karin Smyth (Bristol South) (Lab)
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I did promise the House brevity, as I am aware that colleagues will want to return to their constituencies and families for Christmas and, indeed, to start some Christmas shopping—those of us who have not managed it. I spotted some Ministers in the House of Commons shop this morning, so I know we are all a little behind.

With the Prime Minister, the Defence Secretary, the Foreign Secretary, the Trade Secretary and the Business Secretary all in Poland, and with the First Secretary resigning, I wonder whether my opposite number, the Deputy Leader of the House, feels that he is here starring in the remake of “Home Alone” this Christmas. I enjoy working opposite him; he has been very supportive. I wish him well in his endeavours. I think the Government are in safe hands with him in the coming weeks.

Brexit is the biggest issue of our time, and it is right that we have concentrated so much of our time in this place on that subject. We have had over 64 hours of debate on the EU (Withdrawal) Bill. Over 300 amendments have been tabled and there have been 14 reports by 10 different Committees. There have been 43 votes in total, and we have won one—but a very important one. As many colleagues have said previously—you have endorsed this, Mr Speaker—it is crucial to the functioning of our parliamentary democracy that all Members vote according to their judgment of the best interests of their constituents. The outcome on amendment 7 has therefore been reassuring for all democrats.

I would never have thought that I would be pleased to be surrounded by so many eminent lawyers and scholars of “Erskine May” in the past few weeks, but it has been very interesting. I have found it quite a treat to witness colleagues pursue so ingeniously every legislative avenue to take back control to this place. I have learned a lot. I have learned about Humble Addresses, and I am now almost clear on the difference between a sectoral analysis and an impact assessment.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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You could make a lot of money out of that.

Karin Smyth Portrait Karin Smyth
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I could have done if I had chosen a different career.

We owe many right hon. and hon. Members who have pored over every detail of the Bill, their advisers, and, indeed, the Clerks of this House a huge debt of gratitude. I sincerely hope that they have some lighter reading over the Christmas period.

While we have been talking a lot about Brexit, Members have participated in debates on other really important subjects here and in Westminster Hall. We have heard from colleagues, particularly here, about the roll-out of universal credit, which has been discussed again this afternoon. This policy is having a huge impact on families struggling to make ends meet, whom we particularly think about over this Christmas period. All of us, regardless of party, have a huge number of constituents who are affected. I know that my colleagues will share a commitment to do all we can to help mitigate the impact of this when the House returns in the new year.

During this interesting debate, many hon. Members have raised issues close to their own hearts and their own constituencies. It has been a fairly sombre debate with so many important issues being raised. It has illustrated the fact that regardless of which side of the House we sit on, our constituents often face the same issues, and we do share work and support each other across the House to make things better for people.

We have heard from the hon. Member for Harrow East (Bob Blackman), my hon. Friend the Member for Keighley (John Grogan), the hon. Member for Mole Valley (Sir Paul Beresford), the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), the hon. Member for Beckenham (Bob Stewart), my hon. Friend the Member for Ealing Central and Acton (Dr Huq), the hon. Member for Southend West (Sir David Amess), my hon. Friend the Member for West Ham (Lyn Brown), the hon. Member for Mid Worcestershire (Nigel Huddleston), my hon. Friend the Member for Ilford South (Mike Gapes), the hon. Member for Edinburgh North and Leith (Deidre Brock), the hon. Member for Stafford (Jeremy Lefroy), my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), my right hon. Friend the Member for East Ham (Stephen Timms), my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), the hon. Member for Strangford (Jim Shannon), and finally—well volunteered—the hon. Member for Glasgow East (David Linden): they should have told you what you were letting yourself in for.

We have heard about a huge range of subjects. I did not know that it is the 50th anniversary of Crisis, which the hon. Member for Harrow East talked about. The theme of transport occupied my hon. Friends the Members for Keighley and for Ealing Central and Acton. My hon. Friend the Member for Keighley made an excellent point on behalf of sports fans, workers, shoppers and theatre-goers travelling on Boxing day. Like me, my hon. Friend the Member for Ealing Central and Acton is well advised on transport matters by a son who is very keen on these subjects. She made a good point about the impact of welcome infrastructure projects on her constituency with regard to HS2, and the importance of small businesses.

My hon. Friend the Member for West Ham again demonstrated the range of passionate campaigns that she has pursued in this place. She is held in huge respect across the House for that work. We heard about three of the campaigns that she will be pursuing. She has already managed to elicit some response from the Government Front Bench on that work.

I first heard my hon. Friend the Member for Ilford South speak at a Labour party event when I was a young child in the late 1980s—he talked about defence and international affairs and was hugely impressive. He is hugely knowledgeable on these subjects. Today he spoke, again with great passion, about British citizens here and abroad. Long may he continue to do so, on behalf of the people of Ilford South.

My hon. Friend the Member for Kingston upon Hull North is the embodiment of the phrase “must persevere”. I remember being here to hear the good news that she shared about the campaign in July, and I am shocked to hear that she has had to pursue the work down every single avenue. As she said eloquently, she will persist on behalf of those families.

My right hon. Friend the Member for East Ham—he is very knowledgeable, and I always listen attentively when he talks about these matters—raised some terrible accounts of activities that are going on in Plaistow jobcentre. I know that he will pursue the matter with Ministers.

My hon. Friend the Member for Mitcham and Morden reminded us of the production last year of her record, which we all very much enjoyed. She is pursuing relentlessly another Christmas campaign on behalf of homeless children, for whom she has been working so hard. She is another dedicated campaigner, who has been a constant source of good advice and support to me and to many other hon. Members.

I am sure everyone will join me in thanking all those across the country who, despite enormous pressure on local services, continue to work so hard over this period to provide the vital services that our communities need. To our servicemen and women, to those who keep our public places clean and to all public servants I express heartfelt thanks for all that they do. If I may, I would like to touch on my own constituency, Bristol South, and pay tribute to all the GP surgeries and to the staff at South Bristol Community Hospital, who will be providing vital care to people over this period.

In keeping with the Christmas tradition, let me say that the red, red robin keeps bob, bob, bobbing along, and I take this opportunity to say well done to Bristol City on their 2-1 win last night against Manchester United at Ashton Gate. Never have I met so many fans of not wanting Manchester United to win as I did in the Lobbies last night. I am not a regular football fan, although I enjoy going to the occasional game and watching. But I work very closely with the club, which is based in my constituency and which makes a huge contribution to the local community. We have heard about how many other football clubs across the country do similar work. Well done to Bristol City, and I hope that they have some rest over the period before the next game with Manchester City. It is a shame that the draw did not turn out differently, Mr Speaker, because I would have enjoyed welcoming you back to Bristol South to watch the game if Arsenal had been drawn.

I am looking forward to spending some family time in Bristol, and I am sure that my family will be pleased to see me. As the hon. Member for Mid Worcestershire said, this job is not easy, and our families support us very well. I hope that many hon. Members will have time with their families. I will be catching up with “The Crown”. I am a huge fan of the series, and I am hoping that I might be able to polish my accent a little bit by the end of it. I am hoping to catch up with “The Last Jedi”, which I have not seen yet. If any hon. Members have not seen “Paddington 2”, I would thoroughly recommend it. It carries some heart-warming messages about the importance of being an inclusive and caring society that we could all take away with us.

Bristolians will have the opportunity to visit my constituency to watch “Beauty and the Beast”, which is being performed in the Tobacco Factory theatre. It is a reminder that in the often cruel times in which we live, beauty and, indeed, beastliness are only skin deep. On that note, I wish all my colleagues, and colleagues from across the House, a safe, happy and peaceful Christmas. I look forward to continuing to work with them all in the new year and, of course, welcoming in a new Labour Government.