Taxation (Post-transition Period) (Ways and Means)

Patrick Grady Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Jesse Norman]

I admire the hon. Gentleman’s ingenuity in bringing this matter into a debate that has no direct relevance to that issue at all. I, like him, would like to see as green and sustainable a world as we can arrange. This is a measure that does not relate to kerosene; it relates to avgas, and it has to do with the need to harmonise—or rather, to manage—the relationship between Northern Ireland and the UK, and that is what we are seeking to do. The requirement for an increase is set out in the Northern Ireland protocol—again, it relates only to Northern Ireland—but we are expanding it to the whole of the UK to ensure consistency, to avoid burdens on business, and to reduce compliance risks for Her Majesty’s Revenue and Customs. It is extremely small in its magnitude.

The Bill will also make provision for the introduction of a new system for collecting VAT on goods entering the UK. This includes moving the VAT collection on certain imported goods away from the border, and removing the VAT relief on low-value consignments. Together, these provisions will help to level the playing field for UK businesses, and they will protect the UK high street from VAT-free imports. The Bill will also take forward measures to ensure that the Government retain their ability to prevent insurance-premium tax avoidance after the end of the transition period. This will provide Her Majesty’s Revenue and Customs with access to the same tools to prevent insurance- premium tax evasion—sorry, I should have said “evasion” rather than “avoidance” earlier—regardless of whether or not an insurer is based in an EU member state.

Finally, the Bill will make provision for new powers that will enable HMRC to raise tax charges under the controlled foreign companies legislation for the period from 2013 to 2018. This technical provision will deal effectively and efficiently with the legacy state aid decision relating to the period before the UK left the European Union.

[Patrick Grady (Glasgow North) (SNP)]

I wonder why, if the Bill is so technical and dry, and does not have much relevance to the statements that the Chancellor of the Duchy of Lancaster is making outside the House, we cannot see a copy. Why do we have to listen to the Minister tell us all about it, but none of his hon. Friends or my colleagues on this side of the House can prepare properly to respond?

[Jesse Norman]

I thank the hon. Gentleman. What I am actually doing is giving him a preview of a Bill that will be published in the normal way, after the resolutions debate has concluded. This is a debate on the resolutions required to lay the Bill, and we will do so as soon as the debate has concluded and the measures have been voted on. At that point, he will have a chance to see the Bill and its details.

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[Alison Thewliss]

I would prefer it if the Government would listen to the concerns of west coast fisheries in Scotland that do not want their fish to die and rot in lorries at Dover because the Government have not sorted out the trading customs.

Members of the House are expected to scrutinise the new tax regime in a fast-tracked timetable with no time for debate or consultation with businesses. There are a host of details in the VAT resolutions. I went through them this morning. I copied them and pasted them, and took them from the VAT regulations that currently exist. That runs to some 20 pages of detail on those VAT resolutions. [Interruption.] I can see the hon. Member for Thirsk and Malton waiting for me to read through those 20 pages, but I am not going to do that. I will send him a copy if he would like to read it over later. We will certainly be further forward than we are with the Government concluding anything.

There is a lot of detail in the resolutions and we need to know what exactly is going to happen with them.  There are issues on penalties relating to VAT in the Taxation (Cross-border Trade) Act 2018. There are issues to do with the importing of goods as well, and how that is going to work. The guidance on the resolution

“Value added tax (online sales by overseas persons and low value importations)

That provision may be made for the purposes of value added tax in cases involving—

(a) supplies of goods by persons established outside the United Kingdom that are facilitated by online marketplaces, or

(b) the importation into the United Kingdom of goods of a low value.”

runs to 11 pages on the UK Government’s website. There are 11 pages of detail, but we do not know what the Government are proposing to change here. We do not know what the Government are proposing to do here and that is very unfortunate. The issue really does follow on from that: we do not know what the Government are going to do and we do not have adequate time to scrutinise all the papers and see what is in them. We do not know whether the Government’s drafting will actually work, when it has been done in such haste.

[Patrick Grady]

My hon. Friend is providing a ray of sunshine in between the dark clouds of the Maastricht rebels who are featuring so heavily on today’s call list. Is it not the case that it is not just us and the Opposition who do not know what is going on? Clearly, the Government do not know what is going on either. The Bill has not been published because there is a massive copy-and-paste job going on somewhere in Her Majesty’s Treasury right now, so that they can have it ready. That is probably why we are going to be speaking until 7 pm—they will need that length of time to get the thing finalised, printed and in the Vote Office.

[Alison Thewliss]

My hon. Friend is absolutely right. Perhaps I should send the Minister my copy-and-paste job from earlier and that would help him out.

But this really matters. The right hon. Member for East Antrim (Sammy Wilson) talked earlier about people, supermarkets, food arriving and places, and what the impact will be. The Road Haulage Association’s director, Martin Reid, has warned:

“Regardless of whether there is a deal or not, there will still be customs requirements and it’s the customs requirements that will cause the delays. Those delays could run on for at least the first quarter”

of next year. The post-transition situation will be chaotic and that will be devastating for business, particularly the way the Government are going about it. Further to that, speaking to The Press and Journal, Mr Reid said the fact that issues still remain to be resolved is shocking:

“The hauliers’ handbook that they produced contains links that take you nowhere, so we’re nowhere near the level of information that is required basically. For goods moving to Ireland, we are still not 100% sure what it’s going to look like; as for moving through the short straits, we still have a great deal of concern as to the government’s capability either to have the right people in place.”

Nothing the Minister has said this afternoon—or indeed, the scuttling that is going on, on the Government Front Bench just now—gives us any reassurance as to what is going to happen.

Business bodies in Northern Ireland’s legislative committees have expressed concern about potential compliance costs for the future operation of VAT and excise, and nobody knows what it is going to look like. Businesses and farmers in Northern Ireland have been clear that they are not ready for a no-deal scenario. They have said it will place them under unbearable and unnecessary strain. The UK Government are providing no technical detail and very little guidance to those businesses. As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) pointed out so well earlier on, the IT system to support all of that just is not there. We heard similar evidence to the Treasury Committee. Businesses have begged the UK Government to reach an agreement, but the UK Government have indulged in bad faith negotiating at every turn.

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[John Redwood (Wokingham) (Con)]

I declare my business interests in the register.

I came to this debate expecting to hear the Minister set out a vision of post-Brexit Britain, how the taxation system will be transformed and how VAT will be changed to encourage our businesses and give our consumers a better time. Instead, we have six resolutions that are mainly about trying to make sure that the Government can get even more VAT out of people after we have left than before. The Government could have done that at any time. Where is the vision that we will have a much better tax system after Brexit?

We are taking back control of VAT, which was almost entirely under EU control. The Government say, for example, they wish to be a green Government, but these measures will not even take VAT off a whole series of green products, which should not have VAT on them if the Government are trying to encourage people to insulate their homes, change their boiler controls or put in more fuel-efficient ways of heating their homes. The Minister has failed this very simple test.

We have six resolutions about a piece of legislation which we are not allowed to see until after the debate. It is a piece of legislation that will be very complex, because it is mainly about the techniques of raising revenue and making sure that no revenue escapes. However, the Brexit voters out there—the majority in the country—have had to vote three times now for Brexit to make it clear to the House of Commons that they want even this House of Commons to be in charge, even though there are still too many MPs on the Opposition Benches who hate the idea of this country legislating for and governing itself and think that every law that comes from Europe is wise and necessary and every law that is made here is somehow inappropriate.

We want our Ministers to say, “No, we are the people’s representatives. We had the majority in the election and we are going to transform our country’s economy, recover the economy from covid-19 and level up the country.” That requires bold and visionary leadership and it certainly requires pretty fundamental tax changes. VAT rates on some things are too high. VAT should not be imposed on some things at all. We need to remodel that tax. We need to look again at our corporate taxes, where a series of judgments by the European Court of Justice prevented this country levying all the corporate taxes that it wished to raise.

[Patrick Grady]

I probably should not rise to the bait, but does the right hon. Gentleman honestly think that the way the Government are treating the House tonight is an expression of parliamentary sovereignty? Is this what he really campaigned for over all these years, so that the Government could fast-track major financial legislation, bounce it through the House of Commons, not give us the information we are looking for and not subject it to proper debate? Is that what he campaigned for for all these years?

[John Redwood]

The answer is that I campaigned for this Parliament to take control and use it in the interests of the people, which is why I am making the speech that I am making. Why does the hon. Gentleman not listen to it instead of planning an intervention for a speech I am not making? I am urging the Government to take back control and use it in the way that the public would like to see them use it.

I must take up the point of sovereignty. My hon. Friend the Member for Stone (Sir William Cash) is quite right to go back to that. The simple truth about Brexit is that Brexit voters knew exactly what we were voting for. We understood the slogan “Take back control”, and we think control—the right of self-government, the right to trust people in these Houses of Parliament to make decisions for us or the right to throw them out if they are useless—is fundamental to our freedoms and living in a democracy. You do not bargain those away in some kind of dispute about tariffs. You do not argue about those in the context of making compromises.

This is the fundamental truth of Brexit. Like practically every other country in the world that is not a member of the EU, we just want to be free to make those decisions and laws that we can make and have representative institutions—a great Parliament—in order to do that. We clearly need to train some of the parliamentarians in the idea that we can make better laws here than people can make for us abroad and that we can modify European laws that we currently have so that they work in our interests better.