Duties of Customs

Richard Graham Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It is a great pleasure to follow the hon. Member for Edinburgh South (Ian Murray), who spoke, at considerable length, of his conviction that the customs union is the way forward. He has always spoken with great clarity and certainty, although I suggest that he is more compelling in his usual manner as Tigger than as the Eeyore whom we saw tonight. I would also say that the difficulty of assuming that business is monolithic, and always speaks with one voice, is that it does not. There are businesses in my constituency with which I deal as a trade envoy that are concerned about the future, but there are others that are relaxed. Both those views will depend, ultimately, on what sort of arrangement we reach on trade and customs, and on what terms.

That brings us to this preparatory Bill. As the Minister has explained, it is fundamentally nothing other than necessary preparation for when we leave the European Union. It is a framework, not a position on a preferred type of future customs relationship. It allows for either of the Government’s options: a streamlined system that is, as far as I can see, identical to the current one; and a new customs partnership of which I am sure we shall hear more when the Bill is published. This preparatory work will be even more important in the sad event of future arrangements not being agreed with the EU.

The Minister confirmed that HMRC arrangements at our roll-on/roll-off ports will be in place in January 2019, ready to deal with worst-case scenarios. I believe that there is an important political point behind that, which Members who, like the hon. Member for Edinburgh South, would much prefer to stay in the customs union need to consider very carefully. There are some who believe that leaving the EU without a future deal or any implementation period would be a walk in the park, whereas others believe that it would be impossible to operate our ports, and, perhaps, much of our trade, and that it would therefore be a disaster to leave the customs union at all.

However, many of us who have always thought that both the UK and the EU would benefit hugely from a strong customs partnership for the future, and what Michel Barnier calls a “new partnership” in general, believe that this preparatory Bill is essential to that. It is absolutely vital that the EU does not overplay its strong hand at this delicate stage of negotiations, for if it decides that negotiations on citizens’ rights, Ireland and finance have made insufficient progress to allow us to move on to debating an implementation period, future trade and other partnerships, there is a real danger that the momentum will move behind those who believe not only that no deal is possible, but that it is likely or even desirable, and that we need to prepare for that situation above all else.

[Peter Grant]

rose—

[Richard Graham]

I am sorry, but I will not give way.

For those of us who want the negotiations to succeed and a new partnership, it is therefore incredibly important that our partners in the EU encourage us to build momentum for that by moving to detailed talks on future trade and customs arrangements as soon as possible. For now, this is simply an enabling Bill of changes, allowing for future UK tariffs, VAT levels, goods classifications and so on. As the hon. Member for Bootle (Peter Dowd) said, it is both practical and necessary. Today’s amendments close off the options and it would be sensible to avoid them.

[Tom Brake (Carshalton and Wallington) (LD)]

It is a pleasure to follow the hon. Member for Gloucester (Richard Graham), a fellow remainer, and I hope that remainers on the Conservative Benches will be a little more outspoken about their concerns.

[Richard Graham]

For clarification, I point out to the right hon. Gentleman that he is following a pragmatist.

[Tom Brake]

If I am indeed following a pragmatist, I hope that the hon. Gentleman will listen to what is being said by many economic sectors, and perhaps read carefully the 58 sectoral reports once they are published, and come to the very pragmatic conclusion that he, as a pragmatist, will want to start to be more outspoken about the Government’s agenda of taking us over the cliff.

Members have suggested that the UK needs to leave the EU to be able to trade, but that is clearly not true. Many European countries are just much more successful than us at trading with other countries, including Germany, France and Italy. They do so within the EU, so there is no reason why we could not do so more effectively than at present. If we are unable to trade while we are part of the EU, I wonder why previous Prime Ministers, particularly David Cameron, spent so much time and effort sending trade delegations to various countries around the world to drum up trade. Was that a completely pointless exercise? Was that just about having 10-course banquets in Beijing, or was it because we can do a lot to boost trade while we are in the European Union? I think it was the latter, rather than a desire to have big dinners courtesy of foreign Governments. Of course the UK is in a position to trade—and, perhaps, to do so more effectively—with other countries while we are members of the EU.

It is nice, as a Liberal Democrat, to be able to make a speech that is longer than three minutes, so I might take full advantage of that in the couple of hours that remain for me to make a contribution, before the Front Benchers make their response. First, I want to focus on the issue of Ireland and Northern Ireland. Frankly, Opposition Members have had enough of listening to Ministers’ platitudes about how they will sort out the problem that is the border between Ireland and Northern Ireland. We do not want to hear about “frictionless” any more, or about blue-skies solutions that do not yet exist. What we want to hear from Ministers is the solution to this problem, because if the Irish Prime Minister was asking on Friday for a written guarantee from the UK Government that there would be no border controls, that was because he is worried and because he has heard nothing from our Government to explain how we will be able to leave the customs union, yet have no border and no border controls between Ireland and Northern Ireland.

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[Tom Brake]

Absolutely, and that is why I believe that the question of Ireland and Northern Ireland is the most challenging of the three. The Government could and should have resolved the question of EU citizens 15 months ago by simply saying to them, “You have the right to remain.” The settlement bill is clearly very difficult politically for the Conservative party, because many of its Members are on record as saying, “We won’t give the EU a single penny; in fact, they owe us loads of money,” so they now have a difficult political position to adopt if they say that they support a payment. We do not know how much that will be, but one figure that has been mentioned is £40 billion, and an interesting article in The Sunday Times a couple of weeks ago, which seemed to be flying a kite, referred to £53 billion. Although that question could be resolved at the cost of some political pain, no one has put forward any solution to the issue of Ireland and Northern Ireland that does not involve some sort of control. That might be ad hoc control, and it might not be directly at the border, but some sort of control will be required.

[Richard Graham]

The right hon. Gentleman has touched briefly on citizens’ rights. Given that both sides have said that that is their absolute top priority, can he explain why the European Union turned down our proposal to treat citizens’ rights first, on their own, so that the matter could have been agreed in perpetuity, regardless of what happened to anything else?

[Tom Brake]

That might be an issue on which we agree. If we are moving towards a no-deal scenario, there is an overwhelming case for parking the issue of EU and UK citizens’ rights and resolving it, because it is a question of humanity and giving safety and security to the 3 million EU citizens here and the 1.2 million UK citizens in the EU.

The border between Ireland and Northern Ireland has 275 crossings. If there is to be some sort of control, will it be at each and every one of those crossings? Presumably not; otherwise, the number of people that HMRC is going to have to recruit would be much greater than the 3,000 to 5,000 it already needs.

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[Tom Brake]

Absolutely; I do have those concerns. It is worth knowing that when the 17-mile tailback occurred two years ago, it was the result of just two French border officers not turning up for their shift. The 20 sq km lorry park—whose construction has now been kicked into the long grass because of the judicial review—would accommodate 3,500 lorries. However, 10,000 lorries go through that port each day, so a lorry park that would accommodate 3,500 lorries will not do very much if there is severe disruption at the port. That is why one of the options the port is considering is to create lorry parks all over the country. In the event of a delay, the port could text drivers in, for example, Leeds or Edinburgh to say, “Sorry, we’ve got a bit of a problem at Dover. Don’t bother coming, because if you do, the town will collapse. Just stay in that lorry park and we’ll tell you when it’s safe to come down.”

[Richard Graham]

We have heard much of what the right hon. Gentleman is saying before. No doubt he will have heard the mayor of Calais and the head of the port there saying that no deal would be a catastrophe for them as well. Does that not encourage him to believe that good sense should prevail, and that we can arrive at an arrangement that suits those on both sides of the channel equally well?

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[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

I think that the Minister said at the outset that it is the Government’s policy to leave the customs union. It was not on the ballot paper in the referendum; it is a policy choice that the Government are taking. It is therefore the Government’s policy to exit the most efficient, tariff-free, frictionless, free trade area anywhere in the world, and what we will end up with afterwards is therefore bound to be inferior—possibly very much inferior—to the basic free trade arrangements enjoyed by most countries around the world. We could find ourselves at the mercy of basic WTO tariff arrangements, so the Bill that we are paving the way for with this Ways and Means motion comes at a crucial juncture.

I thought it was unfair that many Government Members referred to the speech of my hon. Friend the Member for Edinburgh South (Ian Murray) as Eeyore-ish. He is actually quite a positive character, who wants to do the best for trade, for business and for this country. In fact, if anything is negative, it is the legislation that the Government are proposing. The Minister was the harbinger of doom, because the Bill plans for a no-deal scenario. This set of legislative changes paves the way for circumstances in which the UK may be imposing tariffs on our nearest trading neighbours and vice versa. I cannot think of something more depressing, defeatist or premature, especially given that we have not even had the negotiations yet. In fact, I cannot think of anything much more aggressive towards the negotiation settlement that we are trying to get than the suggestion that we are going to put into legislation the ability for us to raise significant tariffs with our nearest trading partners, with whom 50% of our trade takes place.

[Richard Graham]

The hon. Gentleman is talking rationally, as always. The reason why I felt that the hon. Member for Edinburgh South (Ian Murray) was being rather Eeyore-ish is that he underestimates the impact on Scottish whisky, about which he talked quite a lot, of the far east. He needs to go and see the Johnnie Walker shops in Shanghai and Beijing. He needs to look closely at Whyte & Mackay—a failing Glaswegian whisky manufacturer now saved and re-energised by a buyer from the Philippines—to understand that the future of Scottish whisky lies as much in Asia and other far-flung places as it does in Europe.

[Mr Leslie]

That may be so, but this is not an either/or situation. This is not about selling a fantastic Scottish whisky product to China or to Europe; we should be doing both. German car manufacturers and French food producers are trading exceptionally well with the far east, while remaining a member of the customs union and of the single market. My quibble with Ministers and some Government Members is that they give an impression that this is a binary, either/or arrangement. They say, “Oh well, we can ditch our trading relationships and partnerships with our nearest neighbours, because we might eventually be able to do something with China, India, Australia or Brazil,” but we should be able to do all those things. We can do all those things simultaneously, while remaining part of the greatest free trade area of any set of nations anywhere in the world, but we are about to throw that overboard for no reason resulting from the referendum, but due to Government policy.

We all obviously hope that we can salvage that relationship within the single market and the customs unions in a short transitional period, but that will take quite a lot of negotiation and depends on several different things. It is a shame that the German Government are in an unstable situation, because I suspect that that will make things far harder. I did not vote in favour of triggering article 50 because I thought that doing so was premature. I thought we should have secured a better timetable than the one we ended up with, because of course the clock ticks down. We could end up with unforeseen diplomatic wrinkles in the process and be backed into a corner, possibly finding ourselves with an inferior transition arrangement and a snap general election that nobody anticipates, least of all Conservative Members.

Let us bear in mind what this Ways and Means motion might presage for tariffs on our different imports and exports. [Interruption.] I know the Whip, the hon. Member for Beverley and Holderness (Graham Stuart), and the Minister are listening very carefully. A 7% tariff would be introduced on ceramic products. On cars, the tariff would be 10%.