Taxation (Cross-border Trade) Bill

Debate between Richard Graham and Chris Leslie

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Richard Graham]

My hon. Friend is absolutely right. He brilliantly pre-empts the point I was about to make, which is that although some Opposition Members have described the uncertainty that they say the Bill will cause, the Bill will precisely help to avoid the cliff edge that all of us—but, above all, businesses—want to avoid. I thank him for his intervention.

The key is that the Bill will ensure that a customs regime is in place for cross-border business to flourish, whatever the results of the negotiations. To be honest, I think my right hon. Friend the Member for Broxtowe (Anna Soubry) underestimated the importance of technology not just in business, but for our customs processes. Regardless of whether or not we had decided to leave the EU, replacing the existing customs system, CHIEF, with the new IT platform, CDS, will, although it comes with a caveat about new Government IT systems, help our customs regime—it is currently rated fifth out of 160 countries in the world for its efficiency by the World Bank—to maintain or improve our position. The trusted trader system used by Canada and Australia, for example, has obvious replicability for trade at the border between Northern Ireland and the Republic of Ireland.

At the same time, the Bill is not devoid of ideas. The earlier customs White Paper outlined the two key negotiating positions for the Government, the first being a streamlined option and the second being a new customs partnership. My own belief is that if our European partners—that is entirely the right word for members of an organisation with which we have 44% of our exports—prove pragmatic in their interpretation of the new partnership, I very much hope that option 2 will prove possible. This option would allow the UK to mirror EU customs arrangements and trade policies for goods that are eventually to be consumed within the EU—even if they are first used, as it were, in the UK—thereby ensuring that the right amount of EU duty is paid without introducing new customs processes between us. This would be a practical benefit from a new partnership that I very much hope will come forward from the negotiations.

Let me turn to the amendment. The hon. Member for Bootle (Peter Dowd) talked with some passion about the manufacturing jobs in his constituency—rather fewer, I have to tell him, than the 4,000 manufacturing jobs in Gloucester; we all have manufacturing as a key element of our constituency business. He has concerns about the Bill’s impact on manufacturing, and the amendment therefore raises three objections to the Bill, which I will come on to. At the same time, there is clearly a certain demand from Opposition Members for an internal Labour debate about their party’s position on the customs union. The hon. Member for Nottingham East (Mr Leslie) would like a special debate on whether the preference of the leading Opposition party is for a customs union or for the customs union, and I am sure others from the Scottish National party would add weight to his discussions on that subject.

The truth is that Labour’s objection to powers coming back to the UK because we are “denied any detail”—the hon. Member for Bootle used that phrase—is bizarre, given that the whole point of the Bill, as my hon. Friend the Member for Stirling (Stephen Kerr) mentioned, is to avoid a cliff edge by putting in place the mechanisms needed, whatever the result of the negotiation, which has not yet started in detail. At the same time, Labour is complaining that the Bill gives powers back only to the Government, rather than to Parliament. In fact, of course, all the detail post-negotiation would come to Parliament through secondary legislation, on which all of us in this House would decide.

[Mr Leslie]

Has the hon. Gentleman had a chance to look at clause 31(4) in relation to forming a customs union with the United Kingdom? He can correct me if I am wrong, but I do not think that that would necessarily come before Parliament. It would be done by Her Majesty through an Order in Council.

[Richard Graham]

On that specific detail, the hon. Gentleman may well be right, but, ultimately, Parliament will decide the shape of any future agreement.

--- Later in debate ---

[Mr Leslie]

I will come on to that when I discuss part 3 of the Bill and the VAT consequences for not just businesses, but potentially consumers as well.

[Richard Graham]

I know that the hon. Gentleman holds his views deeply and sincerely; colleagues of mine hold very different views equally sincerely. Surely the crucial thing for all of us, however, is that the Bill allows for any of those possible outcomes. It does not predetermine the result of the negotiations or determine whether the United Kingdom will have a future free trade agreement with the European Union that replicates almost completely the existing customs union. Therefore, surely we can agree tonight about the importance of having a mechanism in place that avoids the cliff edge that all the businesses in all of our constituencies want to avoid.

[Mr Leslie]

If only that were the case. In fact, that same point is raised in paragraph 9 on page 6 of the explanatory notes, which states:

“The Taxation…Bill does not presuppose any particular outcome from the UK’s negotiations with the EU.”

That is not true. The Government have absolutely presupposed that the customs union is off the table. It is the ultimate presupposition, if ever anyone wanted a definition. This Bill apparently does not allow us to stay in the customs union, but it should allow us to do so, because I happen to believe that there is a majority in this House of Commons for membership of the customs union. I have a little job of work to do to continue to persuade my own party’s Front Benchers of that particular point, but I will try my best to do so because I think they will eventually recognise that being part of the customs union is incredibly important for our economy not just in the transition period, but for the longer term. I believe that the numbers are here in the House of Commons to support that and that it will eventually be proven.

I am disappointed that the Government have tried to twist parliamentary procedure by deeming this measure to be a money Bill. It is Mr Speaker who will decide whether or not it is a money Bill, and I think he will do so at the end of this particular Commons procedure. The Government, though, in a slightly tricksy way, are putting through the Bill following a Ways and Means resolution. Why have they done that? They have gutted the Trade Bill and stuck everything they possibly can into what was the customs Bill so that it cannot be amended by the House of Lords. It is the most obvious trick in the book—rule 101 for a Minister. I have been around the block a number of times, and I have to tell the Minister that there are whole clauses in the Bill, such as clause 31, that are about the formation of a customs union. How is that a matter purely for a money Bill? It is absolutely an issue of public policy to do with our trading alliances that the other place should have every right to pass comment on. If it has advice and suggestions for this place, it should be allowed to amend the Bill.

Duties of Customs

Debate between Richard Graham and Chris Leslie

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

[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%.

Public Service Pensions Bill

Debate between Richard Graham and Chris Leslie

Monday 29th October 2012 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this long and important debate on pensions. This is a subject on which we would surely all agree that the object is to get cross-party agreement on issues that affect so many of our constituents, and that should be achievable. Indeed, the coalition Government have already achieved it across the two parties, and by seeking and taking Lord Hutton’s advice they hoped to secure agreement from Labour. In that sense, it is good news that this Second Reading will be unopposed, but it is none the less sad that we have heard so many speeches in which Labour Members were unable to rise to the challenge of reaching agreement and seeking harmony and instead sought to make a series of party political, aggressive and disagreeable contributions to the pensions debate.

Let me start with the hon. Member for Leeds West (Rachel Reeves), who led the debate for the Opposition. She said, for example, that the Opposition had accepted the need for a move from RPI to CPI as an index for pensions only as a temporary deficit reduction measure for the life of this Parliament, and she criticised its timing. However, she completely failed to mention that the Labour party itself had already changed the index for its own pension scheme for its party workers from RPI to CPI before the Government did likewise for all public sector workers. Unfortunately the hon. Lady is not in her seat, but the right hon. Member for Wentworth and Dearne (John Healey), who is here, said that the change had been imposed without warning and called it the moment at which the Government had lost their moral authority. I am sure that he will be able to explain to his own party workers quite what moral authority his party has on this issue, having made precisely the same change. The reality is that both the Labour party and this Government have had to face uncomfortable facts— above all, the consequences of the fact that so many of us are living for so much longer—and have had to tailor pensions accordingly.

The hon. Member for Leeds West rightly expressed concern for public sector workers. She may be a deferred public sector scheme worker herself, as am I and many other Government Members, and it is important for Labour Members to understand that we do not all represent purely the private sector. This is about seeking agreement for public sector and private sector workers from Members of Parliament who have themselves worked in both sectors. She rightly stood up for public sector workers but was unable to give any credit to this Bill, which has completely protected workers earning less than the full-time equivalent of £15,000 a year—some 15% of the work force—and provides considerable protection for people, many of whom live in my constituency, who earn less than the full-time equivalent of £21,000 a year.

The Bill also protects everybody who is within 10 years of retirement, which is very important for so many of our constituents who are in their 40s and early 50s. Crucially, it increases accrual rates, which is a technical point that will be appreciated by those who have worked in the sector, such as the right hon. Member for Wentworth and Dearne. Above all, and most importantly, the Bill protects the risk-free investment nature of a defined benefit scheme.

On that point, I must refer to the speech by the hon. Member for Hayes and Harlington (John McDonnell), who is in his place and whose integrity I respect. He quoted, as he would in his role as the Public and Commercial Services Union representative, the PCS briefing for this Second Reading debate and came to the same conclusion that

“members will work longer, pay more and get less pension.”

The reality, however, is that all of us will live longer, work longer and, if we are lucky enough to have one, get a pension for longer, and those who are public sector workers will have a much better pension than anyone else in the land.

My point to the hon. Gentleman and the hon. Member for Blaydon (Mr Anderson), who is not in his place, is that it is no good simply championing the status quo for today’s workers and betray tomorrow’s. In many ways, that is what happened—I am afraid that the trade unions are partly culpable for this—to private sector DB schemes, which the right hon. Member for Birkenhead (Mr Field) has often referred to as the jewel in the crown. Many of them have closed precisely because the unions could not and would not see the future and adapt before companies decided that they could no longer afford the schemes and closed them.

The point of this Bill—this should be something on which every Member of this House can unite—is that this Government are trying to work with unions and Opposition Members to keep defined-benefit schemes for the public sector, despite the fact that we will all live for so much longer than our fathers and mothers, and that, therefore, the cost of those pensions will be so much greater. To use the analogy of the hon. Member for Blaydon, it may be raining, but this Bill will make sure that the umbrella is kept for public sector workers.

[Chris Leslie]

The hon. Gentleman says that we should all stand together to defend ongoing defined-benefit schemes, so could he explain why the Bill does not honour that commitment? Clause 7 states that schemes created under the Bill can be defined-benefit schemes, but they can also be defined-contribution schemes or

“a scheme of any other description”.

Where is the guarantee that these will be defined-benefit schemes?

[Richard Graham]

I have no idea whether the word “guarantee” is in the Bill. In life, only two things are guaranteed as far as I know: taxation and death. We are talking about not guarantees as such, but a defined-benefit scheme in which the entire risk is taken by the taxpayer and the certainty that gives people the chance to budget in their retirement is with the scheme’s beneficiary. In fact, it is even better than that. As the hon. Gentleman will know, because he has studied these things carefully, the advantage of a career average defined-benefit scheme is that it benefits precisely those workers whom I would have imagined he would be most in favour of protecting.

The Pensions Policy Institute, which the hon. Member for Hayes and Harlington referred to, says:

“The Coalition’s proposed reforms will remove the different outcomes for high-flyers and low-flyers which exist in final salary schemes.”

It goes on to estimate that, under the current scheme, a high flyer

“would have had a pension benefit of 29% of salary, compared to 11% of salary for the low-flyer.”

Under the reforms proposed by this Government, both high and low flyers will have

“the average value of the pension offered being worth 15% of salary”.

That is a significant improvement for the low flyers. I would be astonished if all Members of the House were not in favour of that reform.

The hon. Member for Leeds West recognised that something had to be done, but tellingly, she made no reference at all to three of Lord Hutton’s four tests—affordability, fairness to the taxpayer and governance and transparency. Did she not think they mattered? Should they not be at the heart of what any Government do? That was a disappointing series of omissions.