Taxation (Post-transition Period) Bill

Toby Perkins Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 9th December 2020 Commons Chamber

[Jesse Norman]

As the hon. Gentleman will know, goods that are, as it were, normally circulating in Northern Ireland will be open to go into Great Britain from the beginning. There will be some goods that, over time, will be designated as non-qualifying goods for these purposes, and HMRC has well established practices for identifying, discussing and targeting those, as may be necessary, and will be applying them to prevent avoidance and to keep the market honest.

As I have said, the Bill will ensure that the UK customs regime applies to goods moving from Northern Ireland to Great Britain if they do not qualify for unfettered access. These anti-avoidance rules will prevent goods from being rerouted through Northern Ireland to avoid UK customs duties or associated obligations, and its measures will ensure that customs enforcement and penalties, along with review and appeal processes, continue to work alongside EU legislation in Northern Ireland and can be applied, where required, to movements of goods between Northern Ireland and Great Britain.

The Bill also amends and modifies certain provisions in relation to VAT and excise for Northern Ireland.

[Mr Toby Perkins (Chesterfield) (Lab)]

In many of these debates over the past four years, the Government have referred to “frictionless trade” between the mainland and Northern Ireland. The Government now say that they want VAT accounting treatment for goods moving between Great Britain and Northern Ireland to remain “as close as possible” to the current approach. Will the Minister confirm whether we have now accepted that frictionless trade is not possible? Can he tell us a little more about what “as close as possible” actually means for businesses in Northern Ireland that are looking forward to 1 January with some trepidation?

[Jesse Norman]

I thank the hon. Gentleman for his question and, yes, the legal basis on which VAT is charged will change. I will spare him the details of the difference between import VAT and acquisition VAT, but it will change. The experience of those who pay VAT will be very similar, if not identical, to the system we have in place at the moment. HMRC and the Government have identified flexibilities, which allow that to be put in place. Of course, there will continue to be the normal processes of enforcement that one would expect to see from HMRC in order to make sure that VAT is properly paid in the usual way.

--- Later in debate ---

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

It is a year to the day since the Chancellor boasted that there was no need to plan for no deal because

“we will have a deal.”

Yet today, as we debate this Bill, we stand on the brink of a no-deal Brexit that would destroy jobs and livelihoods right across the United Kingdom. We have only 22 days to go until the end of the transition period, with still no deal in sight.

When we debated yesterday the Ways and Means resolutions associated with this Bill, a number of Government Members claimed that agreements between nations are often only finalised at the last minute—that there is nothing out of the ordinary about this Government’s approach. That is because for run-of-the-mill agreements there is a fall-back option, a status quo. But failing to reach a deal now does not mean a return to the status quo—that we stay as we are. It means extensive economic damage to the tune of an additional 2% loss of GDP, on top of the 4% loss of GDP that the Office for Budget Responsibility has calculated would be the impact of a very thin deal: the type of thin-as-gruel deal that the Conservatives look set to deliver.

[Mr Perkins]

My hon. Friend is absolutely right, but even the statistics that she refers to regarding the overall impact on the economy mask the absolutely catastrophic impact that no deal would have on individual businesses and individual industries. I had the pleasure of visiting the Toyota factory in Derby. No deal means that the entire purpose of that factory being based in Derby is under serious threat. Alongside those statistics about the overall impact, it is really important that we recognise that the situation is much worse than that for individual businesses and industries.

[Anneliese Dodds]

My hon. Friend is absolutely right. There is potentially a very, very severe impact from no deal, but, as I will go on to explain, there is already a concrete and very acute impact on our economy. I am particularly concerned about the situation for many businesses based in Northern Ireland.

This damage will be long lasting, likely to outlive even the impact of the current covid crisis. Our country cannot afford this. We have already experienced the steepest economic downturn in the G7 due to the covid crisis, and are predicted by the OECD to experience the slowest recovery in the G7. Just the prospect of a potential no-deal outcome is already leading to chaos in the midst of a pandemic. Stockpiling by companies, caused by the threat of no deal, is exacerbating supply blockages at our ports.

--- Later in debate ---

[Mr Toby Perkins (Chesterfield) (Lab)]

It is a great pleasure to follow the right hon. Member for Wokingham (John Redwood). Unusually, I found myself agreeing with much of what he said about the time we have to debate this Bill. The points made by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) in the previous debate were absolutely on the mark.

As someone who voted in the referendum to remain but who represents a seat that voted leave, I have to say that when I hear speeches such as the right hon. Gentleman’s, and many others that we are going to hear, I fear that much of what I have long feared about the whole Brexit process is coming to pass, which is that Brexit will be an orphan child and when we have left the EU and come to our final arrangement, it will be impossible to find anyone, perhaps with the exception of the Prime Minister, who says, “This is the Brexit I was campaigning for.”

Brexit operated in so many different people’s minds as a different entity. Even now, with a Brexit-backing Prime Minister, an overwhelming Tory majority, any Tories who showed a whiff of regard for our future relationship with Europe banished from the party and all rebellion quashed, the fundamental contradictions of Brexit remain unresolved. I have no way of knowing whether there will be a deal, but I can be certain that when that deal is signed many who argued earnestly that we should leave the EU will claim, “This was not the Brexit I was campaigning for.”

Let me turn to the measures in the Bill. I confess that during the referendum our campaign to back remain in Chesterfield hardly touched on the position of Northern Ireland. We did speak a bit about the Union in the context of Scotland, but Northern Ireland was barely mentioned, yet much of the Bill relates to the provisions relating to Northern Ireland that have become central to the issues that remain. The Labour party is, as I am, resolutely behind the Union and entirely committed to the Belfast agreement, and we recognise the many contradictions that persist.

I have to say to colleagues from the Democratic Unionist party and others that they should not think that these Northern Ireland issues concern very many of my constituents in Chesterfield. I know from many conversations that took place during the general elections on doorsteps in Chesterfield in 2019, when I was trying to raise the issues associated with Northern Ireland, that if the cost of getting a Brexit deal that enables our country to trade freely and regain control of immigration happened to be a united Ireland, many of my Brexit-voting constituents would accept that in a heartbeat. The people of Northern Ireland, whom, we should remember, in totality voted to remain, have been badly let down by many of the people they elected to represent them, either by those who sold their support to prop up the disastrous May Government and were then shocked to be sold down the river by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), or by those who, through their absence from this place, allowed the Brexit view to be heard as the dominant opinion of Northern Ireland.

The businesses of Northern Ireland are now starting to understand what that failure means for them. Right now it means that just weeks away from a change that will impact them more than any other on these islands, the promise that they will be able to enjoy frictionless trade has been exposed as wrong. It is irresponsible that when the Government themselves acknowledge that the administrative impacts on businesses affected by these changes will be significant, those businesses have so little time to plan, and no serious economic or fiscal impact assessments are contained within.

The last-minute nature of the Bill once again exposes the fact that the businesses of Great Britain, and particularly Northern Ireland, are left vulnerable by this incompetent Government’s pursuit of a promise that they cannot keep and should never have made. Although I wish the Prime Minister well tonight, the whole country needs him to remove the spectre of no deal from the nightmares we face as we look towards 2021. Once again, the Government are leaving businesses in the dark, jobs at risk and industries on the brink.

[Mr Deputy Speaker (Mr Nigel Evans)]

The next two speeches will be timed at four minutes, and then everyone else will have three minutes.