Duties of Customs

Andrew Murrison Excerpts

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

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Does the Minister agree that it is wrong to say that phytosanitary checks do not happen—or could not happen—at the moment? We experienced such checks clearly in 2001, at the time of the bovine spongiform encephalopathy outbreak. These things are very real and they happen from time to time. It is right that member states should be able to protect public health and animal health, and they are perfectly capable of doing so within the European Union.

[Mel Stride]

My hon. Friend has put the point very clearly and effectively, and nothing in this Bill acts counter to our ability to act in the way he has suggested.

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[Mr Fysh]

I thank the hon. Lady. I agree that we need clarity as early as possible on all these issues, and I encourage Ministers to come forward with ideas on that.

Returning to what we heard about Ireland in various interventions on the Minister, I would like him to think about whether, in the VAT resolutions, we are confining ourselves a little too much by saying that the Government may not, through the Bill, make any amendment relating to VAT rates, exemptions and zero rating. One of the issues with the Irish border historically, and where the real problems came from when Ireland was given its independence, was the amount of smuggling, and the rates and tariffs on goods going into the UK were a major factor in that. Perhaps we could look to smoothing the feelings and the actual processes on the Irish border to make sure that, as far as possible, our VAT rates are as harmonised as they could be so that there is no temptation to smuggle there.

[Dr Murrison]

My hon. Friend makes some extremely important points. In connection with the Irish border, a derogation already exists, potentially, between the European Union and its neighbouring states through EC regulation 1931/2006, which allows, particularly within a certain distance of the border, small and medium-sized enterprises legally to avoid duties and customs, thus ensuring and promoting cross-border trade. Does he agree that that model could be appropriate on the island of Ireland?

[Mr Fysh]

I thank my hon. Friend. That is a very interesting point, and I am sure that Ministers will look at it.

The Irish economy probably has more to lose than any other party in the negotiations between us and the EU. We have been talking in our papers about wanting to maintain the common transit convention, and that is probably right. Ireland is incredibly dependent on that because 80% of its trade with the mainland EU goes via our UK land bridge. There are many issues with that, not least the licensing of drivers who currently drive these goods across the borders in a seamless fashion. We need to make sure that we focus on enabling that if we want—

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[Kirsty Blackman]

I absolutely agree.

Monique Ebell from the National Institute of Economic and Social Research has written a report that compares participation in very comprehensive free trade agreements with membership of an organisation such as the single market, which is pretty much unparalleled in its encouragement of cross-border trade. Being part of a very close free trade arrangement does not give the same access to trade in services or goods as membership of the single market. Even if we had a comprehensive free trade agreement with every country in the world, we would still lose out as a result of Brexit.

[Dr Murrison]

I am listening with a great deal of interest to what the hon. Lady has to say. The amendments she tabled express commendable encouragement to the European Union, which does her great credit. However, in the interests of being balanced and fair, is she also concerned for much of Africa and South America? At the moment, they suffer the whip end of the customs union, as it makes the export of raw food products to Europe virtually impossible for many of them. Would she like to comment on that, since I am sure that the SNP is very concerned to promote the wellbeing of people in those countries?

[Kirsty Blackman]

The hon. Gentleman raises an interesting case. I have not looked into all the impacts, but the WTO gives developing countries tariff protection, for example. It is likely that some of these things balance out, but I have not looked into the exact details. I am aware that some Brexit supporters are suddenly concerned about how developing countries will cope with international trade, although they were not particularly worried about that before.

I want to move on to talk specifically about some of the impacts of the proposed changes. I have mentioned the problems that people sending and receiving parcels might face. The Government’s “Future customs” paper states:

“Trade is a key driver of growth and prosperity. It stimulates greater business efficiency and higher productivity, sharing knowledge and innovation across the globe.”

It goes on to say that trade

“provides a foundation for stronger and more prosperous communities. It ensures more people can access a wider choice of goods at lower cost”.

Those are all arguments for staying in the customs union, not leaving it.

All the Government’s papers refer to consulting businesses. In all our conversations, the Government have said that they have spoken to businesses. The problem is that although businesses are lobbying the Government as loudly as they possibly can about the impacts of Brexit, the Government are not listening. The Government have an aspirational picture of how wonderful Brexit is going to be and no matter how much evidence to the contrary they are provided with, they continue to push on. Even Conservative Members who supported remain are suggesting, in the main, that we will have benefits from Brexit. In my eyes, that is not right.

The customs declaration service was mentioned by the hon. Member for Yeovil (Mr Fysh). The Minister is generally very good at explaining such things. He has said that he hopes to have pilots soon, with the service up and running by January 2019, but three months is not enough to test a customs declaration service fully. It is not enough to allow businesses to iron out all the problems that might arise or to get used to the red tape.

I want to go back to the issues raised by some of the Government’s aspirations and ideas that are, honestly, unworkable. One of the nine principles they have set out for what they expect to do to deal with trade between Northern Ireland and Ireland is:

“Consider how best to protect the integrity of both the EU Customs Union, Single Market and trade policy, and the new independent UK customs regime, internal market and trade policy, in the context of finding flexible and imaginative solutions, while recognising that the solution will need to go beyond any previous precedents.”

That is an aspiration without a solution. They are not putting forward a potential solution. They cannot even think of anything to square this circle, fix this problem or dig themselves out of the hole into which they have fallen.

This is an unmitigated disaster. The changes that the Government propose, particularly the customs duties that will be put on goods coming from the EU, or leaving the UK to go to the EU, are a disaster for businesses and for people at home. Some of those goods cross the border several times. For organisations such as car manufacturers or aerospace companies, sometimes the widgets—for want of a better word—cross from the UK to the EU and back many times before there is a finished product. If there has to be a customs declaration each time, and if there is an increase of even a few minutes in the time taken on each occasion, real problems will be caused to a huge number of businesses.

Businesses are speaking to the Government and raising concerns, but the Government are not listening. They now need to give businesses a clear direction. They need to make it absolutely clear today that their intention is that we will not have customs duties between the UK and the EU, so they should support the amendments.