Duties of Customs

Ian Murray Excerpts

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

[Peter Dowd (Bootle) (Lab)]

At last, we have the Ways and Means motion before the House. The enigmatic—some might say pretty puzzling—part of it all is that it does not have much to say practically about taxation, cross-borders or trade. That is somewhat perplexing given that the title of the Bill is the Taxation (Cross-border Trade) Bill. The only word in the title that in any way reflects this subject is the word “Bill”.

I wait with bated breath for the customs Bill, which I trust will have—hope springs eternal—more substance to it. Perhaps we will see more of the same powers to alter primary legislation going into Ministers’ back pockets. However, if this Ways and Means motion is the warm-up act to the customs Bill, I imagine that it will be just as disappointing, vague, opaque and abstruse.

I exhort the Minister to have a look at the representations of the Chartered Institute of Taxation. I am sure that he will read those observations will alacrity, as I do. In the institute’s response to the Government’s White Paper, “Customs Bill: legislating for the UK’s future customs, VAT and excise regimes”, it made a number of observations that are worth highlighting. For example, paragraph 1.3 states:

“The paper gives rise to an unusually complex mix of legal and technical issues within equally complex political constraints. It is not our remit to enter into debate about the political constraints, but a lack of clarity around the political constraints makes the technical analysis somewhat more difficult.”

That is a fair reflection, in very measured tones, of what the rest of us think, which is that the cack-handed manner in which the Government have approached the negotiations with the EU has left the important detail that is necessary to ensure the deal that the Prime Minister ostensibly wants—namely, streamlined customs arrangements—to the vacillations of the Government in general and the Brexit Secretary in particular. That is very worrying.

It is worrying in that the Government continue to be dragged screaming and shouting to this Chamber on any issue that they feel uncomfortable debating. When they do discuss it, they try to curtail the debate. The Chartered Institute of Taxation also has something to say on that in paragraphs 5.4 and 5.5 of its response to the White Paper, which state:

“We acknowledge the predicament of needing to begin the legislative process before knowing the outcome of negotiations. However, we have concerns around the limited level of scrutiny that this law-making process allows, given the political uncertainty, the potential for large-scale changes and tight timescales… The Bill will, we understand, have the powers to amend primary legislation using secondary legislation; raising similar concerns around delegated powers as with the EU Withdrawal Bill.”

The Government are even dragging their feet on the production of the 58 impact assessments, some two weeks after this House demanded them. The Opposition recognise the need for the Government to begin preparations for an independent customs and tariff regime, as that is both logical and necessary. However, it does not mean giving the Government a blank cheque to concentrate power in the hands of the Executive. The upcoming Taxation (Cross-border Trade) Bill will outline the powers of a new trade remedies authority, the creation of which is outlined in the Government’s Trade Bill.

Let me be clear: although Labour supports the creation of a truly independent trade remedies authority to help to protect UK industry and advise the Government on how best to tackle the dumping of state-subsidised cheap goods on the UK market, we do not want to see an authority compiled of the International Trade Secretary’s cronies, who are tasked with advising him on how best to dismantle key sectors of the UK economy. Instead, we want a trade remedies authority that reports directly to Parliament, rather than to the Department for International Trade. It should have representatives from the trade union movement, British business and each of the devolved Administrations. We will not allow this House to be sidestepped or side-lined by a Government consumed by chaos.

Whether with the Henry VIII powers in the European Union (Withdrawal) Bill or the delegated powers set out in the Trade Bill, this Government have shown an unhealthy obsession for cementing power in the hands of the Executive and shying away from any parliamentary scrutiny.

[Ian Murray (Edinburgh South) (Lab)]

It seems that the mantra of “taking back control” that we saw during the EU referendum campaign essentially means taking back control to Ministers, not to this democratically-elected Parliament.

[Peter Dowd]

My hon. Friend hits the nail on the head. That has been the line that this Government have taken. Power stops at Westminster and it does not go beyond. It is, quite frankly, a sham.

The Government cannot even bring themselves to include in this Ways and Means motion any reference whatever to parliamentary scrutiny; they do not like that. At every opportunity, even if the Government have contempt for this House, we will ensure that they will be forced to explain why they are so frightened of parliamentary scrutiny. At every corner, they will be required to explain in the cold light of day why they seem so reluctant to send Ministers to the Dispatch Box to explain the Government’s rationale.

Now, the Government, in their faux generosity, will claim that they have set aside eight days to debate the withdrawal Bill and other days to discuss Brexit. However, in the withdrawal Bill, they are institutionalising an accretion of powers to the Executive that is quite unheard of in the modern history of this country. [Interruption.] Ministers are huffing and puffing, but that is the reality: the accretion of power to Ministers is absolutely disgraceful.

We have to go back to the second world war to see powers of this magnitude and extent reserved to the Government, and those were dismantled as soon after the war as practical. At least our forebears had good reason in that situation, in so far as there was a national Government—a true coalition—united against one of the most odious regimes. The methods being used to sideline Parliament are quite shocking. History will treat this Government with the contempt they deserve for their feculent attempts to disenfranchise this House.

--- Later in debate ---

[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—

[Ian Murray]

Will the hon. Gentleman give way?

[Mr Fysh]

I cannot take any more interventions, I am afraid, because other people want to speak.

Given the apparent attitude of the Government of the Republic of Ireland to some of these matters at the moment, we should not automatically assume that we will allow them access to the common transit convention. Ministers should take a pretty firm view of that given that we certainly do not want our islands and our nations to be split into different areas. I am very happy to support these resolutions.

--- Later in debate ---

[Ross Thomson (Aberdeen South) (Con)]

Great Britain’s historical reputation as one of the greatest trading nations on earth can be revived and rejuvenated by Brexit. In freeing ourselves from our EU blinkers, we can now open our eyes to the rest of the world and the vast new opportunities that lie ahead of us. Scotland, as a proud partner in the UK, has played a crucial role in cementing Britain’s place as a truly great trading nation. The city of Glasgow was a key trading centre for the UK and acted as an international business hub. For the past 40 years, the UK has legally been forbidden from striking its own trade deals.

[Ian Murray]

Will the hon. Gentleman give way?

[Stephen Doughty]

Will the hon. Gentleman give way?

[Ross Thomson]

No, I will not give way at the moment. I want to make some progress.

As we decouple from the EU, I am excited by the opportunity for Scotland to play a key role in a global trading Britain once again.

[Ian Murray]

Will the hon. Gentleman give way on Scotland?

[Ross Thomson]

I will give way.

[Ian Murray]

The hon. Gentleman and I argued during the Scottish independence referendum that one of the key arguments for Scotland not leaving the UK was that it would leave the UK single market, which would mean having a hard border at Berwick. Does he think the same in relation to Northern Ireland and the Republic of Ireland?

[Ross Thomson]

Let us be absolutely clear that during that referendum campaign, the hon. Gentleman and I were on the same side. It actually said on page 210 of the White Paper produced by the Scottish Government that, if we voted to stay within the UK, the UK could very well leave the European Union. Everyone had all the information to hand and they voted with their eyes open, and Opposition Members have—

[Ian Murray]

That is not what I asked.

[Ross Thomson]

Does the hon. Gentleman want to intervene, rather than shouting.

[Ian Murray]

I am grateful to the hon. Gentleman for allowing me to clarify that that is not what I asked him. I said that we were on the same side in the independence referendum, and one of the key arguments we both made incessantly during the referendum was that the UK single market would be broken up if Scotland became independent, which would require a hard border. The question was: why is that any different from the situation in Ireland now?

[Ross Thomson]

As we have heard from the Minister, no one wants a hard border between the rest of the United Kingdom and Northern Ireland, and the Government are working to achieve just that. I also made it clear during the referendum campaign that I have always believed in Britain’s future being outwith the European Union. I made such an argument, and I am sure others, especially those in the Labour party, would have done so too if they had perhaps been a bit more honest about their positions.

--- Later in debate ---

[Ian Murray (Edinburgh South) (Lab)]

With deep pleasure, I beg to move amendment (e), in paragraph (a), after “goods”, insert

“other than goods originating from the European Union”.

I will also speak to amendment (f). Both amendments stand in my name and the names of my right hon. and hon. Friends.

Let me first say to the hon. Member for Aberdeen South (Ross Thomson) that, although I did not agree with a word he said, I thought he made a good speech. However, while he and I have always disagreed on the European Union and we respect each other’s position—I am very much an elected Member of Parliament who wishes to stay in the EU; I am pro-European Union and he is very much anti-European Union—I have to point out to him the complete intellectual incoherence of the two arguments he makes. He says we can leave the single market, the customs union and European Union and have a frictionless, seamless, invisible border between Northern Ireland and the Republic of Ireland, but during the Scottish independence referendum campaign, he argued that leaving the UK single market would result in a hard border in goods, services and the movement of people. He does the fight against the scourge of independence in Scotland no good by making those contradictory arguments. Many of the arguments that our colleagues in the Scottish National party make about staying in the European Union and working with our closest colleagues and neighbours with regard to trade in goods and free movement of people completely contradict their arguments on coming out of the UK single market. These positions are contradictory, and I warn politicians that when they play with fire, they get burned.

[Sir Edward Leigh (Gainsborough) (Con)]

May I bring the hon. Gentleman back to amendment (e), to which he is the lead signatory? It would close off options and prevent us from imposing any tariffs on goods from the EU. The hon. Member for Bootle (Peter Dowd) described such closing off of options as “pathological”. The hon. Member for Edinburgh South (Ian Murray) always strikes me as a very nice chap; does he share my concern that his own Front-Bench spokesman thinks that amendment (e) is pathological?

[Ian Murray]

I anticipated that intervention, although not quite so early in my speech. I return the hon. Gentleman’s compliments—he is one of the nicest gentlemen in this House. The Labour party’s position on the customs union is that we want the UK to have tariff-free access to the European Union throughout the transition period, with the added option of the UK staying in the customs union. That is the position of our Front-Bench team. It is perfectly clear and chimes perfectly well with amendments (e) and (f).

I am disappointed that the amendments in the name of the hon. Member for Aberdeen North (Kirsty Blackman) were not selected. She has done a lot of work to bring the Ways and Means motion to the House, and I think the arguments advanced reflect the fact that we both want our country to stay in the single market and the customs union, not for ideological reasons, but because we know that the businesses of Aberdeen North and Aberdeen South require us to stay. It is impossible to suggest that the United Kingdom should have exactly the same benefits of the single market and the customs union, with a frictionless border and tariff-free access, but not keep the customs union and the single market on the table. It makes no sense.

[Stella Creasy]

My hon. Friend is making a powerful case. Often it is said that sometimes we just need to simplify: if it walks like a duck and talks like a duck, it is a duck. If everything the Government are saying they want looks like and sounds like the customs union and single market, why are we wasting time debating other things?

[Ian Murray]

I am tempted to say that is because they are all quackers, but I am sure that would not go down well and I gave up on the bad jokes some time ago. My hon. Friend is right: the Government are actually arguing for the single market and the customs union, but do not want either. That is why the Bill on the customs union, which will be published tomorrow, will show clearly that the Government are hell-bent in the negotiations with the EU to take us off a cliff edge. No deal is probably their preferred option, and that is what they are promoting in the Ways and Means motion.

[Stephen Doughty]

Is my hon. Friend intrigued to learn that a former Minister in the Department for Exiting the European Union plans to make a speech tomorrow arguing for precisely that proposal—that we should abandon all plans and trade talks and move ahead into a no-deal, WTO-rules Brexit?

[Ian Murray]

If that is indeed the case, anyone who is surprised by that speech has not been listening to the debate to date. It seems that the whole thrust of the Government’s negotiating position so far has been to just walk away—that no deal would be the best deal to have. As my hon. Friend the Member for Lewisham East (Heidi Alexander) said at Prime Minister’s questions not long ago, the Prime Minister is in thrall to the extreme right-wing Brexiteers of the Conservative party, and that is dictating the Government’s policy. We can see from this evening’s debate that that is true.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend makes an important point. We will have to think about investment in this country if there is no deal, because a lot of international companies have invested here for the option of being able to trade in Europe. There would be serious consequences, particularly for industry.

[Ian Murray]

Indeed, and I will come to more of those arguments later in my speech. The Foreign Affairs Committee, of which I am a member, visited the border regions in Ireland and Northern Ireland just last week, and one of the key concerns we heard from the businesses that employ many thousands of workers on both sides of the border was that they use the UK as the transit route into the European Union. We are the landing strip for all the goods they export through the United Kingdom into the European Union, because it is the fastest way; the alternatives are not suitable for their businesses. It will be exactly the same for businesses in Coventry, in Aberdeen and in Edinburgh South. The hon. Member for Aberdeen South spoke eloquently about the Scotch whisky industry, which we all defend and champion. That industry needs easy access to the markets in which it sells its products, so it too is pushing for as close a deal as possible to the customs union.

[Gareth Snell]

My hon. Friend will be aware that the finest Scotch whisky in the world is sold in ceramic bottles made in my constituency. Exiting the European Union without a proper trade deal will result in not only the price of the whisky but the cost of the bottle going up, which will threaten jobs in my constituency. What does he make of the Government’s proposals so far on market and trade remedies?

[Ian Murray]

I am glad my hon. Friend makes that point because the Scotch whisky industry is not just a Scottish industry. It is a UK-wide industry involving bottling, packaging and delivery companies—a whole UK supply chain. If the main driver of that supply chain, which is the whisky coming out of Scotland, is disturbed, the jobs in my hon. Friend’s constituency are potentially disturbed, too.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Much though I enjoy a decent malt whisky, the impact of leaving the customs union would be far greater. If we take into account the agriculture, defence, aerospace and automotive industries, it is clear that if we do not get this right, the impact on complex supply chains in the integrated European Union marketplace could severely disrupt the UK economy.

[Ian Murray]

That is why the three motions before us tonight, the customs Bill, the Trade Bill and the European Union (Withdrawal) Bill are so important.

[Chris Bryant]

Before my hon. Friend moves on from Scotch whisky, I wonder whether he would like to comment on the fact that when several of us were in Peru recently, Peruvian Ministers asked the British ambassador what we wanted out of a new free trade deal with Peru, post-Brexit, adding that they knew what they wanted: all Scotch whisky to be made in Peru, or at least 40% of it, or at least for the whisky to be bottled in Peru. Does not that undermine the argument made by the hon. Member for Aberdeen South (Ross Thomson)?

[Ian Murray]

Absolutely. My hon. Friend tempts me to go down a road you may not want me to take, Mr Deputy Speaker, but let me at least tiptoe to the start of that road. Not only does the EU give Scotch whisky solid legal protection, but Scotch whisky has to be made in Scotland, and as my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) has highlighted, the supply chain extends across the United Kingdom. We will be competing with markets where bottling and packaging are much cheaper, not only for Scotch whisky but for a host of other manufactured items that this country makes so much money from—money that pays for our public services and creates employment for our people.

While I am on that point, can the Minister tell us what representations he will make in the talks to leave the EU with regard to defending big industries such as aerospace, automotive, and food and drink, which in Scotland is underpinned by the Scotch whisky industry? In the 20 minutes or so in which he spoke and in answer to a lot of questions from my right hon. and hon. Friends, it was clear that HMRC, customs and so on will need more resources. The Government cannot tell us how much more they will require, why they will require them, when they will get them and whether that will be enough. It is very easy for Ministers to talk in platitudes, but we need solid answers on how many people are required and what the consequences will be for the public purse.

[Tom Brake]

Is the hon. Gentleman surprised, as I am, that Government Members seem quite content to recruit 3,000 to 5,000 more people for HMRC, and, as I understand it, 1,200 more people to work for the Home Office—many, incidentally, from the EU, because of a shortage of staff? Was this not about getting rid of red tape? It seems the Government are willing to invest huge amounts in creating more red tape.

[Ian Murray]

That is a key secondary argument to the one I have been making. They say they want everything to be as close as possible: they want it to be frictionless and as close to the customs union as we currently are. My hon. Friend the Member for Walthamstow (Stella Creasy) said that if it walks like a duck and sounds like a duck, it probably is a duck. I do not understand, and have never understood, the Government’s position in taking the single market and the customs union off the table. Regardless of whether we want to argue that they are positive or negative, good for the country or bad, they immediately took them both off the table, so right from the very start the negotiating position was diminished, for all the reasons my hon. Friend has just mentioned.

[Chris Bryant]

Is my hon. Friend aware—he probably is not, because I have not yet told him—that a couple of weeks ago I asked the Secretary of State for Exiting the EU whether a deal like the Canada’s free trade agreement with the EU would be a good deal for Britain. He said, “No, because it would not be as good a deal as the customs union. It would leave us worse off.” I therefore cannot see how one can possibly argue that one should automatically discount staying in the customs union.

[Ian Murray]

That is indeed the case. The Comprehensive Economic and Trade Agreement between the EU and Canada has been held up as a blueprint for what world trade agreements should look like in the future, and we look as though we are just about to walk away from it because we want something better. If there was something better, I am sure Canada and the EU would have negotiated it. I was aware of my hon. Friend’s question, because I was sitting behind him when he posed it to the Secretary of State for Exiting the EU during Brexit questions. I thank him for his intervention.

I would like to set out the three reasons why I tabled my amendments. The first reason chimes with what my hon. Friend the Member for Bootle (Peter Dowd) said from the Opposition Front Bench about Parliament having a say. “Taking back control” became the strapline for the leave campaign during the EU referendum. If taking back control is truly what we wish to do—I think that it is what the public wishes us to do—it should surely mean taking back control for this Parliament. Whether through the European Union (Withdrawal) Bill, which is going through the House at the moment, this Ways and Means motion or the customs Bill when it is published, Ministers will hold the power to do anything they want, carte blanche—on trade, tariffs, immigration and removing us from the EEA and the customs union—without any recourse at all to this House.

In the past six weeks or so, the Government have been championing a meaningful vote—whatever a meaningful vote would mean—that would be neither meaningful nor even a vote. The Government’s position on what it means is never the same from one day to the next. Indeed, a couple of weeks ago they made three clarifications on one day, with the Secretary of State and the Prime Minister saying contradictory things. Their spokespeople had to correct what they had said, as they had both been incorrect.

We need greater clarity from the Government, rather than platitudes from the Minister, on what they want to do. Lord Callanan has had to make two statements to correct what he said about article 50 in the other place just a few weeks ago. We need answers to these questions. Opposition Members are very doubtful about whether we can trust a Government who say, “We’ll take the power. We may not use it. We may use it. We need to use it. We need to have it in case we want to use it, but trust us everything will be fine.” Unfortunately, trust has to be earned. The Opposition are being told clearly that they cannot trust the Government to do things properly on our behalf, because they are not able to do so. My first point, therefore, is to ensure that that power is not held by Ministers. We should give Parliament a say if we truly want to take back control.

That leads on to my second point. Nobody in this House, when we get to the end of this process, will ever have voted on leaving the customs union. Nobody will ever have voted on leaving the single market. Nobody will ever have voted on leaving the EEA. The people of this country voted to leave the European Union. When we start to work through the process and see how complicated it is—how difficult it could be for businesses, and all the challenges, barriers and hurdles that will be put in place—it is quite clear that nothing can be as good as what we have at the moment. Whatever happens, there will be losers, but nobody voted to be poorer. It is wrong for the Government to bring this motion on excluding tariffs with the European Union, because nobody has yet voted for us to leave the customs union. The customs union is vital to this country and not just for businesses on the UK mainland—I will come on to comment on the island of Ireland shortly.

My third point, and the main reason why the motion should be defeated or at least amended, is that the Government are clearly preparing for no deal. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said that a former Minister will make a speech tomorrow saying that the Government should be persuaded to prepare for no deal. It seems that the talks are stalling. The clock is still ticking, but they seem to be no further forward. The Brexit Secretary and the Foreign Secretary seem to have the attitude that we can wrap ourselves up in a Union Jack, ride the waves like Britannia used to and everyone will listen to us. That is the sort of 19th century British arrogance that created many of the problems in the world today. Everything the Government are putting through Parliament is being done on the basis of preparation for no deal, which would be utterly disastrous for this country.

I am very grateful to Mr Speaker for selecting my amendments. Let me tell the House why no deal would be disastrous and why I tabled them. We have heard many Members talk about that economic impact. Our annual goods trade with other countries within the customs union is £466 billion. It has been estimated that leaving the customs union would cost £25 billion every year until 2030. If the Opposition brought a proposal to this House for the Government to consider that cost £500 billion and £25 billion every year, the word “bankruptcy” would be coming out of the Minister’s mouth every second minute. It would be irresponsible for us to do that, yet that is what is being proposed with the customs Bill and this motion.

The cost of new tariffs alone could be at least £4.5 billion for UK exports, according to detailed research, and analysis by HMRC suggests that new customs checks could increase the cost of imported goods by up to 24%. We have already had reports that there will be 17-mile tailbacks at ports across the United Kingdom. I wonder whether the Minister can remember the French customs strike and how long the queues were. They formed very quickly and the impact on local communities, let alone the perishable goods sitting in trucks, was devastating. It is okay for the Minister to suggest that we will have so many customs border checks and that we will pushing things through as quickly as possible, but the way to resolve the situation is to stay in the customs union.

[Angela Smith]

A humble bottle of fabric conditioner crosses the border of a member state four times in the process of its manufacture. Imagine how many times the components that make up a Rolls-Royce jet engine cross the border—thousands of times. On that basis, how can this country’s economy afford to even think about leaving the customs union?

[Ian Murray]

I am grateful to my hon. Friend. If I were the Minister and she made that point to me, I would just say, “It’ll be okay. We want something that’s as close to the customs union as possible. It will be frictionless. It will only take seconds. We’ve got new technologies”, but the Government are not spelling out what those are, how they will work or how a company such as Rolls-Royce, exporting and importing goods and parts all the time, would actually operate. It seems that we have to take this on trust. Well, many of the businesses around the country need certainty, because they will be making decisions very shortly about the years ahead.

[Stephen Doughty]

Further to the point from my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), Simon Hemmings, one of the chief negotiators for Rolls-Royce at its manufacturing site at Derby, told the Financial Times:

“If we are not in the customs unions there will be job losses”.

We could not have it clearer than that.

[Ian Murray]

I am grateful for that intervention. I said earlier that nobody voted in the EU referendum to be poorer, yet all the analysis shows that we will be. I would be delighted, if the Minister wants to intervene, if he can point to any analysis done internally, externally or otherwise—by any other Government in any country, any think-tank, any organisation, any business organisation, any individual business—saying that what the Government are offering will make the country better off. I will let him intervene now—I know he is listening; he is just pretending to ignore me. The answer is: absolutely none. The silence is deafening. Not even the producers of our microphones will make more money, because the Minister refuses even to use his to point to just one organisation that says our position will be even remotely similar once we have left the EU. The answer is clearly none. The Government are on the wrong track and gambling everything—the family silver, everything—on a no-deal scenario.

On the impact of our leaving the customs union, I want to deal with a few particular sectors. My hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) mentioned the automotive sector earlier. The Society of Motor Manufacturers and Traders, which is an organisation whose briefings on Budgets and Bills we, as parliamentarians, trust and which I always read with great interest—it is the knowledge in motor manufacturing —has said that going off the cliff and moving to trading on WTO rules would see a 10% tariff on vehicles and an average 4.5% tariff on car components. These figures have been repeated in the House ad nauseam. It also said it would push the cost of an average car up by £1,500. We have already heard figures recently showing new car sales and levels of new car manufacturing dropping dramatically. I think that most people considering whether to buy a new car would decide not to if they knew it was costing an additional £1,500. I appreciate that the Minister does not agree, but I am more likely to believe the SMMT’s figures than the Government at the Dispatch Box saying, “Don’t worry. Everything will be all right on the night”, without giving us any detail about how that could possibly operate in the context of no customs union and no customs arrangements.

[Sir Edward Leigh]

Is the hon. Gentleman happy, then, for us to be locked for all time into a situation where we can never make a free trade deal with any country, bloc or anybody outside the EU, locked into a body with a declining share of trade and locked out of free trade deals with the growing markets in Asia and America? He is happy with that, is he?

[Ian Murray]

I am happy with the intervention—I am delighted with it—because it allows me to say three things: first, the reason the Scotch whisky industry is doing so well is partly because of EU free trade arrangements, particularly with countries such as South Korea; secondly, we are already in 57 free trade agreements; and thirdly, the hon. Gentleman’s Government have failed wholeheartedly to start to negotiate just one free trade agreement, despite all the bluff and bluster about being at the front of the queue, about their happening easily, about our seamlessly entering into these wonderful free trade agreements all over the world.

I say also to the hon. Gentleman that his intervention completely contradicts his first intervention. If he votes against my amendment and we end up trading with WTO rules, and we end up without tariffs with the EU, we will have tariffs with no one and we will ride the waves—rule Britannia—setting up more than 57 free trade agreements with every country banging at our door to trade with us. He is not listening to his Foreign Secretary or Trade Secretary when they say this is becoming much more difficult, if he thinks that free trade agreements with more than 57 countries will just appear as low-hanging fruit from this magic money tree the Government seem always to produce.

[Gareth Snell]

To pick up on the point from the hon. Member for Gainsborough (Sir Edward Leigh), of course free trade is to be welcomed, but in certain sectors, such as the ceramics industry, what we need is protection against the illegal dumping of tiles and white goods, which affects our industry and puts our jobs at risk. In some sectors, the unilateral free trade and open markets that some talk about would harm employment and make my constituents poorer.

[Ian Murray]

Absolutely. Illegal dumping is something that the House will have to come back to and debate at length, because it is one of the key issues around what might happen when we leave the EU and do not have that bloc to defend us. On my hon. Friend’s point about free trade, I have a great idea for how to advance free trade in this country: we could have a customs union and a single market, and that would certainly advance free trade, would it not? Or we could come out, as the hon. Member for Gainsborough wants, and end up with no free trade agreements, rather than 57.

I wanted to mention a whole list of sectors, but I will not in the interests of time. I will briefly mention two or three of the very big ones that have raised concerns. Pharmaceuticals is a key area bringing a lot of tax and corporation tax into the public purse. The Association of the British Pharmaceutical Industry has called for free trade with the EU on terms

“equivalent to those of a full member of the Customs Union”.

I would rather believe the pharmaceuticals industry, an industry that has brought so much economically—in terms of jobs and growth—than the Minister, and it says it wants free trade on terms equivalent to those of a full member of the customs union. Well, the Government will be ruling that out tonight when they pass the motion, so what will he say to the pharmaceuticals industry, which says it needs it to trade as it does now?

[Tom Brake]

Would the hon. Gentleman like to speculate on what contribution today’s departure of the European Medicines Agency to Amsterdam has made to our pharmaceuticals industry?

[Ian Murray]

Well, it is jobs, isn’t it? [Hon. Members: “Nine hundred jobs.”] Yes, 900 jobs, and maybe even more, if we include the knock-on effect. So the Government have just given up 900 jobs; that is the start—the tip of the iceberg. If the pharmaceuticals industry cannot get equivalence with the current customs union, how many more jobs will go in that industry? Before everybody says, “Oh, you’re just a remoaner”—

[Kwasi Kwarteng (Spelthorne) (Con)]

Yes, you are.

[Ian Murray]

Well, if being a remoaner means defending the jobs of the people of my constituency and the country, I will buy a badge—perhaps the hon. Member for Spelthorne (Kwasi Kwarteng), who is chuntering away over there, could get me a badge. I am a proud remoaner. It means caring about jobs, not giving up on them.

[Kirsty Blackman]

I am loth to interrupt the hon. Gentleman’s excellent speech, but I am slightly concerned that he keeps talking about the views of experts. We know that Government Members are not keen on the view of experts. Does he think they might listen this time?

[Ian Murray]

I can answer the hon. Lady’s intervention in one word: no. They clearly are not going to listen to the experts on these issues. In fact, they have sown the seed of doubt that none of us should listen to experts, and the country will be much diminished as a result.

I want to touch on two more sectors. The chemicals sector is another key driver of the UK economy. We have a great chemicals sector—one of the key chemicals sectors across the EU—and it has said that

“the best way to guarantee no adverse disruption to business and trade…and to guarantee only one adjustment before reaching a final agreement with the EU, is to seek to retain our existing membership of the Single Market and Customs Union”.

So we have the automotive industry body—the one we all trust—and the pharmaceuticals sector, and we now have the chemicals sector, yet the Minister has come to the Dispatch Box and said, “Don’t worry. We’ll put more people in place to help all this along”. I suggest that the customs union might be an answer to this particular question.

I will finish with the shipping sector—the very sector that takes the goods from these islands to the continent. The UK shipping sector has warned that the UK is facing an “absolute catastrophe” if it does not sort out a “frictionless and seamless” border at Dover and other ports. The Government keep talking about a frictionless and seamless border but cannot tell us what it means. I suggest that the best way to maintain or enhance the border—to make it frictionless and seamless and operate as a single market—is to maintain our status in the customs union.

If we were starting from scratch—with a blank sheet of paper—and seeking to determine the best way for an island nation to trade with other nations, it would be to have a customs union with those nations. Under such an agreement, we would not need to use the word “frictionless”, because there would be absolutely no friction at all, and it would be completely seamless. The best way to highlight how seamlessly and how frictionlessly a single market and a customs union can operate is to look at the markets between Scotland, Wales and England. They have a completely seamless border: they are completely free market, completely single market, completely customs-free.

I am delighted to see that the Secretary of State for Environment, Food and Rural Affairs has joined us. At the time of the referendum, he claimed, along with me—and I have said this to his colleague the hon. Member for Aberdeen South—that one of the key arguments against an independent Scotland was the lack of a border at Berwick. Now he is arguing the opposite in the context of Northern Ireland and the island of Ireland. That is completely contradictory, and he cannot tell us how it will be resolved. How could it not have been resolved in the Scottish context?

As a member of the customs union, the UK is party to preferential trade agreements. We want to walk away from those agreements, and make our own. It is likely that, outside the customs union, the UK would need to renegotiate many, if not all, of those agreements with those who would become third parties. It is not as easy as just rolling over those agreements, which is what the Government seem to want to do.

I am conscious of time, Mr Deputy Speaker, so let me move on a little. I want to talk about Northern Ireland and the Republic. [Interruption.] I know that the Government do not like to hear these arguments, because they have no answers to them, but I think it important for them to be highlighted in the House. If the Government can provide only limited time for the European Union (Withdrawal) Bill, they may as well rehearse some of the arguments today. We have until 10 pm, after all, and if the hon. Member for Gainsborough (Sir Edward Leigh) wants to intervene and waste time, he is more than welcome to do so.

We have already talked about the massive queues at our ports, airports and rail terminals. Now, as I have said, I want to say a little about Northern Ireland and the Republic. The Foreign Affairs Committee visited Dublin and the border on Thursday and Friday last week to consider the consequences of our leaving the European Union. Let me say again to the Minister that if he wants to name any organisation in either Northern Ireland or the Republic which thinks that Brexit will be good for the isles of Ireland, let him please do so, because I have not heard of any, and am unlikely to hear of any. In fact, the only two people I heard supporting our withdrawal from the customs union and the single market in the context of the isles of Ireland were the two Brexiteers on the Foreign Affairs Committee. Some of the words used were “catastrophic”, “irreconcilable” and “unsolvable”.

I simply cannot understand how the Minister can table motions such as this to pave the way for major Bills without having the basic answers to these questions, while using meaningless phrases such as “frictionless” and “seamless”. I am very concerned about the Belfast agreement, or Good Friday agreement, which is underpinned by the European Union, underpinned by a seamless border, and underpinned by a single market in the island of Ireland. It is almost impossible for the Government to reconcile wanting no borders, and frictionless and seamless trade, with the route that they are taking with a non-deal Brexit.

I have another suggestion, which the Minister may recognise. The way to have a seamless and frictionless border between Northern Ireland and the Republic is the customs union. That would mean that trade in goods could go across the border, unfettered, seamless, and I may even push it to frictionless, which is what the Government have been saying all along.

Our Committee travelled from Cavan—Cavan County Council hosted us on Thursday evening—to drive on to the motorway back to Dublin. It is a distance of about four and a half miles, and we were in a minibus. We crossed the border seven times just to travel a short distance. That is irreconcilable. Many people in Northern Ireland and the Republic who spoke to the Committee—and I am sure that the Minister will be pleased to read its conclusions when they are published—said that it was intellectually incoherent to argue that it was possible to have no border while requiring a border. It is not possible to have frictionless and seamless trade while having to check goods, and it is not possible to have a border at sea level while trying to ensure that the Good Friday agreement is maintained.

Former president Mary McAleese spoke to us in great depth about the passion for the Good Friday agreement. Let me say to the Minister and the Government, in all seriousness, that they ruin that agreement at their peril. It is something of which everyone should be incredibly proud. The way in which the Government are going about the Brexit negotiations, the way in which they are treating the border between Northern Ireland and the Republic, the way in which they are fooling the public that it is possible to have everything and not have everything, is indeed wrong. Michel Barnier, the chief negotiator whom we all know so well now, has said to the Government, particularly in relation to the issue of Ireland, that they cannot have their cake and eat it. Something will have to give, and that is why I tabled the amendments. The Minister must think very seriously about that physical border.

Let me end by saying a little about the Labour party’s position. I think that we are right on this issue, and our position is written into the documents that we have here. We want to stay in the customs union, if possible. I agree with my hon. Friend the Member for Bootle, who tabled the amendments about parliamentary scrutiny. We should always press such amendments, because the Government, who talk of taking back control, are not giving control to Parliament.

All the issues relating to Ireland, to trade, to tariffs and what will happen in the future, to jobs, to borders and to tailbacks at customs can be resolved if the United Kingdom at least leaves on the table—regardless of whether we agree—the possibility of remaining members of the single market and the customs union. That would take away all these concerns. When we reach the end of the process, whether or not there is a meaningful vote in this place, the Minister and his Government will know when the jobs start leaving this country, when borders start being erected, when customs becomes more difficult, when trade becomes much more difficult, when public services become much more difficult to fund, when debt rises and deficit rises, that his Government have let the people down by not telling them the truth about the consequences of leaving the single market and the customs union.

That is why I tabled my amendments, and I hope that many of my right hon. and hon. Friends will join me in the Lobbies.

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[Tom Brake]

Presumably they would have no difficulty in smuggling their cake from one side of the border to the other.

If some of those 275 border posts were closed down, many issues would ensue. I have heard examples of graveyards with entrances on both sides of the border, and of children going to school and people going to work across the border from where they live. If border crossings were closed, as happened during the troubles, that would be a major issue for Ireland and Northern Ireland. If I were to speak for the next couple of hours, that might give the Minister time to work out what the solution is. Clearly there is not one yet, but perhaps that would enable him to go away and find one.

[Ian Murray]

I am delighted that the right hon. Gentleman is making these arguments about the Irish border. This is not just about a physical border; it is about what this says symbolically. There has been no border on the island of Ireland since the troubles, and the symbolism of reinstating one should be avoided at all costs.

[Tom Brake]

The hon. Gentleman is right, and I thank him for pointing me in that direction. Clearly, there would be substantial economic problems associated with a border, but the fundamental problem would be the message that would be sent out to those who want to cause trouble, if there were to be a British presence on the border. That would be a step in the wrong direction in terms of a united Ireland and it could give such people a reason to resume the troubles. That is the major risk, which is probably why the Government and the European Union are both saying that progress is being made. No one wants to admit that this remains a problem without a solution, because of its potential to generate trouble.

I have referred in interventions to the port of Dover. Many Members will have visited it, as I have done, and I certainly recommend it. The first thing to know about the port of Dover is that it is not really a port. The port authorities clearly state that it is in fact a bridge. I have stood in the control tower and watched the trucks flowing virtually seamlessly—that is an interesting word; perhaps the Government could look at how things operate there—on to the ferries. They slow down and go into channels and if they are lucky they can drive straight on to the ferry while the trucks coming into the UK are being unloaded from the lower deck. There is nothing to stop those trucks getting on to those ferries. They are not booked on to a specific ferry; they just turn up and drive on to whichever one is there. The only checks that the UK is carrying out on trucks coming into this country are related to smuggling, and they are done on the basis of intelligence, rather than, for example, on the basis of checking one truck in every 100. That is why the system flows smoothly.

--- Later in debate ---

[Anna Soubry]

Exactly—somewhere equally pleasant.

The pleasure I have in speaking in this debate is primarily this: the fact that we are actually having a debate and, moreover, we are actually having a vote. We are providing this House and this place at last with an opportunity to have a real and meaningful say in the future of our country, which has been denied within this place ever since 23 June 2016. If only the Government had at that time—I can understand why in many ways they could not—looked to build a consensus and to find what elements united us far more than had divided us during the EU referendum debate, we would not be in the unholy mess we are undoubtedly in today. As this Brexit reality or nightmare begins to dawn increasingly on the people of this country, we see that this scenario of either deal or no deal is not the real option facing the British people. We are being painted the idea of the hard Brexit as something that we should prepare for, and although it is right of the Government to be responsible and examine that, the reality is that we are more likely than not to not get a deal.

Not only are all the things the Prime Minister promised and said she did not want—no deal—likely, but in quarters of this place some people are positively urging and welcoming that. I find it utterly perverse and bizarre that my party, the party that has always been so proud to be the party of business, is increasingly being seen as the party that no longer represents business in this country. Let us be absolutely clear: the overwhelming majority of businesses, not just in Broxtowe, but the length and breadth of this country, do not want a hard Brexit. This is not just a choice between a hard Brexit—that no deal—or a bad deal, because there is a third option, one that has not even been debated and until tonight has certainly not been voted on. I refer to this third way; tonight we are talking about the customs union, but in my view this also includes the single market.

I am not going to repeat the excellent arguments advanced by the hon. Member for Edinburgh South, but I absolutely endorse all the arguments he made and the interventions that he took from other hon. Members who also see the value of the customs union. It delivers what I think the British people want. Overwhelmingly the majority of people in this country are thoroughly cheesed off with the whole darned thing; they are fed up with Brexit. They are fed up with the arguments and the squabbling. I am going to be blunt about it: they are getting fed up with a Government who have still not worked out what their policy is for the transitional deal or for the final deal. Some might say that that is shameful, given all the time that has progressed since we jumped, as I fear we did, into triggering article 50. Some of us—my goodness, we know how we got all the attacks for having said this— did caution the Government, saying, “Please don’t trigger article 50 until at least the Germans have had their elections and that stable Government have been put in place.” I get no pleasure in saying how right we were to put that caution forward. The British people are looking at all of this, they are fed up to the back teeth with it and they want us to get on with it. I do not demur from it—we should get on with it—but not in the way that a small ideological group of people, mainly in my own party, I am sorry to say, are now urging the Government to do: by leaping off the cliff and getting no deal.

[Ian Murray]

When the history books are written about this period of time, the right hon. Lady’s name will be prominent for trying to pull her own Government back from the brink, so we all appreciate the work she is doing on this. We have heard all the arguments tonight, and I, too, am delighted we are debating the customs union. The Government are suggesting a frictionless and seamless border and frictionless and seamless customs arrangements, so does she agree that the best thing they could do to deliver that is to stay in the darned thing?

[Anna Soubry]

I could not agree with the hon. Gentleman more. That is what the people need to understand now: there is this third option. There is this other way of getting a Brexit. We would be out of the European Union, so we would have satisfied the 52% of voters on that, but we would deliver what everybody wants, which is the best possible Brexit that is in the interests of everybody in this country, with the economy, jobs and prosperity right at its heart. This would solve the problem that Northern Ireland faces and that Ireland faces, because we would keep the customs union.

--- Later in debate ---

[Anneliese Dodds]

I just have, if the hon. Gentleman doesn’t mind. The Government have stated that the motions are about that future relationship, and so we have to take them at their word, even if we might have been mistaken in doing that on other issues.

It has been suggested that, if the Government recover a sense of responsibility and sincerity and genuinely engage us in negotiations, albeit after wrongly ruling out a customs union with the EU, it could involve the adoption of deals similar to CETA or the Turkish deal. Now, CETA does not cover agriculture, so if we get a deal on industrial goods procurement and so forth, we might then need, concomitantly, still to have a deal on the protection of sensitive agricultural products, so we would need to have those powers still there. The Turkish bespoke deal, for its part, still necessitates anti-dumping and countervailing duties on both the Turkish and the EU sides.

To conclude, we have to be clear about what amendments (e) and (f) ask for. They do not, in and of themselves, guarantee that the Government will seek continued customs union membership, because they would apply across the piece of whatever arrangements the Government lead us to.

[Ian Murray]

I have tremendous respect for my hon. Friend and the work she has done on this, but if she disagrees with the technical aspects of my amendment but agrees with the principle of staying in the customs union, where are the Front-Bench amendments to do that?

[Anneliese Dodds]

I am a new Member and I do not know how appropriate it is to talk about which amendments have been allowed and which have not. Ultimately, we are seeking a more democratic process, but we cannot vote on that, which is unfortunate. My hon. Friend will know, as will other Opposition Members, that, as I stated before, the Labour Front-Bench position is to leave all options on the table. That is the best thing for Britain to do. It is very unfortunate that the Government have failed to do that, because it is enormously damaging to our negotiating position. I very much regret that the Government still could, irresponsibly and recklessly, lead us towards a no-deal scenario. In that case, these amendments—sadly—would worsen our situation. I know that that is not his intention—quite the opposite—but as stated that is technically what they would lead to.

Taxation (Cross-border Trade) Bill

Ian Murray Excerpts

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

[Mel Stride]

The opportunities will be very significant indeed—[Interruption.] If the hon. Lady will allow me, I will attempt to answer her question. Of course our trading relationship with Europe is extremely important, which is why we are having negotiations with our European partners. It is important to us and to them to ensure that we maintain those relationships to the highest degree. However, a growing percentage of our trade is now taking place outside the European Union—certainly more than was the case five or 10 years ago—and the expanding markets of the future are not necessarily going to be the countries that constitute the membership of the European Union. To answer the hon. Lady’s question directly, the opportunities lie out there in China, India, the United States and other countries around the world with which we will be able to forge a freer set of trade agreements than we have been able to contemplate during our membership of the European Union.

[Ian Murray (Edinburgh South) (Lab)]

The Minister continually uses the word “frictionless” and talks about keeping things as they are now. Indeed, the Bill will facilitate our keeping the customs union regulations as they are at the moment, so what principle are the Government using to take participation in the customs union off the table?

[Mel Stride]

This comes back to the fundamental point that on leaving the European Union we will be leaving the customs union. Then it will simply become a question of what kind of relationship we negotiate with the EU and its customs union. The Government’s position is clear on this. We want these arrangements to be as frictionless as possible. We want to facilitate trade rather than putting barriers in the way of what will be a European customs union of 27 nations after Brexit.

Taxation (Cross-border Trade) Bill

Ian Murray Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Speaker]

The right hon. Lady used commendable brevity, upon which I congratulate her.

[Ian Murray (Edinburgh South) (Lab)]

It is a great privilege to follow the right hon. Member for Witham (Priti Patel). We sit on the Select Committee on Foreign Affairs together and agree on much of its work. However, I am afraid that we agree on nothing when it comes to Brexit, and we have those battles in the Committee.

It is unfortunate that we have been left here this evening with a set of four amendments from the group of Conservative rebels who want to take us off a cliff edge. That is what the amendments are designed to do. We have unconfirmed reports that the Government may accept the amendments. I do not know whether the Financial Secretary to the Treasury will nod to indicate that he will accept them, but if he does, I hope he has a match or a lighter in his pocket, because he would do just as well to set the Chequers agreement alight, given the consequences.

On top of all that, the former Secretary of State for Exiting the European Union, the right hon. Member for Haltemprice and Howden (Mr Davis), must now regret leaving the Government, given that after threatening to resign five times, he finally went through with it by resigning following the Chequers agreement, which is just about to be ripped up by his own Front-Bench team and replaced with a much more hard-line position that will take us off the cliff with a hard Brexit. If he had only stayed on a few more days, he may have been able to see through the proposals that he started.

[Mr David Davis]

rose—

[Ian Murray]

I am happy to give way to the right hon. Gentleman, given that I mentioned him.

[Mr Davis]

I rise just to tell the hon. Gentleman that nearly everything he just said in that sentence is untrue.

[Ian Murray]

I am delighted to hear that he would have resigned regardless, but he must surely have some regret. Perhaps we should be glad that he resigned, given that he stood up in this Chamber, as a former Secretary of State, and tried to persuade the House that Operation Stack and having trucks and lorries queued up at our ports was positive for the country. I have never known a former Secretary of State to look at something like Operation Stack, which would be a tragedy for our economy had it continued for much longer, and turn it into a positive. If that is the kind of argument he is offering to this House and to the country, we should ensure that we vote down most of these amendments.

I find it extraordinary that after going through this process—these debates give me déjà vu—we are still hearing arguments about the customs union and the single market. The Government managed to botch together what is now called the Chequers agreement and now, a week away from this Parliament adjourning for the summer recess, they have completely torn it apart by again pandering, as the right hon. and learned Member for Rushcliffe (Mr Clarke) said, to 30 or 40 people on the hard right of the Conservative party. Those people would be being much more honest if they just stood up and said that they want the cliff-edge hard Brexit, rather than tabling amendments that drive a coach and horses through the agreement that the Government managed to reach.

[Craig Mackinlay (South Thanet) (Con)]

Is the hon. Gentleman really suggesting that the 163 independent members of the WTO are somehow teetering on a cliff edge or doing something rather odd? Are they not just normal trading nations that trade freely with each other? I find his “cliff edge” statement rather peculiar, because it does not treat the facts.

--- Later in debate ---

[Ian Murray]

I will tell the hon. Gentleman who is teetering on the cliff edge: the 10,000 or 12,000 people in my constituency who work in the financial services sector. The advice and analysis that we have had from the hon. Gentleman’s own Government’s Treasury is that staying in the customs union and the single market is the least worst option, and that the WTO route that he suggests would leave this country teetering on the edge of a GDP reduction of somewhere between 9% and 16%, depending on the part of the country. If that is a positive argument for taking us out of the EU, the country needs to be given a people’s vote on whether we are going down the right track.

The right hon. Member for Broxtowe (Anna Soubry) moved new clause 1. She did not really mention new clause 12, but it presents a customs union option that could provide a platform to unite the vast majority of this House. When the Division bell rings for the votes on new clause 36 and amendment 73, I agree with the right hon. and learned Member for Rushcliffe that we should all go into the Lobby against them to show how many people in this House actually want to protect this country’s future prosperity and how many want to take away any future prosperity for their own narrow ideological needs. I say to my own Front-Bench team that when the Division bell rings I hope Labour votes against those amendments and makes a stand against what the hard-line right-wing Brexiteers are trying to do to our country.

There is absolutely no way we can achieve frictionless trade—what the Government want us to try to achieve—while putting in place policies that set hurdles in front of it. The amendments would mean no VAT alignment, but if there is no VAT alignment, there is no backstop. If there is no backstop, there is no withdrawal agreement. If there is no withdrawal agreement, we have to have a hard border between the Republic of Ireland and Northern Ireland. If that is the aspiration behind some of these amendments, we will in the future have to take a long hard look back at this point, when we are about to inflict the single largest act of self-harm to this country, to see what people were actually trying to achieve. The introductory remarks of the right hon. Member for Broxtowe on new clause 1 sum that situation up. She was attacked with pretty disgraceful remarks from some in her own party, but she was merely trying to put forward an argument that would prevent this country from doing economic damage to itself. What a remarkable thing to happen.

We have two Bills in front of us this week—tonight’s Bill and the Trade Bill tomorrow—and all the Government have to do is keep the customs union and the single market on the negotiating table. New clause 12 does not mean that the Government have to implement anything; it just asks them to keep the proposal on the table. That is what would be in this country’s best interests. I agree with the right hon. Member for Broxtowe that this Minister is one of the best in the Government. I disagree with the vast majority of things that he does, but he is courteous, intelligent and always answers questions in the best way possible. He cannot honestly be sitting there this evening ready to accept the four amendments thinking that that would be in the best interests not only of the country, but of the Chequers agreement that the Prime Minister managed to cobble together last Friday. We need Government Front Benchers with a bit of backbone to stand up for the interests of this country. By the time we go into the Division Lobby very late on Tuesday night to pass the Trade Bill—after the customs Bill before us has been passed—Government Front Benchers could then say that they have stood up to the hard right of this country and stopped economic Armageddon, and that they have done the right thing.