Taxation (Cross-border Trade) Bill

Jacob Rees-Mogg Excerpts

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

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

The hon. Gentleman misunderstands amendment 73. One of the other amendments, which the Government have also accepted, would stop them having a Henry VIII power for a new customs union. If a new customs union were to be introduced by legislation, amendment 73 could be brought in under that customs arrangement. It simply retains power for this House.

[Mr Leslie]

We have got the hon. Gentleman’s measure now. He used to be an entertaining curiosity, but no longer. He represents a major present threat to the future of our economy and our constituents’ jobs. He is trying to scupper our smooth frictionless arrangements for businesses that currently have to pay VAT but can do so because we treat it as a matter of dispatches and arrivals, rather than its having to be paid upfront. By deleting paragraph 14 of schedule 8, the hon. Gentleman would hole future VAT arrangements below the water line.

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[Mr Speaker]

Order. Several Members, all on the same side of the House, wish to speak. I suggest that the time limit be now reduced to four minutes, but it is not obligatory for Members to consume all four.

[Mr Rees-Mogg]

May I first thank my right hon. Friend the Member for Putney (Justine Greening) for making what I thought was a remarkably gracious speech, in quite a fevered atmosphere, and for putting both sides of the case so generously and kindly?

I want to speak to the four new clauses and amendments that I have supported and, in most cases, put my name to. They are broadly in line with Government policy, which is why the Government have accepted them. New clause 37 relates to the Northern Ireland question. It is clearly Government policy that Northern Ireland should not be removed from the rest of the United Kingdom, and I think that to put that in legislation would be beneficial.

Amendment 72 relates to Henry VIII clauses. I agree with my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve)—or “beacon’s field”, as Benjamin Disraeli pronounced it—that we should not have Henry VIII clauses if we can possibly avoid them, as they are not good legislative practice. The fewer Henry VIII clauses we have, the better. I confess that I would have supported my right hon. and learned Friend in earlier Bills had I not thought that, in so doing, I would have caused suspicion on the other side of the European debate, with people wondering what on earth I was up to. However, I am very pleased that Henry VIII clauses are becoming less popular in the House.

Amendment 73 has been a topic of discussion in relation to no EU VAT regime. This is actually Government policy, as set out by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs on “The Andrew Marr Show”, when he said that once we had left the European Union we would not be part of the EU VAT regime. The difference here is between acquisition VAT and import VAT. Import VAT is the normal way we charge VAT on third countries outside the European Union, whereas acquisition VAT is an EU system. Therefore, if we are leaving, it makes absolute sense to be out of this, and that fits with what the Government have said.

[Mr Leslie]

I do not quite see how the hon. Gentleman can say that that is compatible with the Government’s policy, given that the Chequers White Paper, which was published only last Thursday, states:

“To ensure that new declarations and border checks between the UK and the EU do not need to be introduced for VAT and Excise purposes, the UK proposes the application of common cross-border processes and procedures for VAT and Excise”.

How is his proposal in any way compatible with Government policy?

[Mr Rees-Mogg]

I can merely appeal to how this was set out by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, who said that we would not be part of the EU’s VAT regime. VAT is not collected at the border; it is collected via statements from people who import and then send in returns in relation to their VAT. This would enforce a uniform system across all our VAT collection—that is the purpose. If a Minister states that that is Government policy, it is good enough for me, and if it is Government policy to have that in law, it seems quite sensible. Therefore, not having a clause that is contradictory to Government policy simply flows from that.

I want to focus on new clause 36, which has attracted the most controversy in this debate. The importance of the new clause is that it would actually allow the Government to run their trade policy. Trade remedies, which were mentioned by my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), would not be possible if the new clause were not implemented, because that position would simply allow for goods to be imported into the UK via other EU member states and not subject to any anti-dumping measures that we might have taken.

Right hon. and hon. Members might be aware that in 2016 we bought £42 billion-worth of imports from Holland and £26 billion-worth of imports from Belgium. That was not entirely clogs and chocolates; it was, in fact, re-imports of goods that had come through the major ports in the low countries and through to the United Kingdom. That is a major gateway of goods into the EU that then come to the UK. If we have our own trade policy, we must be able to ensure that those goods are subject to our duties, in terms of revenue collection and protection, but also in terms of anti-dumping measures, if we choose to take them. Otherwise, we would find that we were simply following anti-dumping measures implemented by the European Union and had no independent policy.

The point of reciprocity also seems to me to be fair. If we are to say to the European Union, “We will collect your taxes and remit them to you,” that is potentially a large amount of money to be sending to the European Union, giving up all the duties that would fall to us as a result of goods entering the 27 remaining member states. Should we really be affording to do that? What is happening to that revenue, in terms of our independent trade policy, not if we want anti-dumping measures, but if we want to lower prices?

[Several hon. Members rose—]