EU Withdrawal

Lord Cope of Berkeley Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Cope of Berkeley (Con)]

My Lords, I cannot comment on the reflections of the noble Lord, Lord Taverne, on the Labour Party as I am not sufficiently knowledgeable of its manoeuvrings. I have not yet spoken in this series of debates, so I will start with a staccato summary of my general views on the subject before coming to particular points.

Like my noble friend Lord Cormack, I do not care for referendums, but we voted to hold it. I campaigned and voted to remain in both 1975 and 2016. However, I accept the result. There are times in life when things change, and one simply has to come to attention, turn and march forward in the new direction, making the best of it that one can. Change can come suddenly, as when one loses an election—some of us have had experience of that—or it can creep up more gradually like old age, and some of us are experiencing that now. Either way, you accept it. A third referendum would not be wise. People talk of a second referendum, but of course it would be a third referendum on the same subject. Of course, those who think that the present result was unacceptable want to try again, but whoever lost a third referendum would want a fourth. The idea that it would settle the matter is wrong. It will be many years before history can judge whether or not it was the right decision. I suspect that in future many PhDs will be earned by academics arguing both ways. The judgment will depend, of course, among other things, on what happens to the EU in the coming years, as well as what happens to Britain.

Like my noble friend Lord Howell of Guildford, I believe that so-called alternative arrangements can be found so that the borders—both the land border in Ireland and our sea borders in south-east England—can remain much as they are now. From the trade point of view, it is the customs authorities which will organise that. We had a stark warning from the noble Lord, Lord Wilson of Dinton, about the stress on the Civil Service at the moment, and I firmly agreed with that part of what he said. I base my conviction that alternative arrangements can be found on my dealings, as Customs Minister many years ago, with the late lamented King’s Beam House, then the headquarters of customs. There had been a series of organisational changes since then, but I doubt that they have led to better practical advice to Ministers—I fear the opposite.

The former proud department of Her Majesty’s Customs and Excise, with all its experience, was merged with the Inland Revenue in 2006. Then in 2008, the Border Agency was created under the Home Office, and took over the border duties at ports, airports and the land border, and the customs cutters with them. Its responsibilities for immigration work, given the problems, were the main concern of management and Ministers at that time and since. These days, port, airport and cutters officers belong to the Border Force under the Home Office, whereas taxation officials collecting VAT, excise duties and so on are mostly inland and come under a different organisation.

We all know that tax, particularly VAT, excise rates and coverage, differs sharply between the United Kingdom and Ireland and between the United Kingdom and our continental neighbours. This makes smuggling at land and sea borders worth while if you can get away with it. Supplies for personal consumption are taxed in the country of purchase, so people in Northern Ireland cross the border to buy things without problems, and the same applies at Dover and elsewhere. That should not change. On the whole, smuggling is effectively countered by the relevant agencies in the various countries co-operating, and there is every reason why, if customs duties eventually differ, as presumably they will, in addition to the tax differences, the same will apply.

In designing alternative arrangements for handling cross-border trade, either on the land or the sea border, it should be remembered that the merged HMRC is trying to manage a range of complex IT changes all at once, including Making Tax Digital and its part in universal credit. It is also, unrelated to Brexit, introducing a new customs declaration service—a computer system that will replace CHIEF, the 25 year-old customs handling of import and export freight computer system. I would be grateful if the Minister could tell us whether the introduction of the new customs declaration service is going to timetable. It was scheduled to finish in March—an interesting combination of dates. Both CHIEF and CDS are linked to the existing EU export control system and will still need to be after Brexit as well. All this reorganisation must be making life very difficult for the customs management. Nevertheless, I firmly believe that alternative arrangements are technically possible and that they would work just as well as the existing and long-standing taxation and border arrangements work at both land and sea borders.

This debate has been, to some extent, a repeat of previous ones—the holding pattern that the noble and learned Lord, Lord Hope of Craighead, so charmingly introduced us to in his speech. Some contributions have simply repeated or developed further people’s previous views, but some important contributions have been very positive, starting with the noble and learned Lord’s. I was interested that he urged acceptance of the agreement, except for the backstop, and then carefully set out in a very good way solutions that sounded extremely reachable. I also noted the intervention by the noble Baroness, Lady O’Neill, and the speech of the noble Lord, Lord Alderdice, regarding the Northern Ireland aspects. They were most important interventions that should be taken into account and carefully considered as to what we do today.

I believe that in the end we shall emerge from this process battered, no doubt, but unbowed. I believe that this country has a great future whether or not we succeed in solving all these problems in the next few weeks. It might be that the backstop has to be extended, but only for a specific purpose. It is the next few weeks that will count, even if there is a bit of tidying up to do, as it were, in the few weeks after 29 March.