EU Exit Negotiations

Stephen Timms Excerpts

Tuesday 9th October 2018 Commons Chamber

[Dominic Raab]

My hon. Friend is absolutely right. The time for warm words is over; now is the time for deeds, actions and political decisions. I am confident that we can get there, as I have said, if the EU matches the innovative approach that we have taken. The EU is often at its best when it is innovative, rather than dogmatic and relying on dry legalism. If it can produce the political will to meet us halfway, I am confident that we can get a good deal, in the way he described.

[Stephen Timms (East Ham) (Lab)]

When the Select Committee met Michel Barnier on 3 September, he set out four reasons why the EU could not accept the proposal on the facilitated customs arrangement and the common rulebook for goods. The Select Committee then published its evidence. Why, therefore, did the Prime Minister apparently not know when she went to Salzburg on 19 September that those key elements in her Chequers proposals had already been rejected by EU member states? It has been said that she was insulted, but she should have known that that was their position.

[Dominic Raab]

The right hon. Gentleman is right that the EU has at various points set out objections, some of which I do not believe stand up to scrutiny. For example, there is the distinction between goods and services that the EU takes in relation to Ukraine, so that is at least a precedent showing that it can do it if it wants to.

The reality is that if we are in a negotiation, having taken our time to work out plans and think them through, bearing in mind the equities and key interests on the EU side, we will not just throw our hands up in despair when one or other element of the EU says no. We will continue to press them, understanding the EU’s concerns better, as we have set out in our proposals, and make sure that we can deliver a good deal that works for the EU as well as for the UK.

EU Withdrawal Agreement: Legislation

Stephen Timms Excerpts

Tuesday 24th July 2018 Commons Chamber

[Dominic Raab]

My hon. Friend is absolutely right. In 2020 we will be negotiating fishing opportunities as an independent coastal state, deciding who can access our waters and, more importantly, on what terms.

[Stephen Timms (East Ham) (Lab)]

I am pleased that the new Secretary of State is planning to meet Michel Barnier much more frequently than his predecessor did, and I welcome this new sense of urgency. On the conditionality of the financial settlement, when the withdrawal agreement is ratified in October, or whenever it is, the UK’s payment will be obligatory. Will he confirm that the future relationship, at that stage, will be covered only by a declaration, which will not be obligatory on either party?

[Dominic Raab]

We set out a lot of the detail on how we will handle the financial payment in the White Paper, and I urge the right hon. Gentleman to reflect on the detail. We cover the substance, the sequence and the mechanism for paying it and for making sure that, at all moments, this House has proper scrutiny. If he has any particular suggestions in relation to that, I would be interested to hear them.

Leaving the EU: Parliamentary Scrutiny

Stephen Timms Excerpts

Thursday 28th June 2018 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

May I ask my right hon. Friend about the section of the report dealing with the financial settlement, from paragraph 58 onwards? The House and the country have been given the impression that we are going to make a very large payment of up to €40 billion to the European Union on condition that we secure a favourable agreement about our future trading relationship. How likely is it that next March we will find ourselves obligated under the terms of the withdrawal agreement, which will be legally binding, to make the payment, yet at that point have no legal certainty at all about our future trading relationship?

[Hilary Benn]

I am grateful to my right hon. Friend for his question and for his sterling service on the Committee. That is indeed a possibility due to the way that the draft withdrawal agreement is constructed at the moment. The commitment to pay the outstanding moneys that we owe, which the Government have accepted, is part of that agreement and not conditional on what may transpire in the negotiations on the future partnership. There has been some debate on this subject; indeed, we questioned Ministers on it when they appeared before the Committee. We say in the report:

“We note that the Government has not yet secured a clause in the Withdrawal Agreement linking the financial settlement to the satisfactory conclusion of negotiations on the framework for the future relationship. We call on the Government to confirm whether the inclusion of such a clause is one of its negotiating objectives.”

We wait to see what the Government say in response. As things stand at the moment, the commitment has been made to pay the money as part of the withdrawal agreement, and it is not linked to the future partnership and the treaty negotiations on that, which we hope will be concluded by December 2020.

Oral Answers to Questions

Stephen Timms Excerpts

Thursday 3rd May 2018 Commons Chamber

[Mr Davis]

Let me make a serious point here. The issue of leaving the customs union plays directly to the issue of how we manage our future export and trade arrangements. Almost 60% of our exports are now going to the rest of the world. That is not surprising because both the International Monetary Fund and the European Commission itself have said that the vast majority of growth in world trade will come from outside the European Union. It is our explicit aim to make the most of that, and that means we have to leave the customs union.

[Stephen Timms (East Ham) (Lab)]

Will the Secretary of State set out for the House the characteristics of the customs partnership that he is discussing with his right hon. Friends, and given that according to reports that is the Prime Minister’s preferred way forward, what are the reasons for holding back on it?

[Mr Davis]

There are two models. The streamline model essentially uses conventional techniques used around the rest of the world, including electronic pre-notification, the use of authorised economic operators and a whole series of other technical mechanisms. The alternative proposal—the new customs partnership—is a brand-new idea; it has never been tested anywhere in the world and involves, essentially, charging the common external tariff when goods enter the country and then rebating that. Both approaches have merits and virtues, and both have some drawbacks, and that is why we are taking our time over this discussion.

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[Mr Davis]

No, it is the other way around: a number of countries have made it very plain that if we are still in the customs union, they will not do a trade deal with us.

[Stephen Timms (East Ham) (Lab)]

The European Union set out a very clear negotiating position at the beginning of this exercise. The Government are still being undermined by their inability to make up their mind, and the Secretary of State has told us that it is going to take a bit longer to decide about customs. The whole negotiation is supposed to be concluded by October. How many weeks longer will it be before our Government have a clear position on customs?

[Mr Davis]

The clarity of the position of not being a member of the customs union is absolute, and has been since the beginning, unlike the right hon. Gentleman’s party, which has had a number of different positions on this matter. Frankly, it is incredibly important that we get this right—not just for trade, which is massively important, but for the extremely sensitive issue of maintaining the peace process in Northern Ireland—and I do not undertake to put an artificial deadline on something so important.

Oral Answers to Questions

Stephen Timms Excerpts

Thursday 1st February 2018 Commons Chamber

[Mr Walker]

The Government’s policy is that we are pursuing a bespoke trade agreement, not an off-the-shelf model. We believe that it will be in the interests of both sides in this negotiation to secure an implementation period.

[Stephen Timms (East Ham) (Lab)]

The European Union has clearly and firmly set out its views on the options for these negotiations. Ministers so far have signally failed to provide any coherent response because they cannot agree among one another, and the Minister’s answers today underline that—whether the answer is regulatory equivalence or something different, we just do not know. How long will it be before the British Government have a coherent position to set out in these negotiations?

[Mr Walker]

The Prime Minister has repeatedly set out a coherent position with regard to the future partnership we seek with the European Union. There was the Florence speech. My Secretary of State has been making speeches and the Chancellor has been making speeches, clearly setting out the UK’s objectives for these negotiations, and we look forward to achieving those objectives in the months to come.

Leaving the EU: Implementation

Stephen Timms Excerpts

Monday 29th January 2018 Commons Chamber

[Mr Walker]

I am happy to reiterate to my hon. Friend that that is absolutely our objective.

[Stephen Timms (East Ham) (Lab)]

The jurisdiction of the European Court of Justice in the UK will be ended from March 2019 under the European Union (Withdrawal) Bill, but the Prime Minister has made it clear that the ECJ’s jurisdiction will continue into the two-year implementation period to follow. Can the Minister therefore confirm that the implementation and withdrawal Bill, which will come forward in due course, will re-impose the jurisdiction of the ECJ on the UK?

[Mr Walker]

There is a crucial distinction and difference here, in that the action of the ECJ in the UK currently takes place because we are a member state of the EU, and the withdrawal agreement and implementation Bill will implement the agreement between the UK and the EU. That will recognise that the UK is therefore an independent country, adhering to that agreement, which the Prime Minister said should be under the same rules and regulations that we follow now.

European Union (Withdrawal) Bill

Stephen Timms Excerpts

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Mr Leslie]

I agree that we want to have a tariff-free relationship with our European neighbours—that much we can all agree on. However, the hon. Gentleman should look at the circumstances where we export to third countries outside the European Union that are not part of the free trade agreements that we have accrued over the 40 years of our membership of the European Union. Those free trade agreements are there for a reason. As we heard earlier, the reason people want out of the pure WTO arrangement and into an FTA is precisely that they want to minimise many of the transactional barriers and the inertia that can be there.

Let us take the car industry as an example. The chief executive of the Society of Motor Manufacturers and Traders, the car industry’s own representative, is now voicing concerns about investment in the sector gradually beginning to ebb away, partly because of the uncertainty of this whole situation. The level of investment in the industry in the UK was £2.5 billion in 2015, then £1.6 billion in 2016, and it is heading to less than £1 billion this year. Car companies are “sitting on their hands”, according to the chief executive of the SMMT.

[Stephen Timms (East Ham) (Lab)]

I want to take my hon. Friend back to what he was saying about the border between Northern Ireland and the Republic of Ireland. We had evidence this morning at the Brexit Committee on this. As he knows, in their recent agreement with Brussels, the Government committed to having no infrastructure at the border, and, if necessary, to our providing full regulatory alignment with the internal market and the customs union in order to achieve that. Is he encouraged by that commitment, even though the Government’s current policy is not to stay in the customs union, because if it stands, it looks very likely that we will have to, in effect, stay in the customs union?

[Mr Leslie]

Absolutely. If we can maintain full alignment, which was the phrase used in that agreement, that is essentially the same thing as a customs union arrangement. However, there was a caveat in that Ministers said that it would apply unless specific solutions can be found for divergence that they might want to see. That is a bit like the European negotiator’s way of saying, “Come on then, do your best—let’s have a look at what you can dream up.” The worry that I had when the Prime Minister returned was that her interpretation of full alignment was to reference the old list within the Good Friday agreement that merely talked about areas such as agriculture, energy and tourism but excluded trade in goods, which is a pretty big part of the issue at the border. I do not think the European Union signed up to this thinking that there was an exclusion for trade in goods. It is a question of “watch and wait” until the situation unravels.

Oral Answers to Questions

Stephen Timms Excerpts

Thursday 14th December 2017 Commons Chamber

[Mr Walker]

I am sure that plenty of analytical work is being done on both sides, but as my hon. Friend knows, the EU Commission does not make all its analysis public.

[Stephen Timms (East Ham) (Lab)]

Surely quantitative assessments of the impact of leaving the EU on sectors of the UK economy should have been basic spade work for the negotiations.

[Mr Walker]

As the right hon. Gentleman will know, and we debated at great length, a huge amount of sectoral analysis has been done by the Government on these issues. I think that he discussed at length with the Secretary of State in the Select Committee why quantitative impact assessments were not considered appropriate.

--- Later in debate ---

[Mr Walker]

The issue of onward movement in the European Union is, of course, one that we wish to continue to press; interestingly, the European Parliament made resolutions yesterday in support of the right of UK nationals to have onward movement in the European Union. We will continue to take that forward into the next phase of negotiations.

[Stephen Timms (East Ham) (Lab)]

On financial services, how hopeful are Ministers that through the negotiations the UK will retain the passport for service providers to trade across the EU?

[Mr Walker]

We are at the start of negotiations on the future relationships, but we should explore all the possibilities to make sure that the UK and the EU continue to benefit from the fact that we have a global financial services centre here in London and the UK.

European Union (Withdrawal) Bill

Stephen Timms Excerpts

Committee: 5th sitting: House of Commons
Wednesday 6th December 2017 Commons Chamber

[Kirsty Blackman]

I thank the right hon. Gentleman for his comments. I have heard that pretty insubstantial information has been provided, particularly on the numbers.

I was concerned to note that the UK Government have made a call for evidence on trade remedies. They want information from companies, organisations and sectors about which trade remedies are important to their sector. The UK Government do not know which remedies are important, because they have not done the work. They do not have a good enough understanding of the sectoral impact of Brexit.

I shall highlight a few things in relation to that. The Bank of England recently asked what would happen to cross-border derivative contracts and insurance policies after Brexit. The UK Government have not answered the question. I asked them what would happen to rules of origin and what would happen to companies that, for example, made cars in the UK. What would happen to free trade arrangements that call for cars to have 55% or 60% UK content? Currently, it is EU content, but in the event of Brexit we would seek 55% or 60% UK content. Our cars do not have that much UK content, so I asked the UK Government for their position on rules of origin and what they were doing about that. Basically, the answer was “We don’t really know.”

There has been a complete lack of understanding. An awful lot of companies and organisations are going to the Government and saying, “This is our problem. You need to fix it—and you can do it this way.” Most of them have come up with solutions and have suggested ways to fix things. Insurance organisations, for example, have a huge problem. If they sell insurance to someone in an EU country, after exit date they will no longer be able to collect premiums or pay out in the event that someone makes a claim, and they will not be allowed to write to those people to tell them that they cannot do those things, because that is how the rules work.

The UK Government could attempt to give certainty now on a number of such issues, including customs. The economic impacts of this are unbelievable, and the regulatory impacts are baffling even the Government. The impacts are going to be too big for anyone to comprehend. Most of the stuff that we will look at in future, according to how the Bill is drawn up, will be dealt with in SI Committees. It is totally inadequate to discuss incredibly important regulatory regimes, levies and taxes in such Committees. That is not how the Government should proceed. They should change their mind on that and look at the amendments that have been tabled, particularly by the hon. Member for Nottingham East (Mr Leslie). The SNP is willing to endorse them, and we thank him for introducing them.

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Aberdeen North (Kirsty Blackman). I share her bemusement at where we have got to on the impact assessments, which we have now been told do not exist. Like her, I would have thought that that work would have been done—it certainly should be done. If it has not been done—we have been told that it has not been done—it urgently needs to be done so that the Government and the House can take an informed view about where we are heading.

I wish to speak briefly to my amendments 152 and 153 to schedule 4, which touch on the matter raised by my hon. Friend the Member for Darlington (Jenny Chapman). She pointed out that while it was a good thing that Ministers could assure us that no new taxes would be introduced as a result of the sweeping powers that the Bill gives to Ministers—I am glad that new taxes are not going to be imposed on us through the use of these powers—nevertheless the Bill gives them the powers to impose charges. My hon. Friend is absolutely right to make the point, which was also made by the hon. Member for Aberdeen North, that there is frankly precious little difference between taxes and charges. There are wide powers in the Bill to impose new charges, so my amendments 152 and 153 are intended to constrain the power of Ministers to impose charges, which could be almost limitless in scope. I hope that the Minister, in winding up the debate, will be able to give assurances to the Committee that these powers will not be used in ways that none of us would want. I hope that by probing the Minister’s intentions through my amendments I will receive the assurances I seek.

Amendment 152 would amend line 35 of schedule 4, on page 32. The schedule is slightly alarmingly worded, and the amendment is to part 1, which deals with the power to provide for fees or charges. Paragraph 1(3) lists various things that Ministers can introduce regulations to do: to prescribe fees or charges; to provide for recovery of any sums payable; and to confer power on public authorities to do rather similar things. The sub-paragraph explicitly allows Ministers to introduce regulations on those three things, but its first line also reads:

“Regulations under this paragraph may (among other things)”.

Apart from the three specific things, which, frankly, sound rather alarming, it seems that there are some other, non-specified things that the schedule would empower Ministers to do. Amendment 152 simply proposes the deletion of the words “among other things”, so that at least Ministers can do only three things to demand money from taxpayers or charge payers.

[Helen Goodman]

I just want to make sure that I have understood what my right hon. Friend is saying. Surely what is being proposed here is that Ministers’ ability to use secondary legislation to impose taxes should be constrained, and they will be allowed to impose charges—not that if the Brexit bill is ginormous and the public finances are in a mess, Ministers will have stood at the Dispatch Box now and committed never to increase income tax. That is the correct understanding, is it not?

[Stephen Timms]

My hon. Friend is absolutely right. The amendment simply constrains Ministers’ ability to introduce new charges—she calls them taxes, and she has every right to do so—under the secondary legislation envisaged in schedule 4. What I hope the Minister will do is assure us that by “among other things” he is not envisaging some great long list of new money-raising powers.

[Helen Goodman]

Before my right hon. Friend moves on, is it not worth considering those EU agencies, such as the European Medicines Agency, that are financed by charges on the industry, not by the taxpayer? We should really be hearing from the Minister how the Government propose to fund such agencies in future.

[Stephen Timms]

My hon. Friend is absolutely right. We come directly to that point in amendment 153, in which we propose to add to schedule 4 the words set out on the amendment paper, which I shall read out. We propose to constrain Ministers’ powers by saying, first, that regulations

“may not be made for the purposes of…creating a fee or charge that does not replicate a fee or charge levied by an EU entity on exit day”.

That is exactly the point my hon. Friend has just raised. We of course recognise that a lot of charges are imposed at the moment by EU bodies of one sort or another—she mentioned a very important one—and that, in future, comparable fees or charges may well need to be levied by UK entities, but the aim of the first paragraph of amendment 153 is to make it clear that Ministers cannot impose new fees or charges for which there is not already a counterpart from the EU entity.

[Sir Oliver Letwin]

The right hon. Gentleman is doing exactly what needs to be done in Committee, and I have considerable sympathy with his ambitions. Has he considered whether the reference to remedying deficiencies as the basis for secondary legislation powers under the Bill would in any case have the effect he is describing?

[Stephen Timms]

I had not considered that, and the right hon. Gentleman may well have a point. I would be interested to know whether that is indeed the case. That interesting point is certainly worth pursuing, and I would welcome it if he expanded on that later.

Secondly, amendment 153 states that Ministers cannot bring forward regulations for the purpose of

“increasing a fee or charge to an amount larger than an amount charged by an EU entity for the performance of the relevant function on exit day.”

Let me take the example my hon. Friend the Member for Bishop Auckland (Helen Goodman) mentioned. The European Medicines Agency does very important work, and it charges the industry for that work. I am suggesting that the secondary legislation powers in schedule 4 should not be used to introduce a charge for the same function that is higher than the one currently charged by the European Medicines Agency. There may well be a loss of economies of scale in leaving the European Medicines Agency, and it may well be that undertaking that function purely for the UK will be a less efficient process than doing it EU-wide, as the European Medicines Agency does, but I do not think the secondary legislation powers in the schedule should be used to impose on industry or any charge payer a fee that is higher than the one currently charged by the EU entity.

I accept that there may well in due course need to be some higher fees or charges than those currently levied by EU entities, because the process may well be less efficient when carried out at a UK-only level, but I do not think the secondary legislation powers should be used for that purpose. If Ministers want to bring forward a proposal to impose a higher fee or charge, they should do so through the proper parliamentary process, with scrutiny by this House, not through secondary legislation powers.

[Helen Goodman]

One of the points made to me by those in the industry is that if these fees and charges shoot up, that will have an impact on their competitiveness, which is the last thing we want. Does that not reinforce my right hon. Friend’s point?

[Stephen Timms]

Once again, my hon. Friend is absolutely right. Indeed, my amendments arise specifically from the discussions I have had with those in the tech sector who are worried about the prospect of being hit by substantially larger fees and charges in the future, which is exactly what the powers in the schedule would allow Ministers to do.

I very much hope that the Minister will give us an assurance that these powers will not be used in that way, and that we will not find that industry and charge payers of other kinds are hit by fees or charges that are not being charged at the moment or are higher than those currently being charged. I very much look forward to the Minister’s response.

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Schedule 4 will mitigate the burden of taking on new functions on the general taxpayer. It ensures that fees and charges that are currently made in relation to retained EU law, such as the cost of Kimberley process diamond certificates, can continue to be modified as costs rise and fall, and that new fees and charges can be made, for example to replace those being made by the EU, such as for the regulation of chemicals. That will ensure that those who benefit from the functions transferred from the EU to the UK pay for them and that taxpayers, both corporate and individual, do not end up paying for services provided to others.

[Stephen Timms]

Does the Minister accept that we should hope that those fees and charges will be lower than those that have been paid until now to EU institutions?

[Mr Baker]

I am happy to tell the right hon. Gentleman that, as a good Conservative, I certainly hope to reduce the costs on businesses and individuals. I will come to his amendments in a moment.

New clause 17 and amendment 54 show an understandable desire to protect the role of this House, but they are not necessary. The Government have always been clear that the negotiated financial settlement will be part of our withdrawal agreement and that the House will be given a vote on that agreement. My right hon. Friend the Secretary of State for Exiting the European Union was very clear on 13 November when he announced the withdrawal agreement and implementation Bill. He said that, as one of the principal elements of our agreement with the EU, we expect that legislation to include authorisation to pay any financial settlement that is negotiated with the EU. The Bill we are debating today is about ensuring that the statute book is operational on exit day, not about paying any settlement. The same argument applies to new clause 80.

[Mr Baker]

I am confused by the hon. Gentleman, because he is such a diligent Member of the House. I explained moments ago that we will bring forward the withdrawal agreement and implementation Bill, which will cover any financial settlement, among other withdrawal issues. I would of course expect that Bill to go through the normal legislative processes, during which he and other right hon. and hon. Gentlemen will have a full opportunity to scrutinise those provisions.

I turn to the amendments tabled by the right hon. Member for East Ham (Stephen Timms). The power in part 1 of schedule 4 can be used to create fees and charges of the type that amendment 153 is concerned with. That power can be used to establish new fees only in relation to functions being transferred to UK entities under the powers in this Bill. In most cases, one might expect that it will be replacing a fee set at EU level, but in some cases it may be right that it will be better value for the taxpayer and for users of the services to create a new fee to pay for functions that the UK previously funded through the EU budget.

Amendment 152 does not recognise the need for adjustments to other, peripheral aspects of the fees regime in connection with charging fees or other charges—for example, arrangements for refunds, which I think all Members can agree should be possible so as not to leave ordinary hard-working fee payers unfairly out of pocket. Furthermore, future Governments, in the fullness of time, may wish to simplify charges, amalgamate them, or charge less for one function or another.

[Stephen Timms]

In future it may be necessary to do all sorts of things, but surely the powers in this Bill should not be used to impose new charges on businesses that are not being paid at the moment.

[Mr Baker]

This Bill, first and foremost, is about exiting the European Union successfully, with certainty, continuity and control, as the right hon. Gentleman will know. I draw his attention to schedule 2(7), which makes it very clear that in the event that a provision imposed a fee or charge, or conferred a power to sub-delegate, it would go to the affirmative procedure and this House would have the opportunity to vote on it.

I turn to amendment 339 on sub-delegation. It is right that this House keeps strict control over all financial matters, but this Bill is about ensuring continuity. I remind the Committee that this power is available only if the public authority is taking on a new—[Interruption.]

EU Exit Negotiations

Stephen Timms Excerpts

Tuesday 5th December 2017 Commons Chamber

[Mr Davis]

We recognise that duty. Indeed, I have said from the Dispatch Box that we view it as a moral imperative. We have made plain that we are doing everything possible to ensure that they carry on with their lives as they do now. We have made that plain and I really wish the hon. Gentleman would not frighten people by taking the opposite view.

[Stephen Timms (East Ham) (Lab)]

The customs union was not on the ballot paper in the referendum. The Prime Minister was right yesterday to be willing to sign up to regulatory alignment between Northern Ireland and the EU. From the Secretary of State’s answers today, I think he is suggesting that regulatory alignment should apply to the whole UK. Will he confirm that that is the point he is making, and will he explain how he sees that being delivered?

[Mr Davis]

Of course the referendum question was a short question, but it was a very long campaign. In that campaign, both sides made it plain that being outside the union meant being outside the customs union and outside the single market. Both sides made that plain and, if need be, I can point the right hon. Gentleman to the television programmes on which that was said. I have explained to the House that regulatory alignment is not harmonisation. It is a question of ensuring similar outcomes in areas where we want to have trade relationships and free and frictionless trade. Anything we agree for Northern Ireland in that respect, if we get our free trade area, will apply to the whole country.