Taxation (Cross-border Trade) Bill — House of Commons, 2018-01-08
Topic: Foreign Trade
Angela Christine Smith (Labour, Centre-left): It is a pleasure to follow the hon. Member for Stoke-on-Trent South (Jack Brereton) and, preceding him, my hon. Friend the Member for Aberavon (Stephen Kinnock), both of whom represent industries that are also very important to my constituency—steel and ceramics. I join them in pursuing a robust trade remedies mechanism, and in agreeing particularly with my hon. Friend that there is much work still to do to make sure that we get this right. I also join my hon. Friend in being very clear that we are talking about a level playing field and not protectionism. I think that on the Labour Benches there is considerable support—I hope universal support—for genuine free trade. Protectionism is not the way forward if we want to grow economically and play our part on the global stage This Bill, if passed, will fundamentally change our relationships, whether for good or bad, not just with our closest trading partners but with countries across the world. The EU customs union is without question one of the key pillars supporting the largest free trading bloc in the global economy—a bloc that in 2016 accounted for 43% of our exports and 54% of our imports. Yet we are debating a Bill that, in effect, confirms the Government’s intention to take us out of the customs union—a mechanism that is, or has been, integral to delivering our current trading profile. The Government are doing this despite the fact that leaving the customs union could cost the UK an estimated £25 billion every year until at least 2030 Leaving the union will also further complicate our key trading relationships by necessitating customs declarations for EU trade. The National Audit Office estimates that the number of declarations per year will increase from 55 million to 255 million if the UK leaves the customs union. Sometimes one has to lay down the statistics as barely as that, because this is what it all means. We have to see the global impact of the decisions that we are taking here in this Chamber To put into perspective what is at stake, it is worth looking in a little detail at the food and drink sector, which is the largest manufacturing sector in the UK economy. It is an industry worth more than £100 billion to the UK economy. In 2015, UK food exports to the EU were worth £11 billion, while food imports from the EU were worth £28 billion. The British Retail Consortium has established that the average tariff on food products imported from the EU could be in the order of 22%, with tariffs on Irish cheddar, for instance, being as high as 44%. I will not go into the detail of the Environment Secretary’s view on what we should do about that; one is reminded of "Wallace and Gromit" as much as anything else. The overall impact of that tariff—the Environment Secretary could not answer this point at the Select Committee—could be an increase in cheese prices of between 6% and 32% for consumers in this country. This is about workers’ rights but it is also about consumers. It is about the impact on the prices of everyday food staples, and on consumer choice The food and drink sector relies on the efficient, just-in-time movement of goods between EU countries in the context both of finished goods and the industry’s complex supply chain arrangements, which my hon. Friend the Member for Nottingham East (Mr Leslie) mentioned. This is not just a "nice to have" arrangement; it is an essential part of modern manufacturing processes. Just-in-time delivery not only ensures high quality, especially of perishable goods—the freshness and quality of the products on the shelf—but is very important for customer service. It is the same in the steel industry: in my constituency, just-in-time delivery of supply chain components and of products out of the plant is just as important for customer service as the quality and standards of the goods The next-day delivery of highly perishable produce—this is particularly pertinent to the food industry—is currently possible, yet the Bill threatens to put up barriers to this remarkable aspect of modern-day European Union trade. It is therefore imperative that the frictionless movement of goods across our borders remains in place, especially as far as the land border with Ireland is concerned. Anything else will have a seriously detrimental effect on the food and drink industry Equally, the lack of a commitment in the Bill to remain in the EU VAT area may mean that UK businesses face cash-flow issues, as well as customs delays, at the border. Many other Members have mentioned that today, but the point cannot be reiterated frequently enough, because it is so important. UK businesses are incredibly worried about the impact on cash flow if we get this wrong This is the wrong Bill. There is no doubt in my mind that this should have been a Bill that confirmed an intention to keep us in the customs union to secure our economic future. While the country may have voted to sever its political union with the European Union, it did not vote to leave the customs union. I know that view has frequently been challenged by Government Members today, but I repeat the point that membership of the customs union and the single market was not on the ballot paper, and this country certainly did not vote to be poorer I recall the words of the Chair of the Treasury Committee, the right hon. Member for Loughborough (Nicky Morgan), who made the point in a debate in Committee on the European Union (Withdrawal) Bill that one of the responsibilities of this House is to deploy its judgment and to bear in mind that future generations will judge us on the judgments that we make. Many Members of the House believe that if we get this wrong—if we get this Bill wrong—future generations will pay the price, and that is not a risk that many of us are prepared to take Such is the importance of the Bill that it is absolutely imperative for it to have thorough scrutiny in both Houses, but the Government seem determined to avoid proper scrutiny by using the Ways and Means procedure to determine that this is a money Bill. I have no intention, Mr Speaker, of dictating what your decision should be. All I am attempting to do is to make the argument that this Bill is so important and so far-reaching in its implications that it would be a disservice to democracy for it to be characterised as a mere money Bill. This legislation is far from that: it is global in importance and profound in its potential impact on the UK’s economic future. On those grounds, I hope you will give serious consideration to ensuring that members of the other place get their chance to scrutinise the Bill meaningfully.