Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019 — House of Lords, 2019-10-07
Topic: Law and Crime
Jeremy Purvis (Liberal Democrats, Centre to centre-left): My Lords, to give a degree of context about the scale of smuggling into the United Kingdom, the Government’s most recent figures, from August 2019, suggest that there was lost revenue to the United Kingdom of £2.5 billion in smuggled tobacco alone. To put it into further context, HMRC estimates that lost duty on smuggled tobacco represents 14% of all duties. For alcohol, HMRC considers 8% of all duty revenues being lost through smuggling and crime How does this happen? It is because of the context that the Minister described—this is my first opportunity to interact with him, so I welcome him to his position. As he said, these measures and security checks have been there for a purpose. Yes, we have seen progress in the form of a reduction, but the figures are still stark. Any one of us during the short debate on this statutory instrument could do a quick news check: "HMRC", "crime", "smuggling". With the checks, mechanisms and security procedures uniform and in place across the European Union, the Government take credit for the reduction in organised crime. Parts of our national security strategy are contingent on eradicating organised crime from the Balkans and thereby smuggling into the United Kingdom. I sit on the International Relations Select Committee. During our inquiry last year on the Balkans, we were told by the Government that their top priority in respect of the Balkans was smuggling into the United Kingdom from organised crime. It was therefore no surprise that when this issue was debated in March there was considerable disquiet that a waiver for a year would, in effect, put in place a new regime. That was debated in March and those concerns were highlighted, so it is almost breathtaking that this is considered an urgent matter. As the noble Lord, Lord Tunnicliffe, said in the previous debates on statutory instruments, it is urgent only because the Government have not acted earlier, and we may be in a position of crashing out of the European Union. The terminology of urgency in relation to bringing forward this measure is not a result of our not being unaware of these issues, it is just that the Government and HMRC do not have mechanisms in place The Minister said that there would be a transition period for businesses which were not prepared, but what have the Government been doing over the past seven months in order that there is heightened preparedness? In all our debates in this House since March on what the Government claimed was no-deal planning, they have spoken of heightened preparedness. We saw most recently that HMRC had to auto-enrol businesses to have an economic operator registration number; now there is a waiver for security procedures. What proportion of trade in goods into the United Kingdom will this measure cover? Have the Government prepared an impact assessment with regard to law and order and our strategies for reducing organised crime? If the Minister were able to highlight where that is, it would be helpful. I was not able to find it, so it would be helpful to know whether the Government have prepared such an assessment. The Government’s own Explanatory Memorandum states: "This instrument will be covered by an overarching HMRC impact assessment" It then gives a link. I looked at the link, but I could not see anything relating to this instrument, so it would be helpful if the Minister were able to state what the position is The Minister’s terminology was interesting. He referred to the measure being "transitional", but if you have a transition you start from the status quo until a new mechanism is in place. This is the new mechanism; a waiver is a new mechanism. It is not a case of the status quo carrying on until there was some form of agreement with the European Union as to what the procedures would be for imports from the European Union, because that would be covered if we had a withdrawal agreement. If we do not have one, this is not a transition—it is a new system that may well last for 12 months, as the Minister said. Can the Minister give clarity on that? He said that this is for 12 months, but Regulation 3(3) suggests that there could be, "different extensions for different exporters, goods, places or means of transport, or any combination of these", if a further public notice is provided. I may have misread the measure, but it would be helpful to know where the restriction of it being only for a year is: that is a genuine question The Minister referred to one element of the declarations being waived for empty containers. How will we know if they are empty? If no declarations are required, what is the distinction between an empty container and a full one? How will our authorities be able to know? The Minister is suggesting that there would be no checks, on any grounds whatever, on any containers coming across the Northern Ireland border. I remind the Minister that, according to Northern Ireland government figures, there were 46 million transport crossings at 15 points on the Northern Ireland-Ireland border last year. What mechanisms are in place to ensure that none of the containers that cross the border will have any kind of determination for their security, at destination or source? Not only would there be no checks, there would be a waiver at source and on receipt at the destination. What will that mechanism look like? Nothing that the Minister said today gives clarity on what that would be and how it would cover many elements of 46 million vehicle crossings. There is also little in the revised Northern Ireland protocol. It is of concern that the Government did not do specific impact assessments One element raised by the business community in March, in relation to the other measure to which the Minister referred, was the reciprocal nature of this. Can the Minister confirm that this is indeed part of a reciprocal agreement with the European Union? If there are to be no mechanisms and if this is a unilateral waiver—which would, I suspect, have to be applied to all other countries under WTO rules—it opens up the European Union market via Northern Ireland. If the Minister can clarify that this is part of a reciprocal arrangement, some in the business community may be slightly eased. If not, there are considerable difficulties in having a unilateral system and none of the benefits referred to by the Minister will apply. Presumably, they will apply only to those wishing to export to the United Kingdom—our economic competitors—rather than the British businesses which wish to export from the United Kingdom. Given that the Government have been very coy in giving information about how many British businesses have registered with their destination countries for an EORI number, it would be helpful to know about the reciprocity of this too Finally, 40% by value of UK imports and exports are from air freight. How will this mechanism apply to the European aviation single market, which we are also leaving, and the interaction between the security procedures and checks that many businesses have had to comply with? Given that, as the Minister indicated, this should be in place if there is no deal, what response have the Government had from the air freight industry In many respects, these are very concerning measures. As the Government say, they could last 12 months but potentially longer and are, potentially, unilateral rather than reciprocal. They potentially open up many areas of abuse, especially on the United Kingdom’s land border with the European Union. As the Minister indicated at the outset, this mechanism does not apply to goods between the Republic of Ireland and Northern Ireland. What mechanisms will? I hope that the Minister is able to respond to these points.