Trade Bill — House of Lords, 2020-10-13
Topic: Foreign Trade
Jeremy Purvis (Liberal Democrats, Centre to centre-left): My Lords, I agree with what the noble Lord, Lord Grimstone, has said on a number of occasions: trade agreements mean little if businesses cannot operationalise them and use them to export more and import better. We on these Benches agree: we believe that the UK should be in a position for prosperity if we can have the right trading relationships around the world. To do that, we need to know what kind of barriers exist, what levels of bureaucracy have been put in place and how the Government are supporting businesses to overcome them. Paragraph 21 of the political declaration attached to the withdrawal agreement with the EU says that, "the Parties envisage comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation" Paragraph 22 goes on to envisage "ambitious customs arrangements". Our motor industry, held up by the Government and others as a success story—rightly so—has called repeatedly for full implementation of the Union’s customs code and for the UK to take a different approach from the one that it has so far in ensuring that businesses have as little bureaucracy and as few barriers to trade with the European Union as possible. The SMMT, representing the industry, brings to stark attention, in its January briefing, what we face at the start of 2021: "Basing the new UK/EU trading relationships on the provisions permissible in a free trade agreement will significantly change the administrative processes related to the movement of goods between the UK and the EU. There is a risk that the trade agreement between the UK and the EU results in increased friction at the border. Delays to the arrival of components at manufacturing plants are measured in minutes. Every minute of delay could cost approximately £50,000 in gross value added to the industry, totalling over £70 million per day. For automotive manufacturers, border delays are unacceptably disruptive, and if the sector in the UK is to remain competitive, these must be avoided." Frictionless trade had been the mantra, we recognise that, but now it looks as if we are going to be having it on truly Newtonian levels. The Government have, however, not chosen to carry out impact assessments on their border operating model, on the new measures to be put in place, or indeed on the costs to businesses that are going to be exporting and importing. Instead, they have chosen some business estimates of costs and ignored others Officials, not Ministers, confirmed that the Government’s most recent estimate on the likely necessary bureaucracy at our border ports, first published by HMRC in December 2018 and confirmed by the Government, is that there would be an additional 215 million customs declaration forms for businesses importing and exporting goods. That would apply regardless of whether Britain and the EU conclude a trade deal this year with the aim of removing all tariffs and quotas, so that is likely to happen. Can the Minister confirm that that is the latest estimate and tell us whether the Government have asked HMRC to update any of the cost estimates in light of the publication of the new border operating model, and whether that is the basis on which we should go forward? If it is then, although we were told that there would likely be a net £9 billion saving from leaving the European Union, there would also be a £7 billion cost to exporters and £7 billion to importers annually, and an extra £1 billion at least for cost of preparation plus commitments for ongoing costs. But there is no impact assessment on the business burden itself I do not wish to relitigate any of the arguments about European Union membership—and I knew that would get some smiles from the Benches opposite, but I genuinely do not—but the question is not whether we go back; it is about how many barriers there are for us to go forward. These are legitimate questions, because on top of this, George Eustice, the Environment Secretary, told MPs last Tuesday that it was estimated that up to 300,000 export health certificates would be required from 1 January next year for agricultural goods—a five-fold increase on current levels. There is a genuine concern about the burden on rural businesses from the processing costs for official veterinarians to carry this out—if they are actually available. Do the Government have contingency arrangements for the turn of the year if there are difficulties in securing these certifications As our amendment relates also to burdens for Northern Ireland—and there will be ample opportunity to debate the internal market legislation that is coming—I want to refer to one element of the Northern Ireland trading relationship that has been highlighted recently by the Food and Drink Federation. The federation has said that, regardless of the protocol being implemented in full and regardless of the internal market provisions—wherever they might be in due course on the customs process—there are likely to be costs on goods travelling into Northern Ireland that must comply with EU rules governing customs, VAT, plant and animal hygiene, and product labelling. This is linked with 1.5 million tonnes of food and drink travelling between Great Britain and Northern Ireland each year. The Government have indicated their willingness to provide some funding for businesses from Northern Ireland to offset some of the costs for this, but can the Minister explain to us what the current level is This is all building to the necessity of asking the Government to report on what barriers and costs exist. We have received some indication from the border operating model to which I referred. We already know, from the document that was published last week—the 271-page border operating model—that this is going to add huge burdens at our borders. We know that there is a six-month deferral for our border processes because they have not been ready and that this is not going to be all that is necessary for this. However, what we did learn last week was that businesses are going to need permission to move their vehicles to Kent. The Government are going to require a statutory Kent access permit for businesses seeking to export from anywhere across the UK if they wish to exit from Dover. Therefore, not only do we now have a debate about unfettered access to Northern Ireland: there is not even going to be unfettered access to Kent on the M20 for those wishing to export We know from Michael Gove’s Statement in the House of Commons whose fault this is likely to be; rest assured, it will not be his. He said: "Every business trading with Europe will need to thoroughly familiarise itself with new customs procedures and, whether they develop their capacity in-house or work with a customs intermediary, enhanced preparation is vital." This is two months away. He went on to say, referring to businesses, that, "just 24% believed that they are fully ready."—[Official Report, Commons, 23/9/20; col. 961.] Therefore, in addition to the grants of support and in addition to what the Government have indicated is going to be necessary for intermediaries, we know that there are insufficient numbers of those to support businesses. I asked at Second Reading about the number of intermediaries recruited after the Government’s undertaking to help our exporters, but the Minister did not reply. I wrote to him, and he kindly sent me a thorough reply but without the information about how many intermediaries had been hired. Can he answer that today with up-to-date information Finally, businesses have been calling for some clarity on this additional bureaucracy, these new barriers to export and the new burdens on importers. If businesses are going to be taking up the greater exporting opportunities that might present themselves, they need to know in advance, with a degree of certainty, what kind of barriers and burdens they face. That is why these amendments are important. I hope that the Government support the principle of them: to have as much information out there as timely and accurately as possible. It is not just for 1 January that we need to prepare; it is ongoing. That is why I hope that the Government will support these amendments. I beg to move.