EU VAT area and pre-commencement requirements

Part of Taxation (Cross-Border Trade) Bill – in the House of Commons at 8:15 pm on 16th July 2018.

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Photo of Jacob Rees-Mogg Jacob Rees-Mogg Conservative, North East Somerset 8:15 pm, 16th July 2018

I can merely appeal to how this was set out by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, who said that we would not be part of the EU’s VAT regime. VAT is not collected at the border; it is collected via statements from people who import and then send in returns in relation to their VAT. This would enforce a uniform system across all our VAT collection—that is the purpose. If a Government Minister states that that is Government policy, it is good enough for me, and if it is Government policy to have that in law, it seems quite sensible. Therefore, not having a clause that is contradictory to Government policy simply flows from that.

I want to focus on new clause 36, which has attracted the most controversy in this debate. The importance of the new clause is that it would actually allow the Government to run their trade policy. Trade remedies, which were mentioned by my right hon. Friend Greg Hands, would not be possible if the new clause were not implemented, because that position would simply allow for goods to be imported into the UK via other EU member states and not subject to any anti-dumping measures that we might have taken.

Right hon. and hon. Members might be aware that in 2016 we bought £42 billion-worth of imports from Holland and £26 billion-worth of imports from Belgium. That was not entirely clogs and chocolates; it was, in fact, re-imports of goods that had come through the major ports in the low countries and through to the United Kingdom. That is a major gateway of goods into the EU that then come to the UK. If we have our own trade policy, we must be able to ensure that those goods are subject to our duties, in terms of revenue collection and protection, but also in terms of anti-dumping measures, if we choose to take them. Otherwise, we would find that we were simply following anti-dumping measures implemented by the European Union and had no independent policy.

The point of reciprocity also seems to me to be fair. If we are to say to the European Union, “We will collect your taxes and remit them to you,” that is potentially a large amount of money to be sending to the European Union, giving up all the duties that would fall to us as a result of goods entering the 27 remaining member states. Should we really be affording to do that? What is happening to that revenue, in terms of our independent trade policy, not if we want anti-dumping measures, but if we want to lower prices?