EU VAT area and pre-commencement requirements

Part of Taxation (Cross-Border Trade) Bill – in the House of Commons at 5:30 pm on 16th July 2018.

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Photo of Chris Leslie Chris Leslie Labour/Co-operative, Nottingham East 5:30 pm, 16th July 2018

I commend Anna Soubry for the passion with which she has spoken. She spoke authentically about the care and attention that she has taken to look into the supply chain issues, the just-in-time delivery systems that are the foundation of modern manufacturing in our country. She was not taking an ideological view, which certain Conservative Members, who may guffaw at that, might take, but thinking about the economy: our constituents’ jobs and all the prosperity and tax revenues that pay for the vital public services that we need to keep this country going. The national health service, the education system, housing and local government all depend on a healthy, vibrant economy.

If we go down the avenue that some of the hard Brexiteers suggest, we will not only jeopardise jobs, but face a decade or more of austerity. The Treasury’s analysis has been revealed and shows that a big black hole emerges in Treasury tax revenues if we leave the customs union and the single market, which, from my point of view, are the absolute minimum of where this country needs to be.

The amendments cover several different issues, but the right hon. Member for Broxtowe touched on the wrecking amendments tabled by the European Reform Group— members of the Conservative hard Brexit crew. She is probably right that there are about 40 of them, and it would be a terrible shame if the Prime Minister, rather than looking at where the equilibrium rests in Parliament—the balance of opinion, which I do not think is for a hard Brexit—were instead to be hijacked and have her agenda taken over by that Trumpian hard Brexit view. Those amendments, particularly new clause 36, which is a clearly a wrecking amendment to the facilitated customs arrangement that the Prime Minister put in the Chequers agreement, are designed to ensure that the Chequers plan lasts for only one week.

I have my issues with the Chequers plan. I think it falls short of that de minimis customs union, EEA, single market position. However, I draw Members’ attention to amendment 73, which goes way beyond the Chequers arrangement. It would provide that if Britain ever entered into any future customs union with whatever territories, we could not have our current smooth VAT acquisition arrangements, whereby we avoid firms having to pay VAT upfront at the border and have frictionless trade, of which VAT is such an important part.

I hope my hon. Friends on the Front Bench as well as Conservative Members are listening to that point, because the ERG’s amendment 73 is a wrecking amendment, which would hurt our economy regardless of the Chequers plan. It goes beyond that and would undermine our customs arrangements more broadly. Even if the Government want to accept that, I implore Labour Front Benchers to oppose amendment 73 in particular.