Future Relationship Between the UK and the EU

Part of Domestic Gas and Electricity (Tariff Cap) Bill – in the House of Commons at 4:39 pm on 18th July 2018.

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Photo of Keir Starmer Keir Starmer Shadow Secretary of State for Exiting the European Union 4:39 pm, 18th July 2018

It is no good the Secretary of State shaking his head, because that is what it says in paragraph 16 of the White Paper. It is complicated. It is no wonder that businesses have said that they are sceptical about it and it is no wonder that the EU has said that it does not think it can operate such a system. It is no doubt for that reason that paragraph 17(a) says, after a description of the arrangement:

“However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK.”

There is no reading of that other than, “This is so complicated and bureaucratic that we know the EU will not be prepared to do it and we are not going to ask it to.” There is no other reading of that sentence.

Enter Monday’s European Research Group new clause 36, which says:

“Subject to subsection (2), it shall be unlawful for HMRC to account for any duty of customs or VAT or excise duty collected by HMRC to the Government of a country or territory outside the United Kingdom”,

unless

“arrangements have been entered into by Her Majesty’s Government and that government under which that government will account to HMRC for those duties and taxes collected in that country on a reciprocal basis.”

In other words, it will be unlawful for us to collect and account for taxes at our borders unless other countries and territories—the EU27—collect tariffs and account for them for us. It will be unlawful. The White Paper says that we are not going to ask the EU to do it, but new clause 36 says it will be unlawful if the EU does not.