(1) The provisions of this Act have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.
(2) In this section “relevant international or domestic law” includes—
(a) any provision of the Northern Ireland Protocol;
(b) any other provision of the EU withdrawal agreement;
(c) any other EU law or international law;
(d) any provision of the European Communities Act 1972;
(e) any provision of the European Union (Withdrawal) Act 2018;
(f) any retained EU law or relevant separation agreement law; and
(g) any other legislation, convention or rule of international or domestic law whatsoever, including any order, judgment or decision of the European Court or of any other court or tribunal.—(Sir William Cash.)
Brought up, and read the First time.
With this it will be convenient to discuss the following:
New clause 2—Provisions of Act to have effect notwithstanding inconsistency or incompatibility with international or other domestic law—
(1) The provisions of this Act have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.
(2) Accordingly (among other things)—
(a) regulations under this Act are not to be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law (and section 6(1) of the Human Rights Act 1998 does not apply in relation to the making of regulations under this Act);
(b) all rights, powers, liabilities, obligations, restrictions, remedies and procedures which are, in accordance with section 7A of the European Union (Withdrawal) Act 2018, to be recognised and available in domestic law, and enforced, allowed and followed accordingly, cease to be recognised and available in domestic law, or enforced, allowed and followed, so far and for as long as they are incompatible or inconsistent with any provision of this Act;
(c) section 7C of that Act ceases to have effect so far and for as long as it would require any question as to the validity, meaning or effect of any relevant separation agreement law to be decided in a way which is incompatible or inconsistent with a provision of this Act; and
(d) any other provision or rule of domestic law that is relevant international or domestic law ceases to have effect so far and for as long as it is incompatible or inconsistent with a provision of this Act.
(3) Regulations under this Act are to be treated for the purposes of the Human Rights Act 1998 as if they were within the definition of “primary legislation” in section 21(1) of that Act.
(4) No court or tribunal may entertain any proceedings for questioning the validity or lawfulness of regulations under this Act other than proceedings on a relevant claim or application.
(5) The period mentioned in each of the following provisions (standard time limits for seeking judicial review), or any corresponding successor provision, may not be extended under any circumstances in relation to a relevant claim or application—
(b) section 27A(1)(a) of the Court of Session Act 1988 in relation to Scotland; and
(c) rule 4(1) of Order 53 of the Rules of the Court of Judicature (Northern Ireland) 1980 (S.R. (N.I.) 1980 No. 346) in relation to Northern Ireland.
(6) The jurisdiction and powers of a court or tribunal in relation to a relevant claim or application are subject to subsections (1) and (2).
(7) In section 7A of the European Union (Withdrawal) Act 2018, in subsection (5)—
(a) omit the “and” at the end of paragraph (e); and
(b) at the end of the subsection insert “, and
(g) the provisions of the Taxation (Post-transition Period) Act 2020 (provisions to which this section is subject).”
(8) In this section—
“relevant claim or application” means—
(a) a claim for judicial review in relation to England and Wales,
(b) an application to the supervisory jurisdiction of the Court of Session in relation to Scotland, or
(c) an application for judicial review in relation to Northern Ireland, where the claim or application is for the purpose of questioning the validity or lawfulness of regulations under this Act;
“relevant international or domestic law” includes—
(a) any provision of the Northern Ireland Protocol;
(b) any other provision of the EU withdrawal agreement;
(c) any other EU law or international law;
(d) any provision of the European Communities Act 1972;
(e) any provision of the European Union (Withdrawal) Act 2018;
(f) any retained EU law or relevant separation agreement law; and
(g) any other legislation, convention or rule of international or domestic law whatsoever, including any order, judgment or decision of the European Court or of any other court or tribunal, but does not include the Convention rights within the meaning of the Human Rights Act 1998 (see section 1(1) of that Act);
“relevant separation agreement law” has the meaning given by section 7C(3) of the European Union (Withdrawal) Act 2018.
New clause 3—Treasury use of powers—
(1) The Treasury must, within four working days of the day on which this Act is passed, publish a report setting out the timeframe within which it will use the powers to make regulations conferred by—
(a) section 40A(2) of TCTA 2018;
(b) section 40B(1) and (2) of TCTA 2018;
(c) section 30A(4) of TCTA 2018;
(d) section 30B(1) and (3) of TCTA 2018;
(e) section 30C(5) of TCTA 2018; and
(f) section 5(2) of this Act.
(2) The Treasury must publish an annual report setting out how it has made use of the powers referred to in subsection (1).
(3) Each report under subsection (2) must include an assessment of—
(a) what considerations the Treasury made when deciding to use its powers, and
(b) the impact of the regulations on individuals and businesses throughout the UK, and specifically in Northern Ireland.
Amendment 1, in clause 1, page 2, line 43, at end insert—
“(4A) The Treasury must publish guidance setting out its proposed approach to the reliefs, repayments and remissions referred to in subsection (3)(b) within four working days of this section coming into force.”
Amendment 2, in clause 2, page 4, line 24, at end insert—
“(5) The Treasury must publish guidance setting out its proposed approach to the reliefs, repayments and remissions referred to in subsection (4)(a) within four working days of this section coming into force.”
The clauses before us are directly related to what was originally in the United Kingdom Internal Market Bill, and they were there for a very good reason. They were there because it is absolutely essential that we maintain our sovereignty, and the decisions must be taken by Parliament, and should not be taken by the House of Lords, whose Members are unelected. We are the House of Commons, and that part of the House of Commons which is elected has a Government who were elected in December 2019, almost exactly one year ago. In that general election, it was made quite clear that the decision before the British people was effectively to be decided in line with what was decided in the referendum. There are therefore two things joining together, in conjunction with one another: the referendum in 2016, followed by a whole series of enactments of Parliament. That includes the decision on the notification of withdrawal, which was accepted by the Labour party and was voted through in the House of Commons by 499 to around 120. It is not as if anybody could say that the supremacy of Parliament was not made manifest in the light of the referendum.
There was then a series of other enactments, and we eventually ended up with a confirmation of Acts of Parliament, including the European Union (Withdrawal Agreement) Act 2020, which was passed after the general election. Section 38 of that Act made it abundantly clear that we had the right to insist—as a matter of constitutional principle and through the enactment of an Act of Parliament—that the United Kingdom was sovereign, and, furthermore, that we would be allowed to override the withdrawal agreement. That was contained in section 38(2)(b), which specifically refers to section 7A and in turn therefore directly relates, through the use of the word “notwithstanding”, to the overriding direct effect. That is a very important point—a point that is conveniently overlooked by some people, who continually assert that somehow or other the Government have been out of order, breaking international law or breaking constitutional principles. But they never come forward with any arguments; as I said in a recent speech in the House regarding the attitude of the House of Lords, they were basically strong on assertion and empty in argument.
Does my hon. Friend agree that those of us who could only vote for the withdrawal legislation because it contained clause 38 understood fully that it was a conditional agreement to the withdrawal agreement, because the EU always said that nothing is agreed until everything is agreed, and we wished to see the full package before deciding whether to allow it to be untrammelled?
Yes, indeed. I sometimes find that Lewis Carroll has some very useful ways of putting things. There was the famous exchange between Alice and Humpty Dumpty, in which Humpty Dumpty says: “Words mean what you choose them to mean. The question is who is to be master, that is all.” Words can be used in all kinds of different ways to try to justify propositions that are unsustainable.
I say with respect, but none the less very firmly, that in this particular case it is absolutely clear that when the decision has been taken by the British people—the voters—in the referendum and has then been endorsed by an Act of Parliament and a whole series of other Acts of Parliament, including section 38, it really is not down to the unelected House of Lords to resist it on the scale that they have, and to claim that they can override the House of Commons. We have just had a whole series of agreements and disagreements going backwards and forwards on the UKIM Bill alone.
As Lord Bingham made absolutely and abundantly clear in chapter 12 of his magisterial book “The Rule of Law”, it is for Parliament to make law and pass Acts of Parliament; it is not for the judges to intervene, to seek to make law and to impugn the sovereignty of Parliament. Anyone who wants to get the full flavour of it should read chapter 12 of “The Rule of Law”, because it is the most explicit and clear statement that one could possibly imagine.
Because what section 38 does is reaffirm the capacity of Parliament to be able to make such provisions in other enactments should it be necessary to do so. Because of the complexity of the United Kingdom Internal Market Bill and the issues it raises—for example, as I have said in a previous speech this afternoon, with respect to the Northern Ireland protocol itself—there remain a number of matters that are still subject not only to the negotiation over in Brussels going on right now, but to the operation of the internal market of this country. I support that Bill, but I still believe it was a mistake to withdraw the “notwithstanding” clauses, because I think we are going to find that we will need them and we may yet need to reintroduce them on a future occasion. However, it will be section 38, which is explicit with regard to the withdrawal agreement, that will give us the authority and the statutory basis for doing that, and the same applies to the provisions I am referring to here. With regard to this Bill, we had expected that the “notwithstanding” clauses would be included in it and they were not, so I have taken the opportunity—in, one might say, my usual manner—to ensure that we have an opportunity to debate this issue today.
I now turn to the reasons why I am so clear in what I have said about state sovereignty in the context of international law. The United Kingdom as a state retains its sovereign right, and it was always capable of doing this, to withdraw from the EU. The EU is an international organisation; it is not a sovereign state. On the basis of state sovereignty, it would actually be contrary to the legal position under international law that the UK would require EU consent or agreement to leave the EU, but we do have article 50 and we did implement that in the European Union (Notification of Withdrawal) Act 2017.
State sovereignty is paramount to international law. As has been said:
“If States were not sovereign, no international law would be possible”.
It is quite an interesting idea. International law would be impossible if states were not sovereign, because they combine together to create the circumstances in which it applies. Each state has internal supremacy over how governmental functions are run and is shielded from external interference without consent. The UK as a sovereign state has a right to withdraw from an international organisation, and this right is recognised by the EU treaties themselves. This is evident from the words of article 50:
“Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”
It could not be clearer from what I have said and from what everybody knows, as they have been through this passage or on this journey, that we have been through enactment after enactment. Nobody could possibly say that we have not done it lawfully. It has been done completely in the sight of the world, and I am astonished that anyone would even consider that we had not done it in the proper manner—we have done so, lawfully and in accordance not only with our constitutional law but with international law. In short, the UK’s right to withdraw from the EU is approved and agreed by international law, and only limited by UK constitutional law and thus by our own discretion, which we have exercised.
Following the Brexit referendum, the United Kingdom exercised its sovereign right to leave the EU and, as far as I am concerned, I believe this cannot be disputed. It is quite clear that we have done what was required under our own constitutional requirements and also, in my judgment, with regard to the question of international law itself. That was confirmed, for example, by the German federal constitutional court in the Maastricht treaty constitutionality case—I am now speaking about the Germans’ view of this, but it is interesting to observe—in which it said:
“Because the German citizen entitled to vote exercises his right to participate in conferring democratic legitimacy on the institutions and bodies entrusted with the exercise of sovereign authority principally through the election of the German Bundestag,”— this is the same point I was making about our voters being represented by our Members of Parliament who passed the enactments in question—
“that parliament must also decide what is to be done about Germany’s membership of the European Union, its continuance and development”.
In other words, the principle is a common one between us and the German constitutional court.
That is of great importance in our understanding the context in which we must have the right to legislate ourselves in accordance with what our voters expect of us. We are entitled to do that in relation to the UKIM Bill or the Taxation (Post-transition Period) Bill, and we are entitled also to have a “notwithstanding” clause if we so decide. It is not for unelected persons—whether they are distinguished or otherwise, and whether they are numerous in the House of Lords or otherwise—to interfere with that.
The UK Parliament, being the supreme body in the British constitution, has the right to enact legislation inconsistent with the withdrawal agreement—I have already dealt with section 38—thereby explicitly reversing the direct effect option under article 4 of the withdrawal agreement. That is crucial, because article 4 says that, but for the fact that we are entitled to do that, it would have direct effect. That position has been set out on the UKIM Bill, which was published in September, and it was specifically stated that we would ensure that we had a “notwithstanding” clause. That has been unwisely removed, but we may come back to that on a future occasion.
The next question is, what is the position regarding the EU’s own attitude towards international law? I am afraid to say that it is guilty of recurring double standards. Article 3(5) of the treaty on European Union states:
“In its relations with the wider world, the Union shall…contribute to peace, security…and the protection of human rights…as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.”
But in the Kadi case, it was held that EU law is an autonomous legal order, meaning that in order for an international agreement to form part of EU law, it must not call into question the constitutional structure and values on which the EU is founded.
In the second Kadi case, the European Court of Justice, confirming its previous findings in the first case, ruled that the EU Courts
“must…ensure the review, in principle the full review, of the lawfulness of all Union acts in the light of the fundamental rights forming an integral part of the European Union legal order, including review of such measures as are designed to give effect to resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations.”
It is worth pointing out that the Security Council resolutions in question were adopted under chapter VII, which meant that those resolutions were adopted for the purposes of maintaining international peace and security and had to be carried out by members of the United Nations directly. Article 103 of the charter states:
“In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.”
It is clear that our capacity as a sovereign nation is endorsed by the United Nations charter as well.
What is the position regarding the necessity of these “notwithstanding” clauses in principle? I have already explained the general power to override treaties, particularly by reference to the European Union (Withdrawal Agreement) Act 2020. In the Miller case, a majority in the Supreme Court said that Parliament, in the exercise of its sovereignty, is free to legislate in any way it sees fit, including contrary to the UK’s international obligations, thus
“the sovereign power of the Queen in Parliament extends to breaking treaties”.
That was confirmed in a series of other cases, such as in Salomon, in EN (Serbia) and in the Attorney-General of Ontario v. Attorney-General of Canada. The Supreme Court has unambiguously stated that this power is a corollary of parliamentary sovereignty. I have already referred to what Lord Bingham said in chapter 12 of “The Rule of Law”, so I do not need to repeat that.
My hon. Friend said a few moments ago that Parliament has a general power to override treaties. How would that work in the case of the free trade agreements that we have negotiated with other nations? Can we simply override those treaties at will if we do not like the findings of an investor-state dispute service?
Interestingly, I made some reference to the principles that are under discussion in the current negotiations. Of course, we do not know the outcome of those negotiations as we speak—as I said in the previous debate, I wish them well—but it has to be made clear that, certainly as far as I and those of my friends who agree with me are concerned, one of the most crucial questions is that of state aid, because that issue is right at the heart of the discussions and negotiations this week. I asked the Secretary of State for Business, Energy and Industrial Strategy to assure the House that nothing in any treaty text or subsequent Act of Parliament will prevent the UK from having its own sovereign state aid rules, including on energy, so that we are not subjugated to EU state aid rules, nor to the European Court, given that the EU intends, as it has stated over the past week or two—in very bad faith, in my opinion—to impose and enforce its rules against us. Ultimately, of course, that would be done by a majority vote in the Council of Ministers, behind closed doors, without our even being at the table after
Is it not also the case that the agreement with the European Union is muddled and contradictory? The EU has always said that it understands that the UK is going to be sovereign, so if this House simply asserts our sovereignty, as it can do, that is, in a way, our fair interpretation of the agreement.
Yes, absolutely. Sovereignty is also a question of fact. I do not want to get into the intricacies of 15th century history, but there was a chap called Henry VII who made it abundantly clear that as far as he was concerned he won the battle of Bosworth and that was it. I do not think we need to pursue that one too much, because sovereignty is quite a simple thing when it comes down to it: it is called political will and legal arguments of the kind I am addressing.
I am interested in my hon. Friend’s point about sovereignty over free trade agreements. In 2009, an American firm called Cargill was awarded around $90 million because Mexico had broken a free trade agreement with the United States by, in effect, banning soft drinks that were made with high-fructose corn syrup, putting Mexican producers at an advantage. Mexico acted unilaterally, with sovereignty; is my hon. Friend saying that Mexico was allowed to do that? That is not what the dispute-settlement service determined.
I cannot speak for that dispute-settlement service and nor can I speak for the Joint Committee that is currently considering some of these matters. We do not really know exactly what is being decided in that Joint Committee, which is why I was concerned earlier to point out that I have asked the Chancellor of the Duchy of Lancaster to appear before my European Scrutiny Committee, of which I have the honour to be Chairman and on which I have served for 35 years, so I have a little experience of how it operates. Under our Standing Orders, it is our task—our duty—irrespective of party politics, to examine matters of legal and political importance and report to the House, and we are doing that. Of course, we need evidence, and we need to have people to appear before us and give evidence, and sad to say, despite the fact that I have written four letters to the Chancellor of the Duchy of Lancaster, he has declined to appear in front of the Committee, although he seems to be happy to see the House of Lords equivalent Committee and also the Committee chaired by Hilary Benn.
Be that as it may, I have made the point, and sadly I cannot force the Chancellor of the Duchy of Lancaster to appear. It would, however, be extremely useful if he did, because then he would able to explain just exactly what he has agreed in the Joint Committee, of which we have only a smidgen of information. It would be a two-way advantage if he did it, and all I can say is that the position is as I have described it, and I am sorry about that. No doubt we will find out in due course.
I just want to clarify one matter. Perhaps the hon. Gentleman can do that. When it comes to sovereignty and the free trade agreements that he and others have referred to, can he give me an educated guess on where Northern Ireland stands with sovereignty? Do we have the same freedom and the same rule of law across the United Kingdom of Great Britain and Northern Ireland, or will Northern Ireland be treated differently?
Provided the treaty itself, and therefore the Act of Parliament that follows from it, maintain the principles I set out in my question to the Secretary of State for Business, Energy and Industrial Strategy yesterday, there is no question as to whether we will be entitled to exercise our sovereignty and to displace European Court jurisdiction and the EU laws, for example—there are many others—on state aid. We will be entitled to do so, but it is a matter of constitutional law and also, as I have explained, international law.
I am afraid that there has been a great deal of assertion that we are so-called potentially in breach of international law, but international law recognises the fact that a country can exercise its sovereign rights to defend its economic interests from a national point of view. In fact, Helmut Schmidt did precisely that in, I think, 1998 over the question of the deutschmark and the dollar. There are many examples, and we have not got time to go into them all today.
I will turn to some of the precedents just to illustrate the fact that it is not such a novel idea somehow or other to use a “notwithstanding” clause or formula, and that applies to all parties, whether that is the Labour party, the coalition, where the Liberal Democrats joined in and voted with us on these matters, or the Conservative party. For example, the Income and Corporation Taxes Act 1988 provides that the parts that diverge from treaty obligations—the language of the section was completely unambiguous—were “notwithstanding anything contrary” to those arrangements set out in the Act. The section was enacted to retaliate against the introduction of unitary tax systems adopted by certain states in the US, most notably in California. I think my hon. Friend Kevin Hollinrake may know about that.
What I am saying is that such provisions are not exactly unusual. Indeed, in the Finance Act 2013, which was under the coalition, the Liberal Democrats went along with allowing Parliament to effectively write a blank cheque to interfere with international treaties—approximately 130 of them, in fact. That provision is still in force. No one questioned the Chancellor’s right to introduce any such legislation or, indeed, the lawfulness of the work of Her Majesty’s Revenue and Customs, which still relies on it in combating questions relating to such arrangements.
Then there are other precedents. I shall stick to Finance Acts at this juncture as that is what we are dealing with in the context of this particular Bill, which is, of course, a finance Bill. Section 52 of the Finance (No. 2) Act 1945 overrode aspects of the Ireland-UK tax treaty of 1926. I hope I may be allowed a slight smile here, as I look across the Irish sea and consider the position with regard to the Irish Government in relation to the “notwithstanding” clauses, because we actually did this in 1926. The Act was used as an example in a case involving Collco in which the court said that if the statute is unambiguous, its provisions must be followed even if they are contrary to international law. It could not be clearer. The Finance Act 1955 again overrode the Ireland-UK tax treaty. In the Inland Revenue Commissioners v. Collco Dealings, Viscount Simonds said, “The company has no rights under any agreement. Its rights arise from the Act of Parliament, which confirmed the agreement and give it the force of law.”
Section 59 of the Finance Act 2008 excluded UK residents from benefiting from provisions in respect of profits from the trade etc. Then there is the coalition arrangement under the Taxation (International and Other Provisions) Act 2010 where, again, the position was made entirely clear in accordance with the precedents.
Indeed, it is not just the UK, or even a party in the UK, that has been doing this over a period of time in its economic and national interests. An example from 2020 is the European Central Bank’s bond-buying scheme. In May 2020, the German constitutional court sought to override EU law and the Court of Justice, suggesting that the ECB’s public sector purchase programme was unconstitutional. Then there are the bail-outs. Every one of the bail-outs from 2010 to 2015 could justifiably be described as in breach of article 125 of the Treaty on the Functioning of the European Union. I will not read out the details, but I shall give some examples: the first Greek bail-out in 2010; the Irish bail-out in 2010; the Portuguese bail-out, the second Greek bail-out; the Spanish bail-out; the Cypriot bail-out; and the third Greek bail-out in 2015. There are so many examples—whether in the UK, or in relation to other member states, or, indeed, in relation to the EU itself—that have demonstrated that, when it comes to the question of sovereignty and the ability to override treaties, this is done quite often as a matter of course. I am not saying that it is done generally. I am not saying that it happens every week or every day. What I am saying, however, is that it happens and that it happens for good reasons which are directly related to the arguments on sovereignty which I gave at the beginning, and it is not for the unelected House of Lords to tell us. That is why, in this Bill, they would not have been able to do so because of the issue of financial privilege.
I am bringing forward these amendments. I shall decide as we proceed whether I will press them to a vote. I will leave it at that for the moment, because I am more than fascinated to hear the usual Europhile utterings of Mr McFadden who is about to speak.
It is a pleasure, as always, to follow Sir William Cash. I rise to speak to new clause 3 in the name of the Leader of the Opposition, and, with it, amendments 1 and 2, which are also in his name and the names of my right hon. and hon. Friends. These amendments are pro-business and pro-compliance. They are motivated by trying to get as much information to the businesses affected by the changes in this Bill in as short a timescale as possible.
The Bill that we are discussing sets out a number of taxation changes, many of them as a result of the Northern Ireland protocol. These measures will have an impact on businesses throughout the United Kingdom, but in particular, businesses in Northern Ireland and those who trade with them. In a recent evidence session for the Northern Ireland Affairs Committee, HMRC was asked how many new declarations there would be under the kind of system set out in the Bill. The official giving evidence said, to be fair, that it was a new system, so they could not be sure, but that there could be about 11 million new declarations a year. That is a sizeable additional amount of information that businesses have to publish.
The amendments we are putting forward this afternoon try to help those businesses to cope with the changes set out in the Bill. I should stress that nothing in these amendments alters the terms of the changes set out in the clauses or the purpose of the Bill. The Government have signed up to the protocol and we want to see them abide by the agreement they have made. There may be those in the Conservative party—in fact, there almost certainly are—who do not like the obligations that the protocol entails, but we believe that the Government should stick by the commitments they have made. The changes in the Bill are largely, though not entirely, a consequence of that agreement.
However, many of the clauses in the Bill are enabling in their nature. They confer on the Treasury powers that are to be filled in at a later date. For example, clause 1 says that the Treasury may by regulations provide a definition of goods being imported into Northern Ireland that
“are at risk of subsequently being moved into the European Union.”
It goes on to talk about which duties shall apply in the case of these so-called at-risk goods. Very similar language is used in clauses 2 and 5 and a number of the schedules—that the “Treasury may by regulations” provide.
To be fair to the Minister and to the authors of the Bill, there is nothing unusual about a Bill taking enabling powers that are then to be set out in further detail in regulations that come after the Bill has passed its parliamentary proceedings, but what is unusual is the context and the timescale involved. The end of the transition period is in just 16 days and, in the middle of those 16 days comes the Christmas holidays, so the Government are asking businesses to absorb, prepare for and comply with a new series of taxation regulations that those businesses have not yet seen, and to do so over a two-week period coinciding with the biggest holiday of the year. And they are doing that at the end of a year in which the very same businesses have already faced unprecedented turbulence in the wake of a global pandemic.
The businesses concerned do not want to fall foul of regulations. They want to comply. They want to be able to get this right. Businesses in Northern Ireland and the trade bodies that represent them have put in enormous efforts over the past few years to try to prepare for this moment. Of course, they could have spent all that time and effort doing what they were set up to do, which is to provide goods and services to their customers, but the process of Brexit and the specific circumstances of Northern Ireland, which are now enshrined in the Brexit withdrawal deal, have meant that a great deal of effort has had to go into trying to understand the trading and taxation rules that will kick in after the end of this year. So here we are with this Bill, with just over two weeks to go. With the best will in the world, how do the Government expect them to do this on this kind of timescale?
The purpose behind the amendments is very simple: it is, even at this late stage, to encourage the Government to get a move on. When I moved a similar amendment in Committee last week, the Minister said that guidance had been published in October, but that is not what we are talking about here. We are talking about the details of the regulations enabled by this Bill, which was published only last week.
The Minister cannot seriously be telling the House that everything covered by the Bill was dealt with in October, and there is nothing more to add. If that was the case, it would prompt the question as to why it was published only last week. The answer, of course, is that the Government wanted to use it to hold the threat of the kind of provisions that the hon. Member for Stone has just been talking about over the trade negotiations—a damaging and self-defeating tactic.
Many of the regulations stem from the Taxation (Cross-border Trade) Act 2018. New clause 3 sets out which sections of that Act are referred to in the Bill and changed by it. It asks the Government to publish the new regulations in short order and, in future, to report on their effects. Even if the Government accepted the new clause and agreed with that, however, it would still be difficult for businesses to understand it all before the new year. Is the Minister confident that HMRC has the capacity to process all the applications for authorisation that are now likely to come in from Northern Ireland-based businesses that want to comply with the new rules from
What is attitude of the Treasury and HMRC to the enforcement of the changes in the early months of next year? For example, will businesses be penalised for not paying the relevant duties or filling out all the necessary declarations, if that happens next month while they are still trying to absorb fully the detail of the regulations? Have the Government factored in the difference between the desire to comply and the basic capacity to comply? I stress that that would not be a case of tax evasion or some clever scheme thought up by advisers to get round the rules. It would be the result of being presented with legislation just a few days before it came into force.
This not just drafting understood changes to an already understood system, as happens in Finance Bills—for example, if a Budget announces an extra penny or two on a pint of beer. These are new systems that deal with new concepts as a result of our departure from the EU and our commitments under the Northern Ireland protocol. The timescale is not the fault of businesses; the responsibility for that lies with Ministers. Amendments 1 and 2 are in the same vein as new clause 3 but focus more directly on the new system of duties and rebates set out in clauses 1 and 2, which are probably the newest measures in the Bill with which businesses will have to comply.
For the sake of completeness, I will briefly set out the Opposition’s attitude to new clause 1. The hon. Member for Stone has returned with our old friend, “notwithstanding”. Rarely can so much have been loaded on to one word. Behind it lies a concept that should give us all pause for thought. Kevin Hollinrake got to the heart of it when he asked whether it could be applied to every treaty or every international trade agreement. If it could—we are in the midst of trying to agree one by the end of the year—we have to ask what it will do in the mind of the party on the other side of the table, not only in our discussions with the EU, but presumably in discussions with other potential partners, such as India or the United States, or anyone else with whom we would seek to make a free trade agreement.
“Notwithstanding” cannot be a get-out-of-jail card for the country to escape its obligations. We would never get away with that in everyday life. Let us imagine telling a police officer, “Notwithstanding the law on theft, I thought I’d just take the goods out of the shop without paying for them.” I do not think we would get very far if we did that. We cannot set aside our obligations through a clever-sounding word. An agreement is an agreement. A deal is a deal. That is the whole point. If the hon. Member for Stone presses his amendment, I have to tell him, in the friendliest tones, that we will certainly oppose it.
I have declared my business interests in the Register of Members’ Financial Interests.
I rise to support what may be an amendment that we are going to vote on or may be a probing amendment from my hon. Friend Sir William Cash, because I think there has been a deliberate misunderstanding by the EU and its friends over what Brexit is about and what we need to do in order to achieve a proper Brexit. A proper Brexit is taking back control; it is recreating the sovereignty of the people of the United Kingdom through their Parliament.
My hon. Friend has a distinguished career in this place trying to rebuild that sovereignty and watching, year after year, more and more of our powers taken away by successive treaties, by successive directives and regulations, many of them automatic ones over which the UK had little or no influence, and by court judgments which, again, we had precious little ability to shape. He is right that, as we come to legislate for our new arrangements as a sovereign country from
I am very worried about some elements of the withdrawal agreement. I was told, as we were all told, that nothing was agreed until everything was agreed, and that that meant the future relationship as well as the withdrawal agreement. The EU decided for its own convenience to sequence things and say, “You have to sign the withdrawal agreement first and then the future relationship agreement will follow.” A bit of flesh was put on the bones of the future relationship in the so-called political declaration, which one would have thought there was a lot of moral pressure to go along with even if it was not as strictly legally binding as they hoped the withdrawal agreement would be.
I now think there has been a lot of bad faith, because, according to both sides, the central feature of the future relationship was always going to be a free trade agreement, and where is the free trade agreement? We now discover that the EU wishes to take all sorts of other powers away from us as the price for the free trade agreement, which we have already overpaid for in the withdrawal agreement and which one would have thought, in good faith, the EU would now grant. It is very much in its interests—even more than it is in our interests—given the huge imbalance in trade, and above all in the trade that would attract tariffs if we had no free trade agreement: the trade in food.
That is really what we are talking about: are there going to be tariffs on food or not? We, the United Kingdom, run a colossal £20 billion trade deficit with the EU on food. We have to impose pretty high tariffs on food from the rest of the world—that makes absolutely no sense where we could not grow any of it ourselves; it may have some benefit for some of our farmers some of the time—but we are not allowed to put any similar tariffs on EU-sourced produce where we could produce it ourselves.
The EU system is to try to use tariffs to buttress domestic production, but it has not worked for the United Kingdom; it has worked the other way. The tariffs have been taken off in order to benefit the Dutch, Spanish, French or Irish suppliers of our market with food at zero tariffs. The EU already has rather more interest in tariff withdrawal than we do, because we could have a range of tariffs that would probably achieve the aims both of cutting food prices by having a lower average tariff and of having a bit more protection on the things that we really could make and grow for ourselves here, which we are not allowed to protect against continental products at the moment.
I therefore think that the Bill could be improved by reminding the EU that we will not be pushed around and we will not suffer too much bad faith from those original negotiations or from the withdrawal agreement itself. I think it was a very imperfect agreement. It is pretty ambiguous in places; it is imprecise in places. I have never felt that anything the Government have done, or thought of doing, was in any way illegal. Lawyers could make a perfectly good case under the withdrawal agreement treaty terms themselves, and anyway, we have the protection of my hon. Friend’s section 38, which made it very clear that this Parliament’s acceptance of the withdrawal agreement was conditional. Why else would anyone have put section 38 in the withdrawal agreement Act unless they were making a point?
Does my right hon. Friend appreciate that it was the Prime Minister who, after an eight-hour meeting I had in No. 10 that day—
If we go back to the previous Administration, just imagine where we would be when we consider the Chequers arrangements, and then imagine what it would have been like if we had not decided to vote against that dreadful withdrawal agreement in its original shape. There were provisions that needed to be rectified, and section 38 provides the mechanism that enables us to do that.
Indeed. I think my hon. Friend has confirmed that under the previous Prime Minister, when those of us who could not vote for her agreement said that we needed a sovereignty escape clause, we were told that that would not be permissible because it would not be effective implementation of the agreement; which was then reassuring to us, not liking the withdrawal agreement very much and realising that it was a provisional agreement and would be completed only were there to be a satisfactory outcome to the total range of talks. It was a totally artificial constraint that the EU invented that it had to be sequenced, when up until that point everybody had always rightly said that nothing was agreed until everything was agreed.
I would like to hear from the Minister a little more explanation on the detail of the Bill. As I understand it, the Northern Ireland protocol would apply only to goods that are passing from Great Britain to Northern Ireland and then on to the Republic of Ireland, or the reverse—goods coming from the Republic to Northern Ireland and then passing on to Great Britain. Am I right in thinking that that is a very small proportion of the total trade? In what ways will the Government ensure that it is properly defined, so that we do not catch up most goods in those more elaborate procedures? The bulk of the trade will be GB to Northern Ireland and back, or Republic of Ireland to Northern Ireland and back, and it should not in any way be caught up in any of these proposals. I am not sure that we do have a de minimis way of dealing with the so-called things at risk.
It is not clear how the system will work for items at risk where we agree that they are at risk—and I hope it is a UK decision about what is a risk, not some other kind of decision with EU inspectors. It would be helpful to me and the wider community interested in this debate to know how a business would proceed if it had such a good at risk, to whom it would answer, and what decisions would be made about such a good in Excise, because it sounds a rather complicated and difficult arrangement, both for the business concerned and for those who are trying to enforce.
I am trying to tease out from the Minister, in pursuit of the interests of my hon. Friend the Member for Stone and myself on sovereignty, whether we are really in control if the trade has started off from GB and is going to Northern Ireland. What kind of external intervention can the EU or the Republic of Ireland engineer—how is that fair, and how will it be determined? I think that is what we are most worried about in this piece of legislation, and we would be more reassured if there were the override that my hon. Friend proposes. I should be grateful for some explanation.
I come to this debate with many of the same concerns as I had last week. I shall not repeat them because I think everybody is quite clear on what they were. We come to this debate with the clock ticking louder and louder, and with uncertainty ahead.
I must agree with John Redwood when he says that this is a complex, complicated and difficult arrangement. Yes it is, and it is absolutely baffling why we are still not certain what will happen, with such a close deadline looming. It is impossible for businesses to know what to plan for and how they will manage this, because so much is still uncertain. The Institute for Government’s Jess Sargeant went through some of the outstanding issues in the Northern Ireland protocol still to be agreed, and these are not small things but quite significant things in many cases. There is still great uncertainty about the grace period that was talked about last week, what will happen at the end of it, and what the Government are going to do between then and now, whenever this finishes. What work will they be doing in the meantime? It does feel, quite often, that this Government put things off and leave things, and then say, “Oh gosh, suddenly I have to do that at the last minute.” They do that quite regularly.
We still do not understand the real definition of “at risk” goods or indeed how they are going to be monitored. Jess Sargeant also pointed out issues around the rules on VAT and second-hand goods. That might sound like a small thing, but actually it is quite a big thing because it involves second-hand cars, many of which are exported to Northern Ireland from the UK. If people want to buy cars, they will need to know what the rules are around VAT. That is quite significant in terms of the costs that could be involved.
I understand that the arrangements for parcel movements are still not yet finalised. This is a time of year when many parcels are moving around the place. If someone were to send off a parcel just now and did not know when it was going to arrive with its recipient, either in Northern Ireland or the Republic of Ireland, they would not know what the arrangements were for any additional customs payments or anything else that might be due when it arrived. This is something that we really ought to know before any further parcels are dispatched, but that is not what will happen. People will continue to dispatch parcels, and the uncertainty about what happens at the other end is entirely on the Government.
I understand that many of the provisions will be monitored by reciprocal access databases. Does the Minister have any further detail on how that will happen? It is understood that it will be monitored by EU officials hot-desking, but where and how, and what will that access look like?
There is still uncertainty about EU product standards on industrial goods and how that applies in Northern Ireland. There are also still issues around movement of goods cargos from GB to Ireland via Northern Ireland, because not everything stops when it reaches Northern Ireland—some things are always going to be transiting through one way or the other. Last week I gave the example of cattle hides from Ireland going for processing in Scotland. We would not want those to be hanging about for any longer then they had to.
I would always question whether the Government are fully prepared for this. What gives me further cause to do so is an email I received from the Cabinet Office at nine minutes past 3 this afternoon which talks about a port infrastructure fund for which the Government have put out applications. The Government have received 53 applications, to a value of £450 million, for this port infrastructure fund. That includes rail, air and seaports right around the United Kingdom and Northern Ireland. The Treasury allocated £200 million to it. Why spend half of what is asked for by the ports who said what they needed for their port infrastructure, which is only happening because of Brexit? Because of what the Government have done, the money has been spread more thinly and people are getting 66% of what they asked for, while 12 ports have got absolutely nothing at all.
I do not know what these investments are, to whom they are going and by when, because that has not come before the House—it is a decision the Cabinet Office has taken. It is deeply worrying that some ports that have asked for money for their infrastructure have got nothing and some have not got all they need. The ports infrastructure is absolutely critical to this Bill in terms of the smooth operation of our ports in 16 days’ time. It is beyond belief that the Government have not made this money available more quickly and that some of it is yet to be there. I ask the Minister to check the purse strings back at the Treasury to see if perhaps more money could be found, because it is important that ports have what they need in order to make this work.
With reference to the new clauses tabled by hon. Members on the Government Benches, or rather “Opposition to the Government” Benches, I am very concerned that they are trying to bring back the new clauses that the Government have taken out. These hokey-cokey clauses have been in and out, and the Government might as well shake it all about and put them back in again. It is damaging to our international reputation to have these clauses in the first place. They should not have been there in the first place, whether as a negotiating mechanism or anything else. They would breach international law, and the Government should have no business in breaching international law, particularly when that undermines their reputation in the negotiations.
I welcome the new clauses tabled by the Labour Front Bench in their recognition of the powers and what they are there for. Last week, I made the case that at many points in the Bill the Government are taking power for themselves and for the Treasury where they do not know what the power will be used for, and they cannot see what it will be used for, when it will be used or why it will be used. Anything that helps to hold the Government to account on the new powers that they are appropriating for themselves is welcome. I will support the new clauses if the official Opposition are minded to put them to a vote.
Through all of this, the Government have seized powers for themselves—it is not about taking back control to this place, but about taking control back from civil servants in Brussels to civil servants in Whitehall. We would all be well advised to look more carefully at the powers and how the Government intend to use them.
We have heard from my hon. Friend Sir William Cash about the importance of the “notwithstanding” clauses and about how unelected people should not seek to overturn democratic decisions. I agree strongly that we have seen attempts to overturn democratic decisions over the past four years, and they have been a stain on the democratic history of our country. We had a vote by the British people that had to be followed through on.
I disagree with my hon. Friend about the clauses, however. Putting them back in will not be viewed as an enormously helpful measure by those negotiating a deal, especially while our Prime Minister is out trying to get a deal that we can accept. Bringing the clauses back in will not be particularly helpful for that.
The Labour party has put forward some suggestions about providing clarity for business. That is a reasonable point because, clearly, we need to provide clarity for business. I come back from a business background, and knowing the environment that one is in helps to facilitate investment decisions. However, I have to say, the Treasury knows that. I spent some time working in the Treasury, and it gets that. It does not need to be told that. It will execute the Bill in as timely a way as it can, providing all the clarity that it can. That does not need to be legislated for.
We have had delays, because people have sought to overturn—ultimately, to negate—a democratic decision. I voted to remain in the referendum, but I immediately understood that it was a vote of the British people, and that the British people are bigger than individual politicians. Only recently have some people been able to work that one out.
The measures in the Bill are about the continuity of trade across all four parts of the UK. That is something that we should all be acutely aware of, because it is bigger than any other trade deal that could possibly be discussed anywhere.
The point in the Bill about creating a more level playing field between the online and the high street worlds of retail is, again, something that I think we should all be able to support easily. Everybody, I am sure, has had representations from retailers in their constituencies about how challenging the past few years have been. Obviously the clock cannot be turned back in any way—this is about embracing the future—but we must make sure that as retailers evolve the offer of our high streets, they are able to do so with a more level playing field. That is the objective we should be seeking in our policy.
I want to see such measures enacted as soon as possible, frankly. We are in uncertain times, and I want us to get to the position in which we can offer business as much clarity as possible, as soon as possible. I will therefore be supporting not the new clauses, but the Bill as it stands.
It is a shame that the Bill has been rushed through the House so rapidly. Members have had a short amount of time in which to get to grips with a rather technical and lengthy piece of legislation. The small number of amendments tabled today speaks to the incredibly tight time limits that have been put in place. Given the impact of the legislation on businesses operating across Northern Ireland and Great Britain, that concerns me, and it should concern us all.
For me, the Bill speaks to the heart of the many contradictions of Brexit—between what was promised in 2016 and what is being delivered today. We were told that Parliament will take back control, but this Executive, peopled by the same individuals who made those promises, have arguably more contempt for the legislature than any before them. That is summed up by an incredibly depressing piece of legislation, presented a couple of weeks ago, to repeal the Fixed-term Parliaments Act 2011, which attempts to engineer the first ever return of powers from the legislature to the Executive in our history.
However, the contradictions do not end there. A case in point is clause 6 of this Bill on the uprating of fuel duty for aviation gasoline, which, for me, is a microcosm of the whole Brexit process. The whole point of Brexit was to get our sovereignty back—was it not?—so that we could finally write our own laws rather than follow bureaucratic regulations from Brussels, the sort of stiflingly dull directives with boring names such as EU energy tax directive (Council Directive 2003/96/EC). We might have thought that directive was exactly the sort of red tape we would finally cut through in Brexit Britain, and yet the Bill proves that the reality is far removed from the rhetoric, because EU energy tax directive (Council Directive 2003/96/EC), which ensures that across the EU a minimum level of tax is applied on a whole type of aircraft fuel, is in this Bill being applied across the whole of the UK.
The explanatory notes rather patriotically inform us that,
“the UK is not bound to comply with the Directive in respect of Great Britain (GB) from
Turning now to the amendments, I agree with amendments 1 and 2 and new clause 3, tabled in the name of the Leader of the Opposition. Economic assessments have been conspicuously lacking over the past few months, covid notwithstanding: not only a lack of assessments of the impact of any potential deal with the EU, but the refusal of the Secretary of State for International Trade to tell us whether any of the trade deals she has struck will actually leave us any better off than our current trading relationships. The other conspicuous absentee when it comes to the economic impact of all this is the Chancellor. I find it very surprising that he has said very little about the threat of no deal, during a time when the UK finds itself in the midst of its worst economic crisis.
It is entirely right that we carry out proper economic assessments of all that, not least for Northern Ireland. I remember during the election campaign last year the Prime Minister was caught on camera telling Northern Ireland businesses that,
“Northern Ireland has got a great deal. You keep free movement, you keep access to the single market”.
In the words of the Foreign Secretary, Northern Ireland has “a cracking deal” because it has access to the EU market. Meanwhile, as we teeter on the edge of no deal, we are told by the Culture Secretary that things “will be choppy”, but that “we can survive”. I am sure those words will be a comfort to many of my constituents.
Finally, I turn to new clause 1 and new clause 2. During the debate on the United Kingdom Internal Market Bill earlier, I spoke about what a disaster the notwithstanding clauses in that legislation were for the future of the UK and elsewhere. I will not repeat myself, because exactly the same applies here; all I ask is for the Minister to give a guarantee that, if there is no deal with the EU, international lawbreaking clauses will not be introduced in this or any future business. We cannot afford to let a no-deal scenario be a proxy for further actions that are hugely damaging to our international reputation. For that to be the UK’s first action once it left the EU would be a truly regrettable matter indeed.
It is a pleasure to be called to speak in this debate. I will speak particularly to new clause 1 and new clause 2 because, as my hon. Friend Sir William Cash said, this is a matter of sovereignty. I am very keen to explore where sovereignty ends and international law starts, and that is right at the heart of those new clauses, I guess.
We have made reference several times in these debates to section 38 of the European Union (Withdrawal) Act 2020, where it says that,
“the Parliament of the United Kingdom is sovereign.”
If that is the case, and I accept that it is the case in areas of our jurisdiction, is there a need to reiterate it in every piece of legislation, or is it simply a fact that Parliament is sovereign?
My hon. Friend has rightly stated quite clearly that the UK Parliament has a general power to override treaties, but I am very keen to understand how that works in the sphere of international treaties, particularly in terms of trade agreements. As I quoted in my intervention earlier, there was a case between Mexico and the US, settled in 2009, where a US company, Cargill, took the Mexican Government to court on the basis that they had breached the general agreement on tariffs and trade regulations of 1994. The Mexican Government had applied some punitive tariffs on soft drinks coming from the US, produced by Cargill and other companies, which effectively blocked access to the Mexican market.
Let me respond briefly. This provision is really going to apply only where there is an impugnment —an infringement—of sovereignty itself. In this case, the entirety of our leaving the EU, as is well understood by the EU and provided for by article 50, and which we have done lawfully, demonstrates that when the EU and the remainers start prattling on about the idea that somehow or other we should do it on their terms, which is the basis on which the whole thing was constructed when the negotiations began, however many years ago it was—I cannot quite remember, as it seems so long ago—we see that the bottom line is that they have acted in bad faith. That is the problem. If it were not for that —we had reasonable negotiations—we probably would not be having to discuss these matters now. Most recently, we have seen that over the state aid rules, with their saying, “We’re going to punish you if you don’t do what we want.”
I am grateful for my hon. Friend’s intervention. I have great sympathy with his points. The difficulty is that when we are in an international agreement, there is a judgment as to whether they are “acting in bad faith” or “prattling on”, and they are subjective judgments he makes. All international trade agreements need an independent body to decide who is breaching the agreement. If Parliament is simply sovereign and is able to say, “In our judgment, you are breaking the agreement”, all trade agreements would fall apart. We saw that in the case of the Mexican Government and the breaching of the terms of GATT, where that judgment was made unilaterally. The independent body, which was the arbitration council of the North American free trade agreement, settled the dispute. That is an international body; it is not subject to one national jurisdiction or the other. There has to be someone who adjudicates; we cannot simply have national sovereignty making a judgment on these points. That is why we have these investor-state dispute settlement bodies.
All too often in international trade agreements it does come down to power and sovereignty. President Trump has regularly used national security as a good reason to impose tariffs and override World Trade Organisation rules. The EU, for years, ignored state aid rules to promote Airbus. I can perfectly understand what it was trying to do. It took a long time to catch up with it and in practice the damage, from the WTO point of view, was done.
Therein lies the difficulty, does it not? As soon as a nation, however powerful, is allowed to make a subjective judgment, it leads to international chaos. We can have international agreements that people sign and adhere to, with independent resolution. My point is that as soon as we have done that, we have handed over the settlement of the issues and disputes to another body, and we are, in effect sharing some of our sovereignty. We do not have total sovereignty at that point. We have sovereignty to sign the agreement and to exit the agreement, but I cannot see how using sovereignty to override an agreement works. I think it would result in chaos.
This is about when the issue of the override is to do with sovereignty itself—that is the point. That is why this matter is essential. That is why international law actually recognises it, in article 46. My hon. Friend Sir Robert Neill accepted that, as, indirectly, did Lord Judge, on this Bill. So, for practical purposes, I have quite a lot of support, even from those who originally opposed my proposals.
The trouble with new clause 1 is that it says the provisions have effect
“notwithstanding any relevant international or domestic law”.
Subsection 2(g) states that that means “any other legislation”. This Parliament’s decision would affect any other legislation, and so this is an overarching amendment. The key thing is that we would all agree that international agreements and free trade are important, and we need to make sure they are fair on all parties subject to those agreements. We must not forget that this is a two-way street. We want the other signatories to these trade agreements—be it Canada, Japan, the EU or whatever—to adhere to these agreements as well. It is not just about the UK heading into these agreements. We partly do that through the agreement itself, of course, but also through the soft power that the UK holds and the respect that people have for the United Kingdom.
There are some special circumstances regarding the withdrawal agreement, because there were two sides to the coin. Yes, there were the commitments that we made under the withdrawal agreement and the Northern Ireland protocol, but there was also the EU’s commitment to use its best endeavours to deliver an ambitious free trade agreement. As Members on both sides of this Chamber have said, there is no doubt that some of the things that the EU has done over the past few months have indicated that it was not using its best endeavours and that it was acting in bad faith, particularly on things such as requiring exit summary declarations for products manufactured in Northern Ireland and then shipped to the rest of the UK. That is simply unacceptable. As Hilary Benn said, what on earth would the EU do with these things if we exported them from Northern Ireland to the rest of the UK? Describing all goods that went from Great Britain to Northern Ireland as “at risk” would also be simply unacceptable. I was very pleased that those key issues were resolved last week. It largely went by without notice or recognition from many Opposition Members and some parts of the media. New clauses 1 and 2 are interesting. I will not be supporting them, but I will be supporting the Bill.
It is a pleasure to see you in the Chair again, Mr Deputy Speaker.
When I put my name down to speak in this debate, I guess I did so more out of intrigue than expectation, given the shenanigans and the boorach of last week. We all saw what unfolded over the Ways and Means resolutions, the Bill coming 24 hours later and then off to Committee of the whole House, where nothing changed whatever. A week later, here we are on Report, with, as far as I can see, a very clear likelihood that the Government’s Bill will move forward without a single change, despite the best valiant efforts of Sir William Cash and his desire again to get the Government to break international law.
In that regard, I must pause and reflect; I find it utterly fascinating that, despite getting what they appear to want, Members of this Parliament who have—from what I have heard—seemingly spent their entire lives working towards the political cause of leaving the European Union still seem thoroughly unhappy. I take a little bit of joy in knowing that they are so bitterly disappointed that even their friends in the Government still refuse to do just what they want. Now, I cannot be the only one who has looked at Twitter, and it appears that there may well be a breakthrough in terms of an EU trade deal. I do not know whether the Minister is sighted on the developments on this occasion, because I do not think he was last week, but I do not think that I am overreaching or overstepping in any way, shape or form to suggest that, although that may be the case, the hon. Member for Stone may still be unhappy.
I am so glad. I can only say that, actually, sovereignty is not just a theoretical concept; it is a practical necessity. It is on the basis of that that we are able to enter into arrangements internationally that are justified by our own terms of reference. The problem with the EU is that it wants to impose its terms of reference, and it never wanted us even to be able to compete with it as a third country after we had left. But it could not deny that it was lawful, so it resorted to all these other obstructions.
I admire the hon. Gentleman’s repetition, but ultimately, when it comes to sovereignty, there is only one sovereignty that I am interested in: the sovereign will of the people of Scotland. When we look at the European Union in terms of sovereignty and the will of the people of Scotland, our views have been completely ignored. The people in my constituency voted overwhelmingly to remain. Aberdeen city as a whole is projected to be the hardest hit city in the entire UK as a result of Brexit, irrespective of whether we get a deal or not. Although I do not want to encourage the hon. Gentleman any further, I simply cannot understand the premise of his argument—that he is willing to break international law and is talking about sovereignty, while simultaneously rejecting the sovereign will of the people of Scotland.
No, the hon. Gentleman has had plenty of opportunities to intervene and, indeed, speak today, and I think I will be doing everyone a favour if I just continue. I see that the Minister is laughing as well.
On the purpose of the Bill, I would like to reflect on the comments of the shadow Minister, Mr McFadden, because what he said was incredibly important. I apologise if I am misquoting him but I think he talked about the Bill hovering as a threat. That is an important point to reflect on, particularly as we look at what was being undertaken last week and the entire process that we have gone through.
I want to conclude, because I am aware that I am close to havering, and in Scotland, when someone starts doing that, they should probably sit down. As we look forward to what the Bill will do for online sales and the level playing field that it will create on VAT sales, which is important—I see Kevin Hollinrake nodding his head, and it is worth repeating that we agree on this point—we know that that level playing field should go further, because Northern Ireland will, in effect, have a beneficial agreement compared with anywhere else in the United Kingdom, be that Wales, England or Scotland. The level playing field that the Government are putting in place for online sales should also apply to Scotland to help our ability to access EU markets, and I would encourage the Minister to reflect on that point.
I rise to speak to new clause 3 and amendments 1 and 2. Three years ago, we were given the advice that this deal was going to be the “easiest in human history”. As we have just heard in the past hour or so, it is not quite as easy as some expected, and here we are with just 16 days to go. I appreciate that the Government are trying to manage expectations by talking about no deal, but in the last 30 minutes or so there has been lots of speculation online about whether a deal may have actually been struck.
Yesterday, I was listening to someone from an independent freight haulage company based in Nuneaton in north Warwickshire, and they were saying how frustrated they were by the lack of clarity coming from the Government. They were talking about the 300% to 400% increase in paperwork that they were expecting, the mixed messages from the Government, the fact that they had had to invest in new software and the fact that the lorry parks were not ready. I guess this is why the amendments and new clause 3 that my honourable colleagues have tabled, which I support, are so important. Being so close to the end of the transition period, we urgently need clarity for our businesses.
We on the Labour Benches just want to get a deal done, contrary to what is being said by some in the Chamber, because at the end of the day this is all about ensuring that our businesses have a prosperous future—have a future, indeed—and that we protect people’s jobs and livelihoods. That is why no deal would be absolutely desperate for so much of our economy, particularly in the wake of the pandemic. Like my right hon. Friend Mr McFadden, I really do not understand why it has taken so long for this Bill to be published. It seems that the Government were holding it back as one of their cards—maybe again threatening to break international law and damaging our reputation—but businesses cannot plan on that basis. They cannot work on a last-minute approach. That might work in negotiations in the political sphere, but it has been damaging for business. Rather than having messages such as a “check, change, go”, they have been demanding the substantive advice from the Government which, sadly, businesses across my constituency have not been receiving.
I spoke earlier to one of those businesses—a retailer and importer—and it said, “This is utter chaos. We desperately need clarity and urgency, so that we can start planning, but at the moment we cannot get hold of the goods that we’re going to be able to sell in the first quarter of next year.” I understand what John Redwood said about UK sovereignty, but the quid pro quo is about access to markets and obligations. I liken it to how businesses have to work. If they want to be in the app market and use the Apple platform, they have to pay to be part of that. If they want to be on the Sony PlayStation platform, they have to pay to access that. It is the same with the European market.
Does the hon. Gentleman not understand that, from
Our biggest and nearest customer is the EU. It is a critical customer and supplier to so many businesses in the UK, particularly in our manufacturing sector.
Let me briefly turn to the Northern Ireland protocol. We were told that there would be no checks, but as of last week, we have seen the need to implement new checks and controls for goods moving from Great Britain to Northern Ireland and, to a lesser extent, from Northern Ireland to Great Britain. The Government have said rather vaguely that a significant majority of internal UK trade will be tariff-free. I would be interested to know what assessment the Government have made of the precise percentage of GB-Northern Ireland trade that will be and the volume and value that will be subject to tariffs.
That is why these amendments are important. They are aimed at injecting urgency, with just 16 days until the transition period ends. Businesses want clarity and certainty, and they need it urgently. The intention of new clause 3 and amendments 1 and 2 is simply to demand that the Government make clear when they will propose the secondary legislation flowing from the Bill, to help those businesses. The Food and Drink Federation has said that the guidance is being published too late, and 43% of its members that supply Northern Ireland have said that they will not be able to do so in the first three months of next year. Our amendments are very similar to those proposed and, sadly, voted down in Committee. They are vital to assist our businesses and are business-friendly, as the Opposition are.
I cite the disruption that we are in danger of allowing. We have seen what happened with Honda—one of the most efficient companies on the planet. That should be the canary in the mine. If Honda is not able to get parts from its supply chain here to the UK, what hope is there for small and medium-sized businesses across the UK? Whether they are a clothes retailer or a car manufacturer, they just want clarity and certainty. They want an uninterrupted supply of goods into the first quarter of next year. Given the damage already done by the pandemic, we cannot afford further economic disruption. The Government need to move swiftly. That is why new clause 3 and amendments 1 and 2 are so important, and that is why I am supporting them.
I am grateful to everyone who has contributed to the debate. I will address the proposed amendments and then come to the specific points that have been raised.
New clauses 1 and 2, tabled by my hon. Friend Sir William Cash, would, if adopted, mean that the provisions in the Bill would apply notwithstanding any domestic or international law. The House will be aware that on
We do not really know exactly how the Northern Ireland protocol is going to be interpreted, nor do we actually know its full content, and the Chancellor of the Duchy of Lancaster is declining to appear before my Committee to explain it.
What we do know is that the agreement was reached by the Chancellor of the Duchy of Lancaster acting for the Government on a duly legitimately and democratically elected basis in the exercise of our national sovereignty, and that should, I think, be enough for my hon. Friend.
These clauses were previously introduced as reasonable steps to create a safety net so that the Government would always be able to discharge their commitments to the people of Northern Ireland in the event that a negotiated outcome could not be reached in the Joint Committee. Following intensive and constructive work over the past weeks by the UK and the EU, the Government have now reached an agreement in principle on all issues in relation to the protocol on Ireland and Northern Ireland. This is an agreement that discharges the Government’s commitment to the people of Northern Ireland to ensure that there are no tariffs on goods remaining within the UK customs territory.
As part of the agreement, the Government committed to removing the notwithstanding provisions in the United Kingdom Internal Market Bill and not to introduce them or any similar provisions in this Bill. As was noted by the Chancellor of the Duchy of Lancaster in his statement to the House last week, in view of the agreement these provisions are no longer required. On that basis, I hope the House can agree that new clauses 1 and 2 are unnecessary.
New clause 3 and amendments 1 and 2 tabled by the Opposition would, if adopted, require the Treasury to publish guidance setting out its proposed approach to any reliefs, repayments and remissions for which the Bill allows provision to be made. The provisions contained within the Bill ensure that the Government have the flexibility they need to establish the framework for such reliefs, repayments and remissions. Details of any policies along these lines would be announced in due course, and HMRC will publish detailed guidance providing certainty to traders and businesses, as is its normal procedure. For this reason, putting such additional provisions in the Bill is unnecessary, and therefore I urge the House to resist these amendments.
New clause 3 would, if adopted, require the publication of various reports setting out the timeframes in which the customs duty charges contained in clauses 1 and 2 would be implemented as well as the factors taken into account when using these powers. The provisions contained in clauses 1 and 2 allow the Government to establish customs charging provisions to support the practical application of article 5.1 and 5.3 of the protocol and to deal with the movement of goods from Northern Ireland to Great Britain. This is important legislation, which will ensure that the Government are able to implement the Northern Ireland protocol as required in UK law ahead of the end of the transition period. The regulations that set out the detail of the charging regimes will be laid after the Bill receives Royal Assent.
This Bill thus provides the framework, and the detail will be provided alongside the relevant regulations. When bringing forward regulations the Government will also provide explanatory material in the usual way.
If I may, I will now turn to some of the questions raised by Members who spoke in the debate. Mr McFadden encouraged the Government to get a move on; as he will know, the Government have been proceeding extremely rapidly and energetically in this area ever since the issues first arose. He also asked about guidance, and of course he is right that in the normal course of these things guidance will follow the publication of the Bill, but he also ought to be aware that the guidance that will be published follows the Northern Ireland protocol and the Command Paper and that in relation to other matters, which is what I was referring to, the House has seen customs guidance on
The right hon. Gentleman asked what new systems are being put in place, as did my right hon. Friend John Redwood, so let me respond on that. My right hon. Friend will be aware that, in terms of the agreement for at-risk and not-at-risk goods, there is a requirement for there to be genuine and substantial use for the goods to be classified as at-risk. HMRC expects there to be up to 11 million declarations in relation to trade between Great Britain and Northern Ireland, and the Customs Declaration Service, which has been put in place, has a minimum viable product up and running as we speak.
Alison Thewliss referred to hokey-cokey clauses, but of course the clauses have never been included. They were themselves a response to a perfectly plain concern, which every Member of the House should feel, that, as matters stood, even a bag of salad would be considered an at-risk good, a consequence of the previous understanding that was patently absurd and which has been removed by this change.
Matt Western talked about a last-minute approach, but I would remind him that when this point, or this attempted point, was made by the shadow Chief Secretary, Bridget Phillipson, I asked her if she could recall a single occasion when the EU had ever failed to negotiate except at the very last minute of a negotiation, and she was unable to point to such a case. That is, I think, the principal reason why we are in the position that we are in.
With those remarks, I would urge the House to resist these amendments.
We have had an interesting debate and, as far as I am concerned, the Government had originally proposed putting these clauses in the Bill itself. I personally think that they will find, in due course, a necessity to have something that is on exactly the same lines, and the same applies to the UKIM Bill. However, in the circumstances, because I want this Bill to go through, I beg to ask leave to withdraw my new clause. I just simply say: sovereignty is indivisible.
Clause, by leave, withdrawn.