EU Exit: Future Relationship White Paper - Statement

Part of the debate – in the House of Lords at 2:19 pm on 12 July 2018.

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Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench 2:19, 12 July 2018

My Lords, I am grateful to the Minister for making sure that we, unlike our friends in another place, were able to read the White Paper. I have got as far as page 16 and it is there that I would like to ask for some elucidation. It is very good that we have at last put some cards on the table. That is a couple of years too late but better late than never. The White Paper is clearly a very substantial body of work, which will take a lot of reading by us and, I would have thought, a great deal of negotiating in Brussels.

I want to start on an element which the Minister highlighted. The FCA or facilitated customs arrangement, referred to on page 12 of the Statement and pages 16 to 18 of the White Paper, says:

“As if in a combined … territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy … 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”.

I have two questions. First, what happens at Dover to goods from, say, Asia which entered the EU via, say, Rotterdam? Where do the customs dues, tariffs and quota checks take place?

Secondly, as the Minister will be well aware from his long experience in the European Parliament, customs dues are an own resource which go straight into the common EU budget and it is 11 years since OLAF, the antifraud agency, started warning us that our border controls on Chinese textiles and footwear were inadequate. We are now in court for unpaid duty, calculated at more than €3 billion over a 10-year period. As he will be well aware, too, we are also in court over VAT fraud at Felixstowe, where the charge against us is $3.2 billion. Does he really think that once we have shaken off the ECJ, the Commission and OLAF, we will be accepted as trustworthy collectors of the EU’s external tariffs and customs duties at our ports, against the background that it believes that we have consistently under-counted for the last decade, having admitted false invoices and incorrect value declarations? How are we going to persuade the European Union that, as non-members of a customs union, we should collect the duties which go straight into its common budget? Would it not be simpler simply to have a customs union, as this House voted for by a majority of 123?