Power to make provision in relation to VAT or duties of customs or excise

Taxation (Cross-border Trade) Bill – in a Public Bill Committee at 3:15 pm on 1st February 2018.

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Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader 3:15 pm, 1st February 2018

I beg to move amendment 120, in clause 51, page 34, line 39, leave out second “appropriate” and insert “necessary”.

This amendment provides that the power to make regulations about VAT, customs duty and excise duty in consequence of UK withdrawal from the EU is only exercised when it is necessary to do so.

With this it will be convenient to discuss the following:

Amendment 97, in clause 51, page 35, line 4, at end insert—

“(c) may not be made after 29 March 2021.

‘(2A) The Secretary of State may by regulations amend the date in paragraph (1)(c) to ensure that the day specified is at day that any transition period related to the United Kingdom’s withdrawal from the European Union comes to an end.

(2B) A statutory instrument containing regulations under subsection (2A) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This amendment inserts a sunset provision that disallows any regulations to be made under Clause 51 after 29 March 2021, while also allowing the Secretary of State to alter that date, by regulations subject to the affirmative procedure, in the event that this is not the date on which any transition period following the United Kingdom’s withdrawal from the European Union comes to an end.

Amendment 98, in clause 51, page 35, line 10, after “section” insert “, apart from regulations under subsection (2A),”.

This amendment is consequential to Amendment 97.

Amendment 99, in clause 51, page 35, line 25, after “apply” insert “, apart from regulations under subsection (2A),”.

This amendment is consequential to Amendment 97.

Amendment 87, in clause 51, page 35, line 38, at end insert—

“(10) No regulations may be made under this section after the end of the period of two years beginning with exit day.

(11) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”

This amendment limits the duration of the delegated power under Clause 51 to the period ending two years after the United Kingdom leaves the European Union.

Clause stand part.

Amendment 88, in clause 52, page 36, line 32, at end insert—

“(7A) No regulations may be made under this section after the end of the period of two years beginning with exit day.

(7B) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”

This amendment limits the duration of the delegated power under Clause 52 to the period ending two years after the United Kingdom leaves the European Union.

Clause 52 stand part.

Clause 53 stand part.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

I will speak to amendments 120 and 97 and skim over consequential amendments 98 and 99. I will also mention Labour amendments 87 and 88.

Amendment 120 is an old discussion that we had with the Minister earlier in the debate. We ask for the second “appropriate” to be left out and replaced with “necessary”. That would mean that the powers to make the provision in relation to VAT or customs or excise duties would be made as the appropriate Minister considered necessary in consequence of, or otherwise in connection with, the withdrawal of the UK from the EU.

We have had the discussion before about whether it is best to have “appropriate” or “necessary” in these sections, but it would be sensible for Ministers to make a regulation that they thought was necessary rather than appropriate. The former is a stronger word—the Law Society of Scotland believes that it is a stronger word and has a more appropriate legal definition in this regard. It would be good if the Minister would consider making the change we are asking for in amendment 120.

On the first part of clause 51, I have heard concerns about some of the stuff that has not been written into UK law either through this Bill or possibly the European Union (Withdrawal) Bill. The shipwork end-use relief from customs duty is in EU law—it is a relief that people who bring things in for use offshore have from customs duty. It is written into EU law, but I have not been able to find in this Bill where it is written into UK law —perhaps it is in the European Union (Withdrawal) Bill. The offshore industry rely on it heavily and it would make a big difference, specifically on charges.

The shipwork end-use relief is relied on only for imports coming from third countries, but given that imports from the EU would now be potentially subject to customs duty, if the Government do not manage to get a deal to be in a customs union, it will become more applicable and will apply to many more products and goods coming through. It will be necessary to write that into UK law at some point, and I would very much appreciate a commitment from the Minister on that. A lot of companies that transport goods offshore, which particularly affects my constituency, would appreciate knowing the direction of travel in relation to this relief.

Amendment 97—the Scottish National party amendment that would apply a sunset clause to clause 51—serves a dual purpose. It submits that there should be a sunset clause and makes the case that regulations may not be made under the clause after 29 March 2021, but it would also change the procedures for the making of regulations, asking that they are made using the draft affirmative procedure. As we have discussed at some length, the draft affirmative procedure would be better than either the negative procedure or the made affirmative procedure. It would mean that no changes are made before Parliament has the opportunity to scrutinise them because they would be laid in draft rather than created and then consulted on with Members. That is why we are asking for both of those changes.

Although this is my first chance to talk about sunset clauses, we have had a fairly lengthy debate on them and they have been covered by various Members. Labour Front Benchers asked earlier why sunset clauses should be applicable to the European Union (Withdrawal) Bill but not this Bill. Even though they are separate pieces of legislation, I actually believe that, in this Bill, it is reasonable for Ministers to have one process relating to the setting up of a customs or an excise regime, and for that process to be different ever after. That is why a sunset clause would be a good change in that regard.

If future Governments are to make such changes, they should be subject to more parliamentary scrutiny. I have said to the Minister previously but remind him that the Conservative party will not be in government forever—I hope not—and in that case they will be sitting in opposition, unable appropriately or extensively to scrutinise the measures. That is a major concern given that the delegated powers in the Bill allow for the Government to make radical changes without the need for much in the way of parliamentary scrutiny.

I am sure the Government do not intend to give a future Labour Government a free rein drastically to alter the customs regime, but unfortunately the way the Bill is written would give them that right. I get the impression that I would be more likely to favour the Labour party’s customs regime than the Conservative party’s, but none the less no Executive should have the power to do all those things by using such things as the negative procedure. The made affirmative procedure is not even strong enough in some cases.

Labour amendments 87 and 88 are grouped with other amendments on sunset clauses. If they put the amendments to the vote, I will support them, because I believe a sunset clause is appropriate for the provisions made in clause 51.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I wish to speak for what I will believe will be the final time in Committee. [Hon. Members: “Oh.”] There is always Report stage; we know the procedure here. I will speak to amendments 87 and 88, which relate to clauses 51 and 52. The explanatory statement for amendment 87 reads:

“This amendment limits the duration of the delegated power under Clause 51 to the period ending two years after the United Kingdom leaves the European Union.”

Amendment 88 would apply the same limits to the powers entitled under clause 52.

These are obviously a fairly similar set of arguments to those we have just heard relating to clause 45, but I think we have clearly established that there are strong reservations about the use of delegated powers under the Bill and its democratic implications. The famous House of Lords Delegated Powers and Regulatory Reform Committee said specifically in its report that clause 51, which relates to VAT or duties of customs or excise, is such that a sunset clause would be possible and welcome. As the Lords report said, clause 51 contains a very wide power that, in the words of the Treasury itself

“is necessary to ensure that the Treasury and Secretary of State have the ability to deal with the consequences of withdrawal from the EU and to maintain fully functioning and legally operable customs, VAT and excise regimes in a range of scenarios”.

It is about withdrawal from the EU, yet the powers would give considerable scope to the Executive to shape the regime for many years, perhaps decades, into the future. That is surely why a recommendation for a sunset clause relating to clause 51 is appropriate.

I will briefly refer to the testimony of Mr Joel Blackwell of the Hansard Society to the Committee regarding clause 51. He stressed that a sunset clause amendment was suitable, that the clause’s powers are not required to be used in perpetuity, and that similar sunset clauses to those included in clauses 7 to 9 of the European Union (Withdrawal) Bill would bring consistency and thus make “perfect sense”. He supported the view of the Lords Committee.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons) 3:30 pm, 1st February 2018

Is it not important that the Government take account of the evidence we have had from the Hansard Society supporting protections from whoever happens to be in Government in the future?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

I firmly agree. Members on both sides of the Committee have referred to the testimony the Hansard Society gave in the evidence sessions. It is not just the Opposition who have concerns. I would very much like to be a real, not shadow, Treasury Minister one day. Even then, we would require the proper checks and balances to be in place. It still seems counter-intuitive to include time limits in the overall European Union (Withdrawal) Bill but not in today’s Bill, when the principles we have established apply similarly to both. As with our other arguments on sunset clauses, we do not see how the Government can justify the use of the powers in the clause in perpetuity. We have established that that should not happen, and the Government have not yet been able to refute that case.

I emphasise again that we all have a duty to check the powers of the Executive and to ensure that we do not allow them to change the balance of power permanently in their favour. The time period of two years should be generous enough to fill any gap in provisions that may come about from the end of delegated powers through other channels. Sunset clauses provide a vital check on delegated powers, and I urge members on both sides of the Committee to support the amendment to help to mitigate the constitutional risks introduced by the Bill.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

It is important that we deal with the question raised by the amendment regarding sunset clauses. The Government originally did not want any of the sunset clauses in the European Union (Withdrawal) Bill, but they were required or forced—people can call it what they will—by hon. Members from across the parties to put in sunset clauses. We were told at the time that the inclusion of a sunset clause in that Bill would result in the end of civilisation as we know it. Of course, someone threw a bucket of water over the Government, and they freshened up and realised that they were not going to get away with not having sunset clauses.

The Government have persisted in Committee—they might be doing the same with the Trade Bill—to argue against sunset clauses. They would have us believe that sunset clauses are some foreign or alien concept in parliamentary democracies. Well, they are not. There were even sunset clauses in the nuclear deal with Iran. Sunset clauses exist in all sorts of legislation, including treaties—and we have some 3,000 treaties. They exist right across the piece in legislation. Indeed, the coalition Government, when introducing the Enterprise and Regulatory Reform Act 2013, basically insisted on sunset clauses to reduce the legislative burden. When it suits the Government to have a sunset clause, they will have a sunset clause; in fact, they introduced an Act to have sunset clauses. They are now telling us that sunset clauses are outrageous, and will somehow mess up the whole VAT regime.

Other countries have sunset clauses. For example, sunset clauses in Texas mean that, after 10 or 12 years, some agencies will cease to exist unless they can prove their appropriateness, consistency and status. They have to go through that process. Even organisations have sunset clauses applied to them and they have to show how relevant they are.

The Prevention of Terrorism Act 2005 had a sunset clause. In the past, sunset clauses have been applied to the effectiveness of legislation, and yet we are now being told today that they are somehow outrageous and that the whole Government will grind to a halt if we have them.

Some Canadian legislation—in fact, a whole range of Canadian legislation—has an automatic five-year sunset clause. The Canadians manage perfectly well with sunset clauses. The question is: are this Government so fearful of a sunset clause, so fearful of challenge and so fearful of scrutiny, particularly in relation to this amendment, that they do not want sunset clauses?

There are even sunset clauses in Australia, and they seem to manage. Australia has general sunset clauses; they are not even specific. They have sunset clauses for whole swathes of legislation and they manage perfectly well. South Korea also has sunset clauses. Perhaps that is why it has such a booming economy—because the sunset clauses mean that, time after time, they test and challenge. The only sunset clause in North Korea, no doubt, is the sunset on democracy. We do not want that; we want sunset clauses for the powers this Government have taken for themselves.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Economic Secretary (Treasury)

My hon. Friend is making a fantastic speech about the applicability of sunset clauses around the world. Again, however, we have to get back to this point: if the Government still need these powers after the sunset clause is done and the powers no longer exist, they simply have to come back to Parliament. It is not the case that they do not have the power to deal with things; a strong, united Government, with a parliamentary majority, would quite easily be able to come back and put on the statute book anything they needed. That argument simply has not been addressed by the Government.

Order. Before I call Mr Peter Dowd, I will say that we are all immensely interested in South Korea, Texas, Australia and all the other places he has listed, but could he get back to this particular amendment?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

I was trying to show that in this case there is a requirement for a sunset clause. It is absolutely crucial that we have sunset clauses and I am trying to show—I know that you will appreciate this, Mrs Main—that they are capable of being delivered.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Is not having a sunset clause in place definite evidence of Parliament taking back control, not just now but into the future?

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

That is spot on. We have raised that issue time after time. Having sunset clauses and taking control back is a sign of a confident Government who are strong and stable and know their direction of travel. That is why I am sure that every Government Member of the Committee will support the amendment’s specific proposal for a sunset clause.

Photo of Graham Stuart Graham Stuart Assistant Whip, Parliamentary Under-Secretary (Department for International Trade)

I just want to pay tribute to the hon. Gentleman and to the Labour party, because Labour does not just talk about sunset clauses; it actually works on them. And it is noticeable, frankly, that with real momentum behind sunset clauses, moderate leaders, councillors and moderate MPs are being hounded out. That is a true sunset clause.

Again, Mr Dowd, we will stick to what we are talking about here.

Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury

We want transparency and openness, and that is why we are demanding sunset clauses, unlike the Under-Secretary of State, who would like this House to be as dark as Erebus. We want a sunset clause, and Parliament, the people and the Hansard Society all demand a sunset clause. We insist on sunset clauses and we will persist in insisting on them.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

Clause 51 confers a power on the Treasury or the Secretary of State to make regulations for VAT, customs or excise in consequence of, or otherwise in connection with, the UK’s withdrawal from the EU.

The Bill contains a comprehensive set of provisions to establish a stand-alone customs regime and to ensure that VAT and excise legislation will function as required on EU exit. The Bill does that through a mixture of primary legislation and powers to make subordinate legislation. Together the provisions will allow us to deal with a range of negotiated scenarios, as well as to prepare for a non-negotiated scenario. That will ensure that the UK’s customs, VAT and excise regimes function as required upon EU exit and thereafter.

The UK’s future arrangements for customs, VAT and excise will become completely clear only when negotiations are concluded. We cannot of course be certain what the detailed arrangements to be agreed will be, which is why the power in the clause is drafted as it is and why it is not possible to give an exhaustive list of the situations in which the power may be used. For example, we will need to use it to implement agreements with the EU that might involve alternative provisions to those made in the Bill, such as different amendments to those made to the VAT Act 1994 by schedule 8. Equally, the power will need to be used to address deficiencies similar to those dealt with in clause 7 of the EU (Withdrawal) Bill, to amend existing legislation to ensure that it is consistent with replacement domestic legislation; to legislate for policy decisions made in preparation for, or as a result of, a non-negotiated scenario; to transition existing EU trade remedy measures; or to legislate to deal with unforeseen developments arising from EU exit.

It must be noted that that the power is not an unlimited one: the scope of the power is, first, limited to VAT, customs and excise legislation; and, secondly, to changes that are made in consequence of, or otherwise in connection with, EU exit. As changes potentially required as a consequence of, or in connection with, EU exit may relate to primary legislation, the power extends to amending primary legislation, including the Bill. Given that we need to prepare for or implement a range of outcomes, including those that may differ from those set out in the Bill, it is appropriate that the power permits the Bill itself to be amended.

The affirmative procedure will be required for any use of the power to amend primary legislation in consequence of, or otherwise in connection with, EU exit. Any regulation that makes changes to primary legislation will have to be approved by the House of Commons if it is to have effect beyond the 28-day period starting from the day it is laid. That is unless clause 52 applies, in which case the relevant period extends to 60 days. The clause itself will make no changes but confers a power on the Treasury, or the Secretary of State, to make changes in the future in consequence of, or otherwise in connection with, EU exit.

Amendment 120 seeks to ensure that the power to make regulations under the clause is exercised only when it is necessary to do so. The Government oppose the amendment because it limits their ability to prepare effectively for EU withdrawal. The Bill is drafted to cater for a variety of long-term outcomes from negotiations on the future relationship with the EU.

In that context, the power is necessary to ensure that the UK can deal with a range of possible consequences of, or matters arising in connection with, EU withdrawal, and maintain fully functioning customs, VAT and excise regimes in a range of scenarios. Changing the wording to “necessary” may narrow the power in such a way that the Government cannot prepare effectively for EU withdrawal. That is because some of the uses for the power may be appropriate, but it may be hard or cumbersome to prove that they are necessary. For example, policy decisions may be made in consequence of, or in connection with, EU withdrawal where one option is chosen over others. That is “appropriate”, but it may be said that they are not “necessary”, since one option is not necessary in the sense that other options are available.

Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (Treasury)

Surely in that case it would be possible to specify that one of the two options will be chosen and that that is a necessary choice between the two. I am struggling to grasp the need to avoid the word “necessary”.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

The point I would make to the hon. Lady is that if we had more than one option, one of them may be appropriate but not necessary, because if we chose that particular option there would necessarily be another option that could be chosen. The essential point is that the word “necessary” is not necessary, but in fact unhelpful—[Interruption.]

Order. The Minister is making a very valuable point.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

It is difficult to sound exciting or entertaining when discussing a single word.

But you are succeeding.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

There are moments. Amendment 97 inserts a sunset provision disallowing regulations to be made under the clause after 29 March 2021, while also allowing the Secretary of State to alter the date so that the date of sunset relates to the day of the end of a transition period. Amendments 98 and 99 are consequential to amendment 97. The Government oppose the amendments because they too would limit our ability to prepare effectively for EU withdrawal. We do not yet know the outcome of negotiations with the EU. Therefore, it would not be prudent to include a sunsetting clause at this stage.

Although the amendments provide for a way to extend the period during which regulations may be made under this power, the Government’s ability to deal quickly with developments in negotiations would be limited. Regulations may need to be made under the power to deal with unforeseen developments quickly. For example, an agreement with the EU relating to VAT, customs or excise may be reached very close to 29 March 2021, and there may not be enough time to make and lay the relevant draft regulations between the conclusion of that agreement and 29 March 2021. Regulations may therefore need to be made after 29 March 2021, but under the amendment, they could not be, which would limit the ability of the Government to prepare for and react quickly to last-minute developments. The risk is that the UK will not be able to maintain operable customs, VAT and excise regimes if there are last-minute developments in negotiations close to the end of the implementation period.

Amendment 87 seeks to limit the duration of the delegated power under clause 51 to the period ending two years after the United Kingdom leaves the EU. The Government oppose the amendment as it too would limit the Government’s ability to prepare effectively for withdrawal. The points that I have made in relation to previous amendments also apply here. We do not yet know the outcome of negotiations with the EU, so it would not be prudent to include a sunsetting clause at this stage. Furthermore, the power is not unfettered. It has a built-in safeguard, which is that regulations can only be made in consequence of, or in connection with, the withdrawal of the UK from the EU.

Clause 52 allows subordinate legislation to be made containing a provision that it is to have effect on a day appointed by the Treasury in regulations. It also amplifies existing powers to make subordinate legislation to permit supplementary, incidental or consequential provisions, and transitional or transitory provision or savings to be made. The Bill provides for the creation of a stand-alone customs regime and ensures that the VAT and excise regimes operate as required after leaving the EU.

A number of pieces of subordinate legislation will be made by statutory instrument, in connection with, or as a consequence of, the UK’s withdrawal from the EU. For some instruments, it will not be known if they are required, as they make provision for alternative outcomes of negotiations. Alternatively, for some instruments, it may not be known when they will be required. The power in clause 52 will ensure that subordinate legislation can be made and laid before Parliament even when it reflects policy that is subject to change due to ongoing negotiations. That will permit the Government to carry out the necessary contingency planning. Instruments can be considered by the House some months prior to exit day. When the final shape of the policy or the date of commencement becomes clear, a day can be appointed for the right subordinate legislation to come into effect, and the subordinate legislation that reflects alternative options can be either revoked or not commenced.

As the subordinate legislation requiring negative procedure will already have received parliamentary scrutiny when it is made and laid, this power to appoint a day of commencement will make demands on parliamentary time close to exit day easier to manage. Once the subordinate legislation has been made and laid, and scrutinised, it will just remain to appoint a day to commence the right subordinate legislation at the right time, once those outcomes are known.

As is conventional for such instruments, the appointment of the day of commencement is not subject to parliamentary scrutiny, since the scrutiny of the instrument has already occurred. For an affirmative instrument, the Government will need to pass a resolution approving it within 60 days of any its provisions coming into force. Because it is expected that instruments are likely to come into force around exit day, when the House will be very busy, the Government consider it appropriate to extend the period for approval to be granted to 60 days.

HMRC and the Treasury have a large number of powers under which they can make subordinate legislation relating to VAT, customs or excise. Some of those powers confer the power to make supplementary, incidental or consequential provision, and transitional or transitory provision or savings; others do not. In the context of the UK’s withdrawal from the EU, such powers are important as they provide the ability to ensure a smooth and orderly exit. For example, they may be used to make provision for transactions or movements of goods that begin pre-exit and end post-exit. The clause introduces the procedures for commencing subordinate legislation concerning VAT, excise or customs, which may be used if the person making the legislation considers it appropriate in consequence of, or otherwise in connection with, EU withdrawal.

Rather than the subordinate legislation itself containing a commencement date, as is usual, the day on which it comes into effect can be appointed by another regulation. Some subordinate legislation will be subject to the 28-days made affirmative procedure. That is, it will cease to have effect unless approved by the House within 28 days of being made. If, under this clause, such subordinate legislation comes into effect on a day appointed by another regulation, that period is extended from 28 to 60 days from the date of any of its provisions coming into force. This extended period is to take account of the pressure on parliamentary time that is expected around the day of exit, which is when the subordinate legislation is expected to take effect. The clause also amplifies existing powers, so that the Government can ensure a smooth and orderly transition from the current regime for customs, VAT and excise to the regime post-exit.

Amendment 88 seeks to limit the period during which regulations may be made under clause 52 to two years after the UK leaves the European Union. As I have set out, the clause grants the powers necessary to ensure that the Government can plan for alternative scenarios by allowing for the commencement by regulation of subordinate legislation for VAT customs or excise, as and when necessary. The power will enable a smooth and orderly withdrawal from the EU for the purposes of VAT, customs and excise by extending existing powers to include the making of supplementary, incidental or consequential provision and transitional or transitory provision or savings. The clause will enable the UK to engage in appropriate contingency planning by allowing subordinate legislation to be made and laid well in advance of exit.

Clause 53 defines excise duty for the purposes of part 5 of the Bill. As in part 4, it is defined as

“any excise duty under…the Alcoholic Liquor Duties Act 1979…the Hydrocarbon Oil Duties Act 1979, or…the Tobacco Products Duty Act 1979.”

The definition excludes some domestic excise duties, such as air passenger duty and betting and gaming duties. The clause tailors the scope of the powers set out in part 5 to what is necessary and ensures that they can be exercised only in relation to those excise duties that are most regulated by EU law and most affected by the UK’s withdrawal from the European Union.

The hon. Member for Aberdeen North asked about shipwork end-use duty relief. Clause 19, which we have already debated, deals with reliefs. I believe that secondary legislation under that clause could deal with the issues she raised, but I will certainly look into the matter and come back to her.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader 3:45 pm, 1st February 2018

I am feeling slightly sorry for you, Mrs Main—having to chair a Committee that erupts into riotous laughter, which is most unusual for a customs Bill Committee. I appreciated the Minister’s speech, but I think he is losing his oomph somewhat—[Hon. Members: “Oh!”]—although I am sure he will find it again.

We are reaching the end of our discussions. I am sure all members of the Committee are quite glad about that, because I am not sure how much more we can discuss sunset clauses. However, I have a few more points to raise about our amendments. Amendment 120 would replace the second “appropriate” in clause 51(1) with the word “necessary”, because otherwise Ministers will be given an incredible level of power to use their own discretion to decide what is appropriate. We have raised concerns before about the level of power that such clauses give Ministers. Changing “appropriate” to “necessary” would allay some of those concerns: it would be a stronger test and would require a stronger case from Ministers. I think that is a reasonable request.

Before I move on to Executive privilege more generally, may I address something the Minister said? When he raised his concerns about having a sunset clause that specified a date of 29 March 2021, he said that the agreement might be made very close to that date. That is incredibly worrying, given that we do not yet have any agreement or any idea what things will look like on exit day. The Government and the EU look likely to push the matter as close to the wire as possible, because it seems that there is an awful lot of distance to travel—particularly since the Government do not actually know what they want. If businesses face the same situation approaching 29 March 2021, after a two-year transition process—if the Minister wants to call it an implementation process, that is absolutely fine—and two years after having gone through a crazy period when they had no idea what was coming round the corner, that will be a major problem for them. It will be a major problem for productivity, as has been mentioned throughout. It is incredibly worrying that, at the end of a two-year transition period, we might still not be clear about exactly how things will look a very short period afterwards.

On what the hon. Member for Stalybridge and Hyde said about the duty to check the powers of the Executive and not to alter the balance, I argue that we actually do need to alter the balance. I find this job incredibly frustrating in a number of ways because of the extreme power of the Executive. In a lot of cases, they do not have to use their parliamentary majority—they do not currently have one—because they have Executive privilege to do a number of things that I do not believe they should have the power to do. In many cases, only Ministers are able to table amendments, programme motions and so on, because the Executive have that power. They also have the power to set the agenda. That means that, for parliamentarians outwith the Government—whether they are on the Government Back Benches or in opposition—things are more difficult.

The current system of Executive privilege is completely unbalanced. It should be shifted towards the Government having to use their parliamentary majority to do things. That would make this a better place. I am shocked that more parliamentarians are not as enraged as I am by that, and that it is not brought up in the House more often. It is not a good way to run a Parliament, and it should be changed.

That is important in relation to the Bill because the absence of sunset clauses gives Ministers powers in perpetuity that I do not believe they should have in perpetuity. In some cases, I do not think they should have them at all; they should have to be adequately scrutinised by Parliament and have to get measures through votes. The absence of sunset clauses gives Ministers powers for ever more, and I do not believe that should happen. It may be that, 10 years down the line, a Minister decides that something relates to the UK leaving the EU and therefore makes what he thinks is an appropriate change. I do not believe that should continue to be possible.

That is particularly important in respect of clause 51. I can see some of the arguments the Government may make about other clauses—they may say the changes they permit are just tinkering with technical regulations in relation to VAT, customs or excise duties—but in this clause Ministers give themselves power to make more fundamental changes. That completely fails the people who voted for Brexit to take back control. The Government say they intend to support that view and to assist people with taking back control, but what they are doing here absolutely will not achieve that aim; it will concentrate power for ever more in the hands of the Executive. The Government need to think carefully about that.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

I thank the hon. Lady for her contribution. I will not rehearse the entertaining conversation we had about “appropriate” and “necessary”, but I understand her points. However, I maintain that there is a logical, lexical complication with—[Interruption.] Yes, I am getting drawn back into the debate again. I do not want to go there.

The second, pertinent point the hon. Lady raised was that the Bill, by not having the sunset clauses that she seeks, conjures up the possibility of us catering for a very late deal. Although it does indeed allow for that eventuality, that is not the same as us suggesting that we expect it to happen. We are balancing the likelihood of a very late deal, which I suggest is extremely low, with the consequences of that happening, which would be significant. In a sense, it is almost analogous to why we insure our house. We do not expect it to go up in flames during our lifetime, but given the consequences of that happening, it is prudent to insure. On that basis, we are applying the same kind of principle in this particular situation.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader 4:00 pm, 1st February 2018

I reserve the right to bring the amendment back on Report because it is incredibly important, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51 ordered to stand part of the Bill.

Clauses 52 and 53 ordered to stand part of the Bill.

Clause 54