The Government wishes to inform the House about plans to implement a temporary tariff regime in the event that the UK leaves the EU without a deal on 29 March 2019. The Government will bring forward the necessary secondary legislation in light of the votes in Parliament this week.
The temporary tariff would apply equally to all countries where the UK does not have a trade agreement or other preferential agreement in place. In the event of a no deal, this would include the EU.
The temporary tariff will apply for up to 12 months. At the end of the temporary period, the Government will introduce a long-term tariff regime. This will be developed over the course of the coming months following a full public consultation process.
The Government faced a choice:
The Government does not believe either of these options on its own is the right approach. Instead, the temporary tariff would take a balanced approach to support the UK economy as a whole. It would maintain open trade on the majority of UK imports, to support consumers and business supply chains, but retain necessary tariff protection for particular sectors of the UK economy.
Under the temporary tariff, 87% of total imports to the UK by value would be eligible for tariff free access.
The Government recognises the importance of retaining necessary tariff protection for some sectors of the UK economy. Therefore, tariffs would apply on 13% of total UK imports:
Information on specific tariff rates that would apply under the temporary tariff have been made available through the Government website.
In developing the temporary tariff, the Government has given regard to the five principles set out in the Taxation (Cross-border Trade) Act 2018:
Throughout the temporary period, the Government would also consider exceptional changes where clear evidence is provided by stakeholders against the criteria set out in the Taxation (Cross-border Trade) Act 2018 and would provide a mechanism to hear business and consumer feedback.
This statement should be read in conjunction with the written Ministerial statement laid in parallel on the Northern Ireland border.