Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
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“398.] So what was it that led to this Damascene conversion? What happened between 13 January and now to make the Minister do a U-turn and support amendments that he and his party voted down repeatedly in the Commons? There are many reasons to oppose legislative propositions in this House, but “not invented here” has to be one of the weakest. We have argued throughout the passage of the Bill that financial services, including the work of the regulators, are a vital part of the drive towards net zero. There was no good reason for the Government to oppose the idea during the earlier debates on the Bill. Every sector of the economy will have to adapt to the change and it will be for Government Members to explain to their constituents why they voted the amendments down.”
“I thank their lordships for their work in considering the Bill. In particular, I thank Lord Tunnicliffe and Lord Eatwell, who led for the Opposition in the relevant debates. Let me start tonight with some of the areas where we agree with what the House of Lords has done with the Bill. Lords amendments 16 to 19 make the UK’s net zero targets part of the remit of the financial services regulators. We moved similar amendments in this House, both in Committee and on Report, and both times the Minister led MPs on the Government Benches to vote them down. Indeed, when the House last discussed the Bill, on 13 January, the Minister said “I do not believe that regulators should be required to have regard to broader questions that are not so closely related to prudential standards.” —[ Official Report , 13 January 2021; Vol. 687, c.”
“Where are we with the draft Register of Overseas Entities Bill? There was nothing about it in the most recent Queen’s Speech. Will there be anything about it in the next Queen’s Speech? A foreign property register was supposed to be established this year. Will the Government meet that deadline? Finally, where are the Government on implementing the findings of the Intelligence and Security Committee’s Russia report, which used the phrase “the London laundromat” in the first place? Effective action against money laundering, terrorism and fraud is about a lot more than maintaining a list of countries; it requires action on all fronts if we are to fight these problems effectively. That is what we need to see.”
“We understand that these matters lie at the heart of national security and financial security, and we want systems as robust as possible in place to guard against money laundering and terrorist financing. Our defences against money laundering are not just a matter of law and regulation, vital though those things are; they are also a matter of enforcement, so I have a couple of questions for the Minister. Why does he think that in the recent FinCEN reports the UK was considered to be a higher-risk jurisdiction? Why does he think that so many shell companies are based in the UK? What are the authorities doing about that? Both the Royal United Services Institute and Spotlight on Corruption have identified Companies House reform as an urgent issue in the tackling of corruption and money laundering. What are the Government doing to drive this?”
“We cannot build a future as a laundromat for dirty money, we cannot turn the other way when wrongdoing takes place and we cannot take part in the denigration of institutions. Of course, we also need the highest possible standards in our own public life if we are going to talk to other countries about corruption. That means allegations being properly investigated; it means a duty of propriety with public money; it means procurement based on open criteria, not on inside connections; and it means that those at the very top of our Government should tell the truth. We support this instrument, which updates the list of third countries where extra due diligence is required in relation to money laundering and terrorist financing.”
“As we pass the midnight hour, we turn to the subject of money laundering. I am grateful to the Minister for his remarks and note that, alongside this statutory instrument, we had the statement earlier—I was going to say today, but it is now yesterday—by the Foreign Secretary, announcing sanctions against a number of named individuals. In that statement, the Foreign Secretary said that “Our status as a global financial centre” had made us both an attraction for investment and also a “a honey pot—a lightning rod—for corrupt actors who seek to launder their…money through British banks or…businesses.” It is precisely because we are a global financial centre that there is a special responsibility on the United Kingdom to ensure that each part of that sector always operates to the highest standards.”
“That is why we have included them in the new clause. The inquiries on the broader issue will do their work. We may well hear more of this elsewhere, but, for the moment, as regards new clause 30, I look forward to the Minister’s response at the end of the debate.”
“After all, that has been very much in the news recently, and it ought to be a field with which Ministers are by now familiar. Perhaps the Minister felt special when he got the call about supply chain finance, because it is not every day that someone gets a call from the former Prime Minister, but now we find that he was not the only one. In fact, there were three Ministers in the Department, one in the Department of Health and Social Care and the industry adviser in No. 10, all of whom got the call about supply chain finance. You could be forgiven for thinking that there are few people living west of the Caucasus who have not heard from the former Prime Minister about supply chain finance. After all that, it seems only right to consider the impact of this provision and on these companies.”
“That is why it makes sense to have a review of the implications, which is exactly what our new clause 30 calls for. Clauses 128 and 129 deal with the tax implications of this change and replace legislative references to LIBOR with the term “incremental borrowing rate”. They also provide the Government with powers to make tax changes as a result of the discontinuation of LIBOR. The Government estimate that the impact of all this on Exchequer revenues will be marginal. That could be right, but the sheer volume of contracts involved here suggests that the need for a review of the implications for tax revenue is real, and that is what our new clause 30 calls for. We believe that such a review should take specific account of the impact on businesses using supply chain finance.”
“If a deal was agreed based on one interest rate, how will it be affected by the move to another rate? That is not an abstract or unreal problem; it could affect mortgage rates, leases of buildings—all sorts of contracts. Indeed, the issue was highlighted only this morning in the Financial Times , in a story headlined “US lawmakers warned of litigation chaos over Libor”. The Government have attempted to deal with this legacy contract issue through the Financial Services Bill, which is currently ending its proceedings in the other place. How successful that legislative effort will be remains to be seen. The very least we can say is that the reality of moving away from LIBOR has proved to be more complex than the decision in principle to do so. We may not have heard the end of this matter of transitioning away from LIBOR.”
“Potentially, only a tiny movement in rates was needed to generate a very big profit. However, making a decision to move away from LIBOR to alternative benchmarks based on actual transactions rather than the opinion of traders was, in a sense, the easy part. So far it has taken years; no wonder they are calling it the long goodbye. The difficulty is that LIBOR has been so widely used as a benchmark for contracts around the world. Indeed, the Bank of England estimates that LIBOR has served to underpin contracts worth some £300 trillion across the world and £30 trillion here in the UK. Even in these covid days, those are serious sums. Moving away from LIBOR without dealing with that contract issue leads to the potential for contractual law disputes.”
“Indeed, I believe that the Minister and I were colleagues on the Treasury Committee when all that was uncovered. The uncovering of those practices exposed much that was bad about what was happening in parts of financial trading at the time, with activity being pursued in the interests of traders rather than customers, rates being rigged for the benefit of those traders and their institutions, and bank chief executives professing ignorance about what was going on inside their own companies. The ability to game the rate was exposed; the use of opinions on cost from submitters to the rate-setting process, rather than its always being based on actual trades, produced the possibility that tiny movements in LIBOR could benefit individual institutions or traders, often by very significant sums given the volumes of trades involved.”
“New clause 30, in the name of the Leader of the Opposition, relates to the transition from LIBOR to other reference rates, and specifically to reviewing the effects on taxation of replacing LIBOR. The new clause would require such a review to take into account the implications for tax revenues of the transition, and the effects on businesses, including those offering supply chain finance. The new clause relates to clauses 128 and 129, which replace references to LIBOR in legislation with references to an “incremental borrowing rate”. The history of this, of course, relates to the long effort to move away from the use of LIBOR in financial markets. The need to do so arose out of the uncovering of attempts to rig LIBOR in the interests of various individuals in the financial services industry some years ago.”
“It is impossible not to reflect that, while the Government promised us free trade with the rest of the world, we need a clause and a schedule like these precisely because they have not even been able to guarantee free trade within the UK. We hope that this clause and schedule will make it easier to move steel goods between Great Britain and Northern Ireland, but the Minister will be aware that one of the broader uncertainties surrounding UK-made steel is how to avoid its being subject to 25% EU tariffs if quotas are breached in the near future. I wonder whether he will update the House on how discussions on that matter are going and how the Government intend to avoid that. This is particularly important given the wider issues facing the steel industry at the moment.”
“Again, it is important to show some understanding of the difficulties that businesses have faced in the past year, and it is far better to have a measure that approves a realistic repayment schedule than bring support to an abrupt end and cause repayments at a defined deadline, which could have very damaging consequences for some of the businesses concerned. Clause 97 and schedule 19 relate to steel moving between Great Britain and Northern Ireland. We of course support anything that will make life easier for the steel industry right now. It is the foundation for much of our manufacturing industry, and there is a great deal of uncertainty hanging over various steel plants in the UK right now.”
“The vaccine programme of course gives us great hope and a platform for the cautious reopening of the economy, but only two in five hospitality businesses have outside space. Most of them are still not able to operate even under the conditions allowed at the time of this debate, so it is still a very tough time for the hospitality industry. After the experience of the past year, with the upsurges in cases in some countries, the emergence of new variants and vaccine resistance levels remaining uncertain, no one would yet say that we were out of the woods or that there was not still a need to support key sectors of the economy for some time yet. That is why it is right to continue the measures in clauses 92 and 93. Clause 95 relates to payment schedules for VAT.”
“I rise to speak to new clause 30 in the name of the Leader of the Opposition and to make a few remarks on the other provisions in this group. Clauses 92 and 93 relate to the temporary VAT cuts for the tourism and hospitality sectors. These are of course among the hardest-hit sectors of our economy over the past year, and it is absolutely right that this relief is extended. Only today we learned that, of the 800,000 jobs lost in the economy over the past year, 80% are those of people under 35 years old, many of whom previously worked in the tourism and hospitality sectors. Today’s unemployment figures show that it is young people more than any others who have borne the brunt of the job loss impact over the past year.”
“It puts tax increases in place for the next few years that hit family finances before corporations, and it does so with no plan for the recovery that the country needs or one to rebuild the public realm—the public square—to make it more resilient in the future. That is why we have tabled the reasoned amendment on the Order Paper. The second half of that job—what the country has to do—is still to come, and that will be where the argument over the best economic future for the country and how we truly recover from the events of the past year is played out.”
“Expectations have been changed about what Governments can do, not only here but in the United States, as we have seen in recent weeks, and across the world. This will change the shape of the political argument in the future—not a return to the same old argument about tax and spend, but an argument instead about who can best equip the country for the future, who can rebuild the best and who can deliver the transition to greener jobs, heal the inequalities that have been exposed by the pandemic and help children to recover from the education that has been lost. The Finance Bill is silent on those challenges, as was the Budget. That is why it is a job only half done.”
“It has laid bare the vulnerabilities of our society and the very different circumstances of those who could work from home and those who had no choice but to go to work day after day, no matter the risk to themselves and their families. In terms of other changes, the pandemic has been described as the “great acceleration”—10 years’ change crammed into one. The way we shop, work, pay for things, educate children, deliver healthcare and much else has been changed, probably forever. Technology and change apply to everyday life as never before. How do we make the most of these trends? How do we ensure that people are equipped for the economy that comes out of this pandemic and that these changes do not simply exacerbate existing inequalities? Those are the urgent questions facing politics today.”
“By that, I mean of course the extension of the furlough scheme, the help for the self-employed and so on. Those interventions cost considerable sums of money, but the social and economic cost of not doing them would have been far, far greater. Governments can act in times of crisis to help the country through. Indeed, if a Government did not do so, we would have to wonder what they were for. But in addition to that immediate crisis help, there is a longer-term rebuilding job to be done. We are going to need strong, job-creating growth if we are to recover from the past year. The economy will not come back exactly as it was before the first lockdown. The pandemic has exposed deep inequalities in society. It has shown the stark reality of what many key workers are paid.”
“The Treasury cannot escape ownership of this one. What will the Treasury system be to accredit lenders under the new recovery loan scheme? Will it just be for regulated lenders? How will it test the capital adequacy of the institutions involved? How will it avoid a repeat of accrediting for the scheme a lender who is on the brink of collapse? Of course, the overall judgment on the Budget and the Finance Bill must be by the test of how it gets us through what is happening now and the foundations it lays for the future, and the Bill deals with only one phase of that. On the extension of many of the emergency measures put in place since the beginning of the pandemic, we called for many of those measures in the first place, and they are obviously necessary while we are still in the teeth of the fight against the virus.”
“I thought it might be helpful to illustrate the effect of some of the proposals on a particular constituency, so I picked one at random: Hartlepool. The proposals mean that 34,000 basic rate taxpayers in Hartlepool will face a tax increase before corporations have had to pay a single extra penny toward the costs of the pandemic. In Hartlepool, there are 11,732 households on universal credit. The decision to withdraw the £20 a week uplift from them later this year will cost them collectively almost £12 million extra over the following 12 months. That is what these changes mean in one constituency. That is what they mean to families around the country. The Bill also sets out plans for the new system of investment allowances, which are related to the recovery loan scheme recently launched—I underline this—by the Treasury.”
“Indeed, the argument advanced at the core of this Finance Bill—that corporation tax rates should rise and businesses should be compensated by an increase in investment allowances—is the exact mirror image of the argument used by the previous Chancellor to justify the cuts he made to corporation tax. At that time, we were told that all those reliefs and allowances were too complex and that they could be cut to help fund a cut in corporate tax rates; now, the opposite argument is being advanced. Osbornomics are officially buried by Rishnomics in this Finance Bill. That is all, of course, at the level of policy and ideology. What about the practical level—the practical effect? The freezing of personal allowances will bring an extra 1.3 million taxpayers into the system over the next few years.”
“It turns out that the case for the defence is that it is all somebody else’s responsibility. But that will not wash—it will not wash at all. At the heart of the Finance Bill are the tax changes set out in the Budget. As we established during the Budget debates a few weeks ago, those tax changes turn on its head decades-long conservative orthodoxy, not just because tax rates are going up but because the expectation is that alongside rising tax rates will come rising revenues. The projections are set out in the Red Book on corporation tax, thresholds for income tax and the other measures laid out in the Bill. The Red Book estimates and the Bill lay to rest the argument set out by Conservative politicians from Margaret Thatcher to George Osborne that cutting rates rather than raising them leads to an overall rise in revenues.”
“They can tell him that they were in the Chamber and they had their mobiles switched off as he worked his way through the whole Department. If I am right, the Minister responding is one of the few people in the Treasury who has not yet received a call from the former Prime Minister, but he might still be working his way through the list. Right now in the Treasury there are no doubt officials cowering behind doors, hoping that the former Prime Minister does not have their phone number. If he does get through, they can give him the new excuse we heard today: that the new Government loan schemes on which he has been lobbying have nothing to do with the Treasury. Ignore all the press releases, ignore all the tweets, ignore the Instagram videos, ignore the invitations to “Ask Rishi”.”
“Who was it that downgraded Sure Start, and attacked the opportunities and life chances of some of the lowest-income children in the country? I really think that we should be told who it was who presided over the neglect that has spurred the Government to these policies today. I admit that it is a neat trick to pretend that you have only been in power for a year, but the truth is that it has been 11 years. What the Government are now trying to do is fix their own mistakes to repair damage that they caused in the first place. Now, I admit it must be a relief to the Treasury Ministers to attend the debate today and to be able to shelter on the Front Bench for a few hours, to get some respite from calls from David Cameron.”
“We have heard excellent contributions on a wide range of issues, including the move away from diesel, climate change, local recovery bonds, the taxation of covid tests, those excluded from Government help schemes, the arts and cultural sector, the aviation sector, the Help to Grow scheme, freeports and regional inequality—or, as the Government call it, levelling up. On the latter, we heard of the urgent need for action because of years of neglect. Now, I hate to pose an awkward question, but I have been scratching my head and I have to ask: who has actually been in power for the past 11 years? Who presided over that neglect? Who was it who cut billions of pounds from local authority budgets over the past decade? Who was it that abolished the regional development agencies that were responsible for regional development in the first place?”
“I would like to begin by echoing the tributes made from all sides of the House in recent days to the Duke of Edinburgh, Prince Philip. It is a testament to the endurance of his public life that you would have to be almost 80 years old to have any real memory of a time when both he and Her Majesty the Queen were not at the pinnacle of the monarchy. On behalf of my constituents, I would like to send Her Majesty and the royal family our deepest condolences at this most difficult time. Turning to the debate, it is a pleasure for me to respond on behalf of the Opposition. I thank all Members on all sides of the House, who made very wide-ranging contributions today, and some of them, Madam Deputy Speaker, related to the Bill before us.”
“The Office for Budget Responsibility estimates that £27 billion-worth of loans made under coronavirus loan schemes will never be repaid. Why is the Chancellor insisting that banks pursue that as conventional business debt, when the circumstances that gave rise to those loans are anything but conventional? Would lifting the debt burden on businesses and turning it into a contingent tax liability not help to fire up the economy, set business free and really get Britain moving again?”
“Members present, is a defence of the right of peaceful protest and a desire to see a peaceful resolution to the conflict, so I ask the Minister to convey the concerns of the UK Parliament, to stand up for the right of peaceful protest, to defend press freedom, to explain why there are such concerns in the UK, and to urge a peaceful resolution to this long-running and very serious dispute.”
“I would always say that protest must be peaceful, but I note the dignity of the protesters, with the provision of langar—free food—not only for each other among protesters, but often for those policing them, too. There is also a rejection of the idea that those engaged in the protests are somehow not loyal to India, or that the response to people fighting for their livelihoods should be to suggest that they are somehow externally controlled, or to place a question mark over their motivations, saying that they are against the state in a broader sense. What unites those signing the petition, and the hon.”
“The roots of the issue are the three farm laws that were passed last year, which those protesting fear will expose them to huge multinational forces and remove the minimum price guarantees they currently enjoy. Of course India, as a sovereign nation, has a right to debate and legislate for its own laws on that, but—and this is also the case if we look at ourselves—how many countries operate a fully free-market system when it comes to agriculture? Systems of subsidy are very common. There is a great deal of anguish at the sight of protesters being ill-treated, the internet and social media accounts being cut off, and the arrest of activists.”
“I represent thousands of constituents with family roots in India. Many are Sikhs with family roots in Punjab. I have received a great deal of correspondence on this issue in recent months, and many of my Wolverhampton South East constituents have signed the petition on press freedom and the defence of the right to public protest. There is a great sense of solidarity with those who are protesting, and a sense that they are fighting for their livelihoods and the right to earn a living. Punjab has long been known as the breadbasket of India. The Punjabi community in the UK have deep family ties with many of the people who are protesting.”
“It has imposed on us all a responsibility to build a better economy out of this: one that combines prosperity and security; and one that combines the wealth creation we need with a commitment to heal the divisions exposed by what we have been through. Under new leadership, that is exactly the approach that my party will support.”
“I appreciate that some Government Members may not regret that—in fact, some of them may welcome it—but the hard-working businesses of this country deserve more than to be used as components in the Government’s ongoing grievance factory against the European Union. They deserve more than to be used as pawns in a battle of ill feeling that will not create a single job or export a single product. We know that the Prime Minister has dismissed business, but that attitude is no good to hard-working exporters and manufacturing companies. They deserve support for their efforts. Covid has exposed deep inequalities in our country, from the pattern of those killed by it to the frontline workers who have kept the country going.”
“Last week, the all-party parliamentary group on the Black Country economy heard alarming reports from manufacturing companies about the forest of red tape, cost increases and delays that they have faced in trying to export goods since the beginning of January. Those businesses represent the finest Black Country tradition of making things and selling them all over the world. There is an old saying in the Black Country: “If you can draw it, we can make it.” But those businesses now find themselves hobbled and hamstrung by the mountain of red tape involved in the Government’s Brexit arrangements.”
“The more that we can mitigate this damage to growth, the better it will be for prosperity, family finances and the public finances. That is the heart of the country’s challenge—how to get economic growth going. After the long, hard year that business has had, we need to let companies grow, breathe and get back on their feet, not weigh them down with ever growing debts, so why have the Government set their face so firmly against the proposals that came from business groups themselves to turn the covid debt burden into a contingent tax liability in the future, dependent on future performance?”
“With a Budget set to bring the overall tax take back to levels not seen since the 1960s, the Conservatives have surrendered the mantle of claiming to be the party of low taxation. The old Conservative slogan was that it was the party of low taxation. The new slogan could be, “Tax on families up, tax on businesses up, but nurses’ pay down.” Let the Chancellor put his signature on that. This is the platform to which he has now signed up the whole Conservative party. This is the change that the Budget represents. When we look at what the Budget predicts further ahead, we see that UK economic growth after this year and next is projected to be just 1.6% or 1.7%. The Budget papers predict a long-term hit to growth of 3% from covid, on top of the 4% hit to growth as a result of the Prime Minister’s agreement with the European Union.”
“He said: “the vast majority, if not all, of that increase in corporate tax receipts is probably more likely due to the cyclical recovery in corporate profits, which took a real hammering in the last crisis”. He went on to say: “There was an idea that they”— cuts in corporation tax— “could help spur business investment. And what we’ve seen over the past few years is that we haven’t seen a step change in the level of capital investment that businesses are doing as a result of those corporation tax decreases.” So there it is: Thatchernomics and Osbornenomics buried in full public view by Rishinomics—no more Laffer curves; no more pretending that tax cuts always magically lead to more revenues; no more tax bombshell posters; “Singapore-on-Sea” laid to rest by Budget 2021.”
“With the changes announced in this Budget and the increase in rates, we do not just have a different policy; we have a different philosophy. It is all there in the Red Book, set out in table 2.1 on page 42, under the heading “Strengthening the public finances”. By raising corporation tax rates, the Government hope to bring in an extra £17.2 billion in a few years’ time. That is the claim; that is the estimate of the increased revenue that the increased rate will bring. If there was any lingering doubt about the sea change that this represents in the thinking of the Conservative party, it was swept away by the Chancellor the day after the Budget. He used his post-Budget interview on the “Today” programme to bury the argument of his predecessors.”
“In 2016, the then Chancellor, George Osborne, said: “Not only have our corporation tax cuts given us the lowest corporation tax rate of all the advanced economies of the world, but we have seen a 20% increase in receipts from corporation tax”. —[ Official Report , 4 July 2016; Vol. 612, c. 625.] This was not just a single policy and not just a political argument; it was an article of faith. It was the core of the taxation ideology of the Conservative party. It goes way beyond the Osborne-Cameron years and right back to Thatcherism itself. This is a stance that has lasted not years, but decades. Its believers include the current Prime Minister himself who, when campaigning to be leader of his party, said that “every time corporation tax has been cut in this country it has produced more revenue”.”
“The backdrop is of course one of the most difficult we have known. There is a pandemic that has killed over 120,000 people and given us a huge hit to our economy. I want to focus on the taxation aspects of the Budget, because on this particular issue this was no ordinary Budget. The Budget announced by the Chancellor last week marked a watershed in taxation policy on the part of the Conservative party. For years, we have heard the mantra that lower taxation rates would lead to increased revenue by stimulating more economic activity. Indeed, that was the previous Chancellor’s justification for cutting corporation tax in the first place back in 2010. He partly funded it by cutting investment allowances for manufacturing businesses, and he continued to stick to that justification for years afterwards.”
“It is a pleasure to wrap up this debate for the Opposition. Whatever is happening elsewhere on our television screens, I want to begin by thanking all the hon. and right hon. Members who contributed to this debate, whether they did so physically or virtually. We have had a very wide range of contributions over the past few hours, and hon. Members have raised a whole number of issues in relation to the Budget. These included the Government’s business support schemes, the importance of technology, the creative industries, tourism, International Women’s Day and the differential impact of the pandemic on women, green finance, the universal credit uplift and its impending cut-off, unemployment and youth unemployment, the 1% NHS pay offer, the levelling up funding and those still excluded from Government support.”
“For example, the third instrument states that it will come into force on 22 January, but today is 22 February. What has been the legal basis for the operation of the rules between the publication of the instruments and their being debated here and now, some six or seven weeks after the end of the transition period?”
“Turning to the third instrument, the Customs Tariff (Establishment and Suspension of Import Duty) (EU Exit) (Amendment) Regulations 2021, if I have understood it correctly, it appears largely to be about amending the first instrument, the Customs Tariff (Establishment) (EU Exit) Regulations 2020. Will the Minister tell us how that came about and why it was not possible to include in the first instrument any necessary corrections that had been identified before it came before us, particularly as we are debating the original and the correction on the same day? It seems a bit odd that we have ended up debating one statutory instrument with another one revising it on the same day. Will he tell us how that came about? Finally, on timing, the instruments are intended to provide continuity following the end of the transition period.”
“As the Minister said, the second and third statutory instruments include a number of technical provisions, alongside changes that seek to replicate arrangements that existed when the UK was a member of the EU under which import duty can be suspended or relieved in certain circumstances. That is often when raw materials or semi-manufactured goods are imported and then processed for re-export or placed on the home market, and when goods such as items for exhibition are imported temporarily. We recognise that, as the notes set out, those changes are technical and the impact expected to be little.”
“I would be grateful were the Minister to update us on the situation with some of the non-tariff barriers we have seen in the news recently. One thinks of sectors such as shellfish and small distilleries, of trade between Great Britain and Northern Ireland, and of much more, not to mention the export of share trading from London to Amsterdam or the difficulties faced by the UK’s world-leading musicians in touring. Those things are not about tariffs, but they are about trade barriers. Taken together, they are having a major disruptive effect on the sectors I have mentioned. I do not want the Minister to be too coy. I would be grateful if he were to update us on the Government’s discussions with such sectors and on what the plan is to overcome the difficulties that we have heard about in recent weeks.”
“The Minister might have been slightly coy, but I believe that most of those were trade agreements to which we were previously already a party as an EU member; they were not newly negotiated agreements. He may correct me if I am wrong on that. The casual listener—I am sure that many are listening to our proceedings—might have thought that there were 64 new trade agreements. Perhaps there will be one day, but I think most were continuity, rolled-over agreements. The statutory instruments deal with the tariff schedule changes. What we have learnt, in particular in the past six or seven weeks, is that while tariffs are a major part of international trading rules, the fluidity of modern trade does not rest on tariffs alone; it also rests on the ease and speed with which goods and services can cross borders.”
“I do not expect him to go through everything, because it will deal with a great many different product lines, but if he could give us a couple of examples of perhaps the most dramatic changes, and one or two where there is no change at all, that would help to illustrate what we are talking about, because they will have a varied effect on business. From what the Minister said, I think the policy aim is to get rid of tariffs where there are no realistic UK production or competition implications, but he may correct me if I am wrong in that impression. Will the Minister also say something about the impact on consumers? I noted his hymn of praise for all the trade agreements that the UK has been able to agree in the past year or two—I think 60-odd were mentioned.”