Sir Mel Stride
MP for Central Devon · Conservative · United Kingdom
“May I welcome the Chancellor to his position and thank him for his kind remarks earlier? May I also wish him every success, because I am afraid that under this Government we need some? He will know that if we are to fix the economy, we have to fix the welfare bill.”
“Given all that is going on, this could be the last time. The legacy of this Chancellor has been the highest taxes on record, a benefits bill spiralling out of control, and unemployment 300,000 higher than it was at the last general election. The right hon.”
“The right hon. Lady cannot bring herself to answer the simple question I asked. I will tell her: she is borrowing one quarter of a trillion pounds more than the plans that she inherited—that is her legacy. We hear that the right hon. Member for Makerfield (Andy Burnham) is considering borrowing even more.”
“May I begin by agreeing with you, Mr Speaker, and saying how disrespectful it is that this U-turn on fuel duty has already been released to the media earlier this week?”
“Today’s announcements will bring little comfort to the hundreds of thousands of people who have lost their jobs, the countless businesses that have folded and the high streets that are now hollowed out.”
“The Conservative party has been campaigning for a fuel duty freeze for months. The Chancellor repeatedly rejected those calls, creating unnecessary uncertainty for motorists and businesses. Why did it take her so long to realise that putting up fuel duty during an energy crisis is a bad idea?”
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“However, it is not always the intention to make goods freely available when they are imported into the United Kingdom. Goods are often brought to the UK for different reasons, such as to put them into customs warehouses for the time being, or to transport them through the UK on the way to another destination outside the country. In situations such as those, a business may declare the goods for a special customs procedure. Special procedures either defer when a liability to import duty is incurred, or reduce the rate of import duty applicable to goods, provided of course the relevant conditions have been satisfied. Without those procedures, a business would have no option but to declare imported goods for the free circulation procedure and incur any import duty up front.”
“Clause 3 does two important things: first, it establishes an obligation to declare goods that are imported into the United Kingdom; and, secondly, it introduces the concept of declaring goods for a specific customs procedure. Those are the basic building blocks of the UK’s new import duty regime. The need to declare goods for a customs procedure is fundamental to any import duty regime. The procedure for which goods are declared determines when liability to import duty arises. The clause goes on to introduce another fundamental part of a customs regime—the customs procedures for which chargeable goods may be declared. The purpose of importing goods may be to make them available for use in the UK, in which case they can be declared for a procedure known as free circulation, at which point they incur a charge to import duty.”
“To address her particular issue, the head of HMRC has made it clear that his feeling is that we will need between 3,000 and 5,000 additional staff across HMRC to ensure that we cover off, wherever the day one deal lands. For an organisation of well in excess of 50,000 personnel, such an increment in staffing, particularly given that some will be reallocated rather than entirely new recruits, is perfectly manageable.”
“At the same time, the Bill retains the flexibility to ensure that we can put into effect the necessary and appropriate measures no matter where the deal lands—or, indeed, if there were to be no deal at all with the European Union, as we certainly do not expect. The hon. Lady raised the important issue of HMRC resourcing. As we move towards our day one scenario—whatever that may finally look like—I assure her that the Government are vigorously engaged not just with issues around HMRC’s human resource requirements, but with other infrastructure requirements, whether for hard infrastructure or information technology systems such as the Customs Declaration Service, which will be important.”
“I welcome the hon. Lady to the Committee and thank her for that initial contribution. In terms of where the final deal with the European Union lands, whether we have a form of customs union with the remaining 27 members is subject to negotiation. The Government have made it clear that we wish the end point to be the facilitation of trade between ourselves and the remaining 27 members of the customs union. The Bill provides for that end point to be as close as possible to the existing rules and regulations around the Union customs code; that is very much what the Bill seeks to achieve.”
“I welcome the hon. Lady to the Committee. She mentions the location of the new HMRC hubs as they are rolled out, and I will make two important points. First, Border Force, which is very much part of the frontline, is in the Home Office’s remit, not HMRC’s. Secondly, proximity to the hubs or otherwise is not critical in determining whether HMRC provides the support that Border Force and other agencies require. The absence of a hub close to a need does not mean that HMRC staff cannot be in proximity to that point; they do not need to be based constantly at any one hub.”
“That lends itself to having a concentration of such individuals in hubs, where skills and IT can be developed and brought in to be effective. Without repeating my answer to the hon. Gentleman’s hon. Friend, the Government and HMRC are clear that the configurations of the new hubs will lend themselves to appropriately support the new customs regime.”
“I welcome the hon. Gentleman to the Committee. He reiterates the point that the hon. Lady just made, so I will spare the Committee a repeat of every element of my answer. However, specifically with relation to the points made in the evidence session by Mr Runswick, the trade unions have been resistant to the changes to HMRC wholesale, right across the piece. Therefore, when it comes to arguments about whether HMRC can be effective in clamping down on avoidance, evasion and non-compliance, bringing in tax yield and so on, the argument has been run that we need a number of offices in multiple locations to do that. The critical answer is that the very nature of running an efficient tax system and customs regime needs technology, the right skills and the right people.”
“I can certainly assure the hon. Lady that the situation as it will pertain when we move to the new hubs—we are making some assumptions about what exactly the end point of the negotiations will be—will be sufficient to make sure we have a customs regime that works, that is low friction, and keeps trade moving and raises revenues on the duties that we may or may not apply.”
“I will take the hon. Lady’s references to “you” as not meaning the Chair of this Committee, but me. The issue that she has raised, which ran in the press a few weeks ago, relates to an issue for the Home Office and Border Force, not HMRC. It is outside the immediate scope of this Bill. I know that at least one Minister in the Home Office was able to refute those suggestions, but I will not dwell on that in this Committee.”
“I thank the hon. Member for his very helpful intervention. Of course Ministers have responsibilities for the areas that they oversee. I can assure the hon. Gentleman that I have had discussions with HMRC staff, including the head of HMRC, and we have looked specifically at the right mix of skills and people, so I am confident that we will have the right team in place to meet the challenges ahead. Question put and agreed to. Clause 3 accordingly ordered to stand part of the Bill. Schedule s 1 and 2 agreed to . Clause 4 When liability to import duty incurred Question proposed, That the clause stand part of the Bill.”
“Clause 5 Goods not presented to Customs or Customs declaration not made Question proposed, That the clause stand part of the Bill.”
“Similarly, the general rule when importing something under the temporary admission or authorised use procedures is that liability is incurred when HMRC accepts the declaration, but at a reduced rate. However, to facilitate trade and support businesses, liability can be deferred. In cases where goods are declared for a transit procedure, inward processing or a storage procedure, liability does not occur at the point when HMRC accepts the declaration, although liability may arise at a later date. The clause also makes further provisions governing these situations, including the consequences for liability purposes of the incorrect usage of the special procedures or their breach. The clause makes it clear when liability to import duty is incurred. Question put and agreed to . Clause 4 accordingly ordered to stand part of the Bill.”
“The clause determines when a liability to import duty is incurred. This is a necessary part of establishing a stand-alone customs regime as both businesses and HMRC need to know the point at which any money is due. The clause sets out a framework for determining the point at which liability to import duty is incurred. The general rule for importers wishing to release their goods for free circulation—that is, to discharge all customs obligations—is that the liability is incurred when HMRC accepts their declaration. For example, if a business were importing electronic goods from east Asia and declared the goods for free circulation, the liability for import duty would arise when HMRC accepts that declaration.”
“That is what clause 5 provides in cases where goods are not present or declared to HMRC. Question put and agreed to . Clause 5 accordingly ordered to stand part of the Bill. Clause 6 Person liable to import duty Question proposed, That the clause stand part of the Bill.”
“Clause 5 deals with cases where goods imported into the UK are either not presented or not declared to HMRC. Where that is the case, it provides for the goods to be liable for forfeiture. It is essential to have rules that cater for situations in which someone fails to meet their obligations when they import goods into the UK. The clause provides such a rule: it makes imported goods liable to forfeiture if they have not been presented or declared to HMRC. That simply mirrors the existing position in EU law that applies in such cases. The clause also makes it clear that such goods remain liable to import duty at the same time that they are liable to forfeiture. It is essential that appropriate sanctions are in place to deal with failure to meet the requirements of the import duty regime.”
“There are also circumstances where we may apply higher duties. For example, additional import duties can be applied when imports are causing injury to UK industry, as long as such additional duties are applied in line with our obligations as a member of the World Trade Organisation. Clause 7 introduces the provisions under which we will establish our own tariff regime on leaving the EU. I suggest that clauses 6 and 7 stand part of the Bill. Question put and agreed to. Clause 6 accordingly ordered to stand part of the Bill. Clause 7 ordered to stand part of the Bill. Clause 8 The customs tariff”
“The tariff is made up of import duty rates for product categories. The standard customs tariff that the UK currently applies as a member of the EU is made up of more than 17,000 tariff lines. The customs tariff established under clause 8 will contain the duty rates that apply to all imports from every country unless varied by another clause. The following clauses in the Bill enable the variation of the standard rate of import duty. For example, the UK will be able to reduce import duty when goods are imported under a preferential trade agreement, where preferential rates are granted unilaterally to developing countries. Parliament will also be able to reduce duty rates for applying a tariff suspension or relief, such as for items imported for educational, scientific or cultural purposes.”
“The clause also makes it clear that where the liability falls to two or more persons, the clause provides that they are jointly and severally liable for the import duty. It is essential to establish who is liable to pay import duty in all circumstances in which such liability arises. That includes making those who provide false information in connection with declarations liable for import duty. Clause 7 contains no powers, but introduces the clauses in the Bill that will be used to set the amount of import duty applicable. The customs tariff will apply in all cases, but may be amended or adjusted to change the standard rate of duty in certain circumstances. The clauses referred to in this clause ensure that. The customs tariff will set out the rate of duty applicable to imports of goods into the United Kingdom.”
“The basic rule is supplemented by other rules that apply in less straightforward circumstances: for instance, in cases where goods are not declared, the liability to pay duty falls on the person who is in possession or control of the goods when they arrive in the UK. The clause also caters for other situations in which the rules have not been followed. They include cases where someone has provided false information when they make a declaration, or where they have not followed obligations imposed upon them, such as those that are imposed when goods are subject to a special customs procedure. In such cases, a person who has provided false information or who has breached the obligation can be liable for import duty.”
“Clause 6 establishes who is liable to pay any import duty on goods imported into the United Kingdom. It is essential to establish who is obliged to actually pay import duty when it becomes due. The clause establishes the series of rules that do just that. The rules set out by the clause illustrate a fundamental principle of the import duty regime, namely the link between the making of a customs declaration and the liability to pay an import duty that might be due. In cases where procedures have been followed correctly and the information provided is accurate, the liability for duty falls upon the person named on the declaration, or on whose behalf the goods have been declared. That could be the importer of the goods and/or an agent appointed to act for them.”
“That schedule sets the maximum rate of import duty that a country may apply to imports. The UK can then choose what rate to apply, provided it is at or below the bound rate. Import duty rates specified under this clause must be consistent with those international obligations. Clause 8 sets out what must be contained in the customs—”
“Clause 8 requires the Treasury to establish and maintain a customs tariff. The rates of duties set under this clause will apply to goods from every country, unless varied by another clause. It enables the implementation of a range of tariff options, so that the UK can respond to changes in the global trading environment, both now and in the future. The UK currently applies duty to imports to the UK under the Union customs code. The standard duty rates of the UK, as a member of the EU, are contained in the common external tariff. When we leave the EU, this Bill will require the Treasury to establish and maintain a customs tariff that will, among other things, specify the rate of import duty applicable to goods. The UK is working with the WTO to establish the UK’s bound tariff schedule.”
“I am sorry, Ms Buck. I assumed that we were also debating that clause 8 stand part. My apologies. I will turn specifically to the amendments tabled by the hon. Member for Aberdeen North. Although she may see them as clarifying matters, the Government’s view is that they are additional and unnecessary amendments to areas where no further clarification is required.”
“Secondly, before I go too far down this tongue-twisting route—”
“I thank the hon. Lady for that intervention and I fully appreciate that she is taking up recommendations made by the Law Society of Scotland, but let me comment on the two fundamental points she has raised. First, relating to the relevance—that relevant considerations should be taken into account. The relevance of having the word “relevant” in there, prompts the question whether anybody would ever take decisions based on things that were entirely irrelevant, or at least not relevant. If one went down the road suggested by the hon. Lady, the word “relevant” would probably be inserted in multiple places throughout all the legislation that we ever pass in this House. It is understood that rational Ministers and others would take relevant decisions, rather than irrelevant decisions.”
“Lady would like to see it do, namely ensure that the number of goods is also relevant to the function of that particular clause in the legislation.”
“Will the hon. Lady indulge me for a second? Parliament—through secondary legislation and in many cases in this Bill—will have the opportunity to test whether any of these measures are being taken on the basis not only of relevant considerations, but of all sorts of other considerations that will be taken into account as to whether these measures that come forward should proceed. As to the specific point about the amendment relating to the insertion of the numbers, that clause already refers to reference or consideration being made of the quantity of the goods concerned. I think the meaning of the word “number” is, in that context, subsumed by the meaning of the word “quantity”. The Government have received the opinion that the clause already does that which the hon.”
“I am not a legal expert. I obviously appreciate that different words have different meanings in different legal contexts, but from the Government’s point of view, we are satisfied that there is not a requirement to have the word “relevant” inserted. That would be superfluous—to throw in another term—as would be the insertion of the word “number”, for reasons I have given to the hon. Member for Aberdeen North, because it would not affect the functioning or meaning of that clause.”
“I reiterate that the Government are not in the business of taking irrelevant factors into account when they make decisions. I give that assurance equally in respect of the Opposition and other parties when they are or have been in government. The hon. Lady also raises the issue of delegated legislation. At the introduction of the tariff, delegated legislation will be in the form of an affirmative statutory instrument that will be fully considered by a Committee, passed or otherwise by it and agreed to or otherwise by the House. A higher level of delegated legislative scrutiny will also apply to every occasion on which a duty is increased, as opposed to decreased. There is provision in the Bill for a higher level of scrutiny for the introduction of the tariff and for elements of its operation thereafter.”
“Subsection (5)(d) states that the Treasury must have regard to “the extent to which the goods concerned are subject to competition.” I suggest that manufacturing would be core to any decisions on the setting of duties made in that context. Subsection (6) states: “In considering the rate of import duty that ought to apply to any goods in a standard case, the Treasury must also have regard to any recommendation about the rate made to them by the Secretary of State.” As the Committee will know, the term “Secretary of State” refers to any Secretary of State in any Department, so on concerns relating to sustainable development, the relevant Department—”
“The meat of clause 8 is in subsection (5), which states: “In considering the rate of import duty that ought to apply to any goods in a standard case, the Treasury must have regard to…(a) the interests of consumers in the United Kingdom” and “(b) the desirability of maintaining and promoting the external trade of the United Kingdom”. It is hard to see how that would not have to take into account the manufacturing element and the health of the manufacturing sector. Subsection (5)(c) states that the Treasury must have regard to “the desirability of maintaining and promoting productivity in the United Kingdom,” It is very difficult to see how the manufacturing sector, which represents around 10% of the UK economy, could be entirely ignored or in any sense neglected.”
“Member for Oxford East mentioned authorised economic operators, which we will come to in clause 22, to make the general point that a number of things do not appear in the Bill, such as our habitats and various other things in existing EU legislation. On AEOs, the Bill introduces powers in clause 22 that will allow us to address exactly those elements when HMRC and the Treasury come to lay regulations as to, for example, what qualifications there might be to become registered as a certified AEO. Those kinds of issues can be picked up at that time and scrutinised further by the House.”
“We have had a wide-ranging debate on this group of amendments, much of which covers matters that we will come to later in the Bill. I will focus my remarks on the details of the amendments and the clause. The hon. Member for Scunthorpe rightly pointed out that I said earlier that the Government’s intention was to ensure that we had a minimum of change in the regime, for the obvious reason of providing familiarity and certainty to businesses. That is an important point and it is why clause 8(5) takes precedent from the Treaty on the Functioning of the European Union. It is very much grounded in where we currently are, as opposed to venturing out to pastures new, some of which would be unfortunate or inappropriate, or so the Opposition would have us believe. The hon.”
“The hon. Lady has pre-empted my next point. Although subsection (7) does say that, it does not say that the Secretary of State cannot have regard to any other matter—it does not exclude. It would be strange if a Secretary of State was told that they had to have regard to those four aspects when considering an issue and they took that to mean that they could not consider any other aspect. I draw the Committee’s attention to that aspect of the Bill. On the specific case of sustainable development, we will debate and scrutinise the provisions in the Bill that accommodate setting up our unilateral trade preferences, which are extremely important in the context of sustainable development. On those grounds, I urge the Committee to reject the amendments.”
“I will be brief because the Committee is anxious to make progress and move on to some important clauses. I will not repeat the earlier comments that I made other than the overarching comment, which is that the provisions in the Bill as drawn are very broad and will pick up on the concerns that the hon. Lady has raised.”
“Every Member of the House will have an opportunity to participate in that debate and consideration of further amendments.”
“Amendment 3 would place the same obligation on the Treasury when considering what provisions to include in regulations related to quotas, such as determining the rate of import duty applicable to goods that are subject to quotas, and amendment 4 would introduce that requirement when making regulations concerning tariff suspensions. For the same reasons that I set out in relation to amendment 2, the Government do not believe that it is necessary to include such provisions in the Bill. I have one final point in response to the point made by the hon. Member for Aberdeen North about scrutiny and needing provisions in the Bill. This Bill will, of course, have Report stage, which will be an opportunity for scrutiny by a far wider group than a Committee on which the Government might typically have a majority of one.”
“Amendment 2 would require the Treasury to consider recommendations made by a relevant Select Committee or a resolution of the House of Commons when considering the rate of import duty that ought to apply in the standard case. The Treasury will listen closely to recommendations from a range of interested parties, including relevant Select Committees and, of course, Members of the House. In addition, Select Committees already have the power to question Ministers on policy within their departmental remit, and the Treasury will answer any questions from relevant Select Committees. Therefore, the Government believe that it is not necessary to include that in the Bill.”
“It is a pleasure to serve under your chairmanship, Mrs Main. I thank the hon. Member for Bootle for his remarks. His usual brilliance was enhanced by an unknown quality of being able to summon dramatic music to enhance his comments. He gets better and better, the longer we hear from him. The hon. Gentleman raised various general points, including the fact that this is, in effect, a Finance Bill and therefore will not be amended in the House of Lords. There are good reasons for that. There is a very, very long tradition for Bills that relate substantially to tax and the rating of charges to be handled in that way—both by this Government and by Labour, when it was in government.”
“The Bill deals narrowly with duties, and more robust scrutiny is suggested through the affirmative statutory instruments for the first introduction of the tariff and for all duties that are changed in an upward direction afterwards. He stated that there will be a huge change, but the Bill’s purpose is to narrow down that change wherever we can, not least regarding our tariff arrangements.”
“The Government of course listen to everybody who has an opinion—or, should I say, a relevant opinion; a rational opinion, even—on the matter in hand, and we will continue to do so. The hon. Member for Bootle raised the obvious and important point that with Brexit in the round, we are looking at a big constitutional change—I think that was the expression he used—which is undoubtedly true. However, he seized on that known fact to suggest that in the narrow case of the change in the duties on specific goods, we should therefore have a highly augmented level of scrutiny. I do not think that the two things are linked.”
“Before I deal with the specifics of clause 8 and the new clause, I will respond to the hon. Member for Aberdeen North. She exhorted me to consider her pleas carefully—how could I possibly not, under those circumstances? I can reassure her. As we were discussing earlier, I had haggis for lunch, with some mashed potato and swede, and I now have the “Braveheart” spirit—although that did not end all that well, did it? However, fortified with that spirit I will do my utmost, as I would in any case, and consider the amendments very carefully. I am sure that the hon. Lady will return to the matters on Report.”
“The hon. Gentleman has eloquently revisited the points that he made in his opening remarks. We have a narrow scope for the tariff’s introduction, with all the thousands and thousands of different categories, duties, goods and so on that will be contained within it. It allows for provision to vary those duties. As I mentioned, we have said that when the tariff and all the duties that are under it are introduced—and indeed, when the duties are increased, or the Government seek to increase them—the affirmative procedure will be in place. Given the narrowness of the scope of the regulations and the fact that enhanced scrutiny will be in place through the affirmative procedure, I hope that the hon. Gentleman feels that that will be enough under the circumstances.”
“On the proposed requirement for the Treasury to make regulations, it goes without saying that the Government are required to meet their international obligations in the trade agreements that they have entered into. The word “may” is used, however, because there might be unforeseen circumstances that make it inappropriate for the Treasury to be obliged to lay regulations. As I say, however, the Government will of course be bound their international obligations. On that basis, I urge the Committee to reject the amendment.”
“As the hon. Member for Aberdeen North has said, the amendment seeks to do two things. It would require the Treasury to consult before giving effect to a trade arrangement that has been agreed with another territory or country, and to make regulations in such circumstances. To take the first of the points, any consultation on regulations made under clause 9 would not be meaningful as the Government would not be in a position to take account of the views received without withdrawing or renegotiating the agreement reached. As set out in the trade White Paper, the Government have committed to engaging stakeholders throughout the process of negotiating new trade arrangements.”
“As a member of the EU, the UK is part of around 40 free trade agreements with countries and territories outside the European Union. When the UK leaves the EU, the Government are committed to seeking continuity in our trade relationships, including those covered by the EU’s FTAs or other EU preferential arrangements.”
“Clause 9 allows the Treasury to implement preferential trade arrangements on the recommendation of the Secretary of State. That will enable the rate of import duty applied to goods originating from a territory covered by a preferential arrangement to be lower than the standard rate. The clause ensures that the tariff-related part of any new or existing free trade agreement can be implemented and enables the UK to continue the treatment that the British overseas territories currently receive. The Bill does not give the Government powers to sign such agreements but to implement the tariff parts of them. The clause is essential to ensuring that the UK can implement any tariff outcome from negotiations with the EU. The Prime Minister has been clear that our aim is to secure a tariff-free trade deal with the EU.”
“That is a specific question for the Department for International Trade, but think all the indications are that we have been out speaking to many potential trading partners.”
“It is therefore appropriate and proportionate for the negative procedure to apply. Any delays in implementing preferential duties in trade arrangements could have significant impacts on UK supply chains or exporters who rely on the arrangements. As set out in the trade White Paper the Government are considering how to ensure that the process for negotiating new trade deals is transparent, efficient and effective, and we will ensure that Parliament is engaged throughout.”