Thank you to those who contacted me regarding the Government’s proposed customs arrangements after the UK leaves the EU, and amendments to the taxation (Cross-Border Trade) Bill.
Leaving the EU means leaving the single market and the customs union. These are the main and essential elements of the Union. The UK will be free to make its own trade deals after its withdrawal from the EU but it will also need to put in place new customs arrangements. Remaining a full member of the customs union would mean we could not make our own trade deals.
The Government has set out its position on the customs union and I am encouraged by the approach that it has taken. It wants the freest possible trade in goods with the EU and it has proposed that this be achieved either through streamlined customs arrangements or through a new customs partnership with the EU.
The first solution would involve a new customs partnership with the EU that would negate the need for a customs border with the EU. The UK would have the same requirements as the EU for imports from overseas destined for the EU. This would ensure the correct EU duties are paid but would still allow the Government to set its own tariffs for goods destined for the UK market.
The second solution would mean simplifying customs arrangements to the greatest possible degree. Unilateral and negotiated measures would remove barriers to trade and use technology to simplify customs procedures.
Whatever the solution, an implementation phase will give companies the time to adjust to the new arrangements. This phase will not be of unlimited duration but it will prevent any unnecessary disruption to the UK or the EU.
It is usual practice for primary legislation to establish a framework and for secondary legislation to set out the rules concerning administration, collection and enforcement of tax. The Bill contains appropriate delegated powers to allow the Government to deliver on a range of potential outcomes from the negotiations with the EU.
I can assure you that Parliament does have the opportunity to exercise proper scrutiny of any regulations. For example, the House of Commons would be asked to expressly approve the first UK customs tariff and any introduction of export duty. The Bill will allow the Government to give effect to legislation immediately in order to ensure that there is not a gap in the legislative provisions, but the regulations would cease to apply after a short period of time in the event that they did not obtain the express approval of the House of Commons.
In the event that a customs arrangement with another country or territory is agreed, such a move would be subject to a treaty, and would not come into effect until approved by the House of Commons.