Dear Mr. Afolami M.P.,
RE: European Union (Withdrawal) Bill
We believe that early next week, the House of Commons will vote on 15 amendments to the EU (Withdrawal) Bill recently approved by the House of Lords. Harpenden for Europe is writing to you to express our views on three major amendments. We have included what we believe are the correct amendment numbers, but please excuse any mistakes we might have made here as this is not the easiest information to obtain.
The three specific amendments we wish to discuss are those relating to the Customs Union (amendment 1), the Northern Ireland situation (amendment 88), and giving Parliament a meaningful vote on any eventual deal that will be reached (amendment 49).
The amendments on retaining much of the EU’s Charter of Fundamental Rights (amendment 15), removal of the ability of ministers to determine whether an individual may challenge the validity of retained EU law (amendment 18) and increasing of the Henry VIII bar from “appropriate” to “necessary” (amendment 31) speak for themselves. They are basic changes that make legal sense and we will not waste time putting forward their case.
Customs Union amendment tabled by Lord Kerr
Requiring the government to commit to negotiating a customs union with the EU by the 31st October 2018 should no longer be as contentious as it was when this amendment was debated in the House of Lords. As is now clear, the ‘backstop’ arrangement requires the entirety of the UK to be within the Customs Union because of a failure to come up with a credible proposal to deal with the Northern Ireland border. In the meantime, there are significant benefits to staying in the customs union.
Remaining in the customs unions removes customs duties and charges having equivalent effects (CEEs), making trade with the EU cheaper. EU trade protection measures also currently benefit the UK by increasing our influence on the world stage.
On a more technical note, VAT is a critical area. The EU VAT refund (and VAT Mini One Stop Shop) IT systems support the current flexible VAT refund system, and this is dependent on customs union membership. Customs and excise duty are not payable on EU goods. Currently, travellers from the EU can bring goods back and use the blue channel at airports. Equally, no customs duty is payable where a parcel is sent from the EU to the UK. VAT for small parcels is paid by the seller in their own country unless they exceed their selling threshold in which case they must register and account for VAT in the UK. No VAT is payable on a sale between consumers. Changes to this system will deeply impact those who carry out online e-commerce as a supplementary income stream. For example, if we use the current rules governing small parcels coming from non-EU countries, customs duty is payable on all items valued above £135. VAT is payable on all parcels valued above £15 (or £39 if consumer to consumer).
A fundamental problem we have is the claim that, were the government able to offer a credible alternative to continued membership of the customs union, many on the pro-Remain side would ‘fall into line’. We have concerns with all three of the versions of a customs arrangement with the EU as currently proposed and have detailed them in an appendix to this letter. The fact that there is no coherent argument for leaving the customs union is a weakness in the eyes of both Brextremists and Remoaners. Certainly, the argument that this is something the Brexit vote explicitly dictated is disingenuous at best, and politically manipulative at worst.
The only responsible thing is to vote to require the government to pursue membership of the customs union because this safeguards the interests of the UK now. It will not stop a future withdrawal from the customs union, should for example technology or human ingenuity find a way to square the circle of the Northern Ireland border, whilst at the same time providing sufficient certainty to our business to enable them to plan past 2021 – three years is not enough for manufacturers and suppliers. To the concern that this might be seen to tie the government’s hands behind its back, our EU negotiating partners already know that they have to return a customs union-like deal. We would submit that there is very little that could further weaken the government’s position.
Northern Ireland amended tabled by Lord Patten
Of all the factors that will be impacted by Brexit, the one with by far the most serious consequences is the border between Northern Ireland and the Republic. The open border committed to by the Good Friday agreement has successfully kept the peace in the Province for the past 20 years. If the Brexit deal were to compromise the open border in any way, it would create the grave risk of returning to the days of violence and lead to renewed calls for Northern Ireland to leave the Union. Were this to happen, history would hold the current government responsible. The fact that it was a Labour government that secured the Irish settlement, and a Conservative government which failed to safeguard it, would also concern some of our members.
While the majority of residents in Harpenden will have no direct connection with Northern Ireland, the fate of the region has become an indicator of progress made in the United Kingdom as a whole. It is also the case that anyone who remembers the Troubles will be only too aware of how violence that began there soon spread with atrocities being committed on the mainland over many years.
To her credit, the Prime Minister herself has repeatedly stated that maintaining an open border is a red-line item. However, recently we have seen a spate of proposals being considered by the government regarding custom unions, “Max Fac”, Customs Partnership, all of which have been rejected by the EU and the Republic of Ireland. We have even witnessed shameful attempts by some leading Brexiters to play down the significance of the Good Friday Agreement. The open border now seems to be under threat. Fudges, compromises and delaying tactics are rife. Not surprisingly, the people of Northern Ireland themselves are increasingly anxious about what is being decided on their behalf.
It is only right then the Lords’ amendment which guarantees the preservation of North-South co-operation after Brexit and prevents the establishment of any new border arrangements should be enshrined in the bill. We cannot afford to compromise on this issue.
“Meaningful Vote” amendment tabled by Viscount Hailsham
The “Meaningful Vote” on the Withdrawal Treaty, due to take place in October or soon after, is currently presented as a “Take it or Leave it” vote - either accept the deal, or reject it and be left with No Deal. It is common ground that crashing out of the EU in March 2019 is unacceptable. Two major concerns would be the absence of a transition deal, and UK business would be faced with a hugely damaging “cliff-edge” scenario. Moreover, it would lead automatically to a hard border in Ireland with potentially disastrous consequences for peace in the Province.
Viscount Hailsham’s amendment to the Withdrawal Bill would give MPs the power to stop the UK from leaving the EU without a deal. Instead, in the event of the Withdrawal Treaty being rejected, Parliament, and not government, would decide on the way forward including obliging the Government to return to negotiations on a new basis.
At the meeting you held with Harpenden for Europe on 5th June, you were ready to share with us that a “red-line” for you is avoiding a No Deal outcome. At Harpenden for Europe, of course, we are in complete accord with you on this.
We can understand that you may have reservations over supporting the amendment as is. For example, the strict times envisioned by s.12(6) and s.12(7) of the EU Bill. However, supporting this amendment would be a vital step in securing that the No Deal scenario does not manifest. The question therefore becomes is this the best option before Parliament to reduce the chance of a No Deal scenario occurring. It seems clear that it is.
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