MPs back customs union (with Crown Dependencies)

Opening the debate on Monday 21 January 2019, Financial Secretary to the Treasury Mel Stride described the passing of the SIs as “an important step in meeting the government’s commitment that the UK’s departure from the EU delivers for the whole UK family, including the Crown dependencies.” He explained: “The Crown dependencies are currently part of the EU customs union. This provides the legal framework necessary for goods to move between the United Kingdom and the Crown dependencies. The Crown dependencies will therefore leave the EU’s customs union alongside the United Kingdom. The three Orders… will give effect to new customs union arrangements that will maintain our current customs relationships with the Crown dependencies after our European Union exit. Crucially, the arrangements provide that goods moving between the UK and the Crown dependencies will not be subject to import duty.”

Shadow Chief Secretary to the Treasury Peter Dowd, speaking for Labour, accused the Government of signing an agreement with the Crown Dependencies before agreeing it with Parliament. He also argued that the government’s press release on this measure had been ambiguous: “the press release says that new arrangements with the Crown dependencies will be necessary when the UK leaves the EU customs union, but later it says that the new arrangements will be compatible with any form of relationship with the EU.” He also wondered why separate SIs had been drafted for each of Jersey, Guernsey and the Isle of Man, given the common features of the instruments.

The Financial Secretary replied that “the Crown dependencies are jurisdictions in their own right, so it is only right and proper that there be a statutory instrument for each.” He explained the process of agreeing the customs union saying it operates “broadly as follows: having entered into a political agreement with the Crown dependencies, we are required to approve the draft orders, which will then go to the Privy Council. The relevant statutory instruments will then be laid under the negative procedure in the latter part of February, setting out the details of the arrangements with the Crown dependencies.”

The shadow minister was unconvinced, and concluded: “There is a huge amount of ambiguity in this measure, both in the technical sense and the political sense. Given that ambiguity, the answers I have had from the Minister today do not convince us that we should support these proposals.”

There were votes on each of the three Orders, and each was passed by 9 votes to 5. The full debate can be read here.

By George Crozier, CIOT Head of External Relations.