Wednesday, 9 January 2019

Statement on the attempt to block a No Deal Brexit

Yesterday the Government was defeated in the vote on amendment 7 to the Finance Bill in relation, which limits the Treasury power to make tax-related changes in the event of a no deal Brexit.

Many of my constituents have expressed their concern about the progress of Brexit followings yesterday’s events and what implications it may have for our departure from the European Union.

Clause 89 of the Finance Bill enabled the Treasury to alter regulations around taxation that currently involve the EU without consulting Parliament. Amendment 7, tabled by Yvette Cooper and voted for by 303 to 296 MPs, withholds these powers unless either the Prime Minister’s Brexit deal has been passed, Article 50 has been extended or MPs have voted to approve a no-deal Brexit.

In theory, this amendment has the potential of making more difficult for the Government to mitigate the damage of no deal. If the Treasury is unable to alter the wording of tax regulations that mention the EU, they might no longer be able to collect certain taxes, for example.

Upon closer examination of the amendment however, it is clear that its provisions only apply to minor tax laws and do not prevent the taxes from being raised, as had previously been expected. That means its actual impact on the government’s powers to raise and collect taxes are going to be relatively minor.

It is important to note that in and of itself, the amendment carries no legal provision to prevent us leaving the European Union without a deal.

The legal positions remains that we will be leaving the EU on 29th March this year, whether or not we have reached an agreement with the EU. The only way to change this would be through a specific act of Parliament – legislation of this nature can only be moved by the government.   

Whilst I am not in favour of a disorderly Brexit and would prefer to leave with an agreement that provides as smooth a transition as possible. However, the withdrawal agreement, as it stands, does not fundamentally deliver on the legitimate outcome of the 2016 referendum. No deal does not necessarily mean that we are worse off, if we are given time and resource to manage an orderly Brexit on WTO terms. I am pleased that the Government is clearly making preparations in readiness for us to leave the EU with or without an agreement.

Those who support the amendment and argue no deal must be ruled out now appear to be in disagreement with each other over what the alternative might be: Are they going to vote for a withdrawal agreement to prevent a no deal, or are they going to try to reverse the will of the British people by extending Article 50 or worse still, calling for a second referendum?

In my view those who supported this amendment have been reckless in seeking to hinder no deal preparations. However, I am content that their actions will amount to very little impact. Please be assured that I will continue to fight to ensure we deliver on the referendum and leave the EU at the end of March.