Recognising the values and needs of our modern UK economy
Trade negotiations are ongoing and we need to prepare for the end of the transition period, regardless of the trading terms agreed. The Government is therefore introducing a Taxation (Post Transition Period) Bill, to establish a legal framework for the changes to VAT and customs that are necessary from 1st January.
I spoke in the Second Reading debate of this Bill to noting the opportunities and the challenges that we face as we reach the end of the Transition Period.
The Bill reflects the complexities that have inevitably arisen as we, an historic union of four distinct nations, seek to disentangle ourselves from 40 years of economic and increasingly political union with our European neighbours.
The Taxation (Post-transition Period) Bill
The existence and contents of the Taxation (Post-transition Period) Bill encapsulate the opportunities and complexities that we, the United Kingdom of Great Britain and Northern Ireland, face as we reach the end of the transition period. As we regain control of our money, borders and laws, we have the opportunity to innovate and, in relation to taxation, to remould our regulations around the values and requirements of our modern UK economy.
For example, the Bill introduces some administrative and procedural VAT changes that not only are legally necessary, but allow us to tackle non-compliance and to support our high streets to compete with online sales. That is important in the current economic climate where, for nearly nine months, our high streets have faced unprecedented restrictions and sales have plummeted, while online retailers have traded unhindered and made record profits. I therefore support the measures in the Bill that stipulate that VAT is due from online sales by companies that import goods into the UK. That will ensure a more level playing field for our bricks-and-mortar retailers.
Another opportunity presented by our departure from the EU and the end of the transition period is our potential ability to crack down on tax evasion. The Bill also makes technical provisions on that issue. As well as realising the administrative opportunities that we can embrace as we leave the EU, the Bill reflects some of the complexities that have inevitably arisen as we, an historic Union of four distinct nations, seek to disentangle ourselves from 40 years of economic and increasingly political union with our European neighbours.
During the referendum campaign in 2016, I was not actively involved in politics and I was not a member of a political party, but I agonised over my vote. I was torn between the moral conviction that our UK Parliament should be sovereign and the practical acknowledgement that any divorce after 40 years of union will be complicated and messy—of course, both are true.
Following 17 million votes to leave the EU, it is right and democratic to leave, but is also a complex and challenging process that has tested our determination and resolve for three and a half years. That is why the Bill must also make provision for all the circumstances that we may face following the outcome of ongoing trade negotiations. We cannot gloss over or underestimate these complexities or pretend that they should not exist. The history of the relationship between each of our four nations is unique, and it is based on cultural and relational settlements as much as law and statute.
Whatever the outcome of the trade negotiations, we must ensure that we have a VAT and customs framework in place to allow trade across the UK to continue as seamlessly as possible. That is what this Bill will achieve, and it is why I support it as a sensible, responsible and necessary piece of legislation.
