Today I am informing the House about updates to the Temporary Tariff Regime announced in March. This regime would come into effect if the UK leaves the EU without a deal on 31 October 2019.
The temporary tariff would apply equally to all countries where the UK does not have a trade agreement or other preferential agreement in place - this would include the EU.
The policy announced in March, and updated today, is designed with consumers and producers in mind. The majority of imports will be tariff free, with tariffs only applying on a small percentage of UK imports. The Government has listened to the concerns and needs of businesses and consumers since the Temporary Tariff Regime was first announced and has made three specific amendments to the tariff rates published in March.
- Lower tariffs on HGVs entering the UK market, striking a better balance between the needs of British producers and the SMEs that make up the UK haulage industry, ensuring that crucial fleet replacement programmes that help to lower carbon emissions can continue.
- Adjusted tariffs on bioethanol to retain support for UK producers, as the supply of this fuel is important to critical national infrastructure.
- Applied tariffs to additional clothing products to ensure the preferential access to the UK market currently available to developing countries (compared to other countries) is maintained.
These three specific amendments will enable UK supply chains to continue to operate smoothly, keep prices down for consumers and ensure that we are fully prepared to leave the EU on 31 October whatever the circumstances.
In considering adjustments to the temporary tariff, the Government has continued to give regard to the five principles set out in the Taxation (Cross-border Trade) Act 2018:
- the interests of consumers in the UK;
- the interests of producers in the UK;
- the desire to maintain and promote external trade of the UK;
- the desire to maintain and promote productivity in the UK;
- the extent to which goods are subject to competition.
Throughout the temporary period, the Government will also consider exceptional changes where clear evidence is provided by stakeholders against the criteria set out in the Taxation (Cross-border Trade) Act 2018 and would provide a mechanism to hear business and consumer feedback.
The Government aims, where possible, to minimise any new costs to business and mitigate any price impacts on consumers. For that reason, tariffs will only apply to 12% of total UK imports but there will need to be tariffs on some imports to make sure certain industries get the support they need.
This remains a temporary policy that would apply for a period of up to 12 months in the event that the UK leaves the EU without a deal on 31 October.
Information on specific tariff rates that would apply under the temporary tariff have been made available through the Government website.
This statement has also been made in the House of Lords: