My Lords, the noble Lord, Lord Berkeley, is unable to attend, so I will move Amendment 227BB in his stead. This amendment represents something of a change of scene from what we have been discussing this evening, relating as it does to the future of the recreational boating sector following the UK’s departure from the EU. But this is an important sector for us. It is not just about the estimated 3.5 million people who take part in boating activity in the UK every year. It is also a thriving business sector, with the recreational boating and marine sectors being a success story in the UK. In 2015-16, the marine industry contributed about £1.3 billion to the UK economy, which adds up to around 33,000 full-time employees and more than 4,500 businesses. We should realise also that this is often in areas where alternative employment is not always available, so the sector is very important to the communities in which it exists.
The industry currently enjoys the benefits of free movement of people and the absence of customs borders between the UK and other EU countries.
There are then, unsurprisingly, a number of issues arising from Brexit, causing significant uncertainty to both recreational boaters and the marine industry. I know that the Royal Yachting Association, the RYA, and British Marine have been in contact with DExEU and other government departments in relation to these issues. Briefly, and for the benefit of the House, I will set out the key issues.
The first is the ability of recreational craft to retain what is called Union goods status, which allows continuous free navigation around the waters of the EU. The second is the nature of the maritime border control regime between the UK and the EU after Brexit. The third is the ability of UK citizens who have RYA qualifications to travel freely to and from the EU for work that is often seasonal.
The Union goods issue requires a little explanation, so I will go into that detail, if noble Lords will excuse me. Vessels and all the equipment on them, such as computers and electronic gear, that enter the EU from non-EU countries are required to pay customs duties and VAT unless the owner can show that they are entitled to exemption. This is not the case if the equipment has Union goods status, which means that it is treated as duty paid. Pre Brexit, vessels moving between the UK and the rest of the EU are treated as Union goods, provided that VAT and customs duties were paid when the vessel first entered the EU. After Brexit, vessels moving between the EU and the UK, and vice versa, should qualify for a temporary relief from duty—but only if the vessel stays for fewer than 18 months in the country in question. So UK citizens who keep their boats in, say, Greece, would find that they would have to pay all the duties or move completely outside the EU before they could re-enter for another 18 months. The result of this is clearly not good for the Britons who have to keep moving their boats around to avoid paying up to 20% of the boat’s value in duties. It is also not good for countries such as Greece that are hosting this tourist trade. Additionally, when boats are moving in long-term passage within EU waters, there might also be customs duty when moving from one EU country to another EU country. It is not clear how that will unfold.
Noble Lords will appreciate that these issues may not necessarily be front of mind and addressed in the broader negotiations on customs and border controls. Accordingly, this amendment asks the Government to produce a report to Parliament in advance of 29 March 2019. This report would set out the rights and freedoms that recreational boaters currently enjoy and how they would be maintained after the UK’s withdrawal from the EU. It would provide a clear opportunity for the Government to offer much-needed certainty to the thousands of recreational boaters—and of course to the marine businesses as well.
Without that reassurance, there is potential for significant damage. Very briefly, that significant damage comes in terms of costs and the administrative burden faced by boaters and business, with associated significant damage to the resale market for boats. It also causes new maritime border controls, which could be disproportionate and compromise navigational safety—and, as I said before, RYA instructors could find it difficult to do seasonal work elsewhere.
The RYA and British Marine have been in touch, and I know that they are ready to negotiate. None the less, the importance of this sector to communities all around the country should not be overlooked when there is so much else going on. We have talked about the need to negotiate everything in such a short time, and this is just one more thing that the Government need to place on their list. Before the formal departure from the EU it is vital that the Government commit publicly to setting out how they will defend the interests of UK boaters and marine businesses. I will be interested to hear the Minister’s response to this amendment.