Finance (No. 2) Bill

Jerome Mayhew Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

In this place we often focus on things that can be measured. We talk about money and how it can change the quality of life of our constituents. All too often, however, we underestimate the value of the web of community ties that link us all together. After family, certainly in the communities I represent, it is the community bonds, the web of community ties linking us all together, that are so important in improving the quality of life of each and every one of us.

In Broadland, for example, the largely rural area I have the honour to represent—I know everyone here represents a different type of community—there are community ties such as the active village hall committee, the active church and other faith groups, and organisations such as gardening clubs and amateur dramatics societies. Very important among that list is also the local pub. Those organisations, taken together, are absolutely vital in bringing people together. It is how we create our support networks outside the house or flat in which we live. Covid presented really serious mental health challenges to societies and communities. In my communities, people supported each other, stepped up and got more involved. They got to know their neighbours and they came out of lockdown in a stronger place, not a weaker place.

I want to focus on those really meaningful ties that are not simply economic. I saw a very good example of that last Thursday night, when I was in the village of Rackheath. I had been to the community council meeting, which had finished—Members will be all too familiar with this—sometime after 9 o’clock. I had not had anything to eat, so I went into the Sole and Heel pub to see if I could be served a late supper. Unfortunately, the kitchen had closed at 9 o’clock—so, not a great example on that occasion—but what I noticed when I opened the door was that the pub was full. The pub was full of the local community, with neighbours talking to neighbours at the heart of their community, bringing people together. In Broadland, those kinds of pubs support 1,600 jobs and contribute £46 million to the local community.

It is in that context that I absolutely welcome the announcement in the Budget on draught relief. The proposal will reduce duty on draught beer by 5%. In cider terms, that would be the biggest reduction in duty since 1923. In terms of beer, I understand it is the biggest single reduction in duty for the past 50 years. What impact will that have? It will be a £100 million a year support per annum for our local pubs. For “local pubs”, I think we should read “our local communities”. That will go a long way towards helping to stop the really serious decline that we have seen over the past 20 years in the trade. Since 2000, there has been a 22% reduction in the number of pubs in this country. That is more than 14,000 establishments, and for that, I think of all the community interactions that no longer take place; of all the neighbours who are no longer being brought together in the convivial atmosphere of the village or town pub. That has resulted in real damage to the strength of our communities, and we are here to support our communities.

So without hesitation I welcome this Government’s support for communities in relation to pubs and to the other sectors that bring communities together, including museums and artistic establishments, which have already received some £850 million of support. That goes a long way towards supporting our communities and making them stronger for the future.

Carbon Emission Charges

Jerome Mayhew Excerpts

Monday 1st November 2021 Westminster Hall

[Jerome Mayhew (Broadland) (Con)]

It is a pleasure to serve under your chairmanship, Mr Robertson, and to follow the speech made by the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), the contents of which I very substantially agree with. One of the wonderful things about this debate is that it stretches across the divide that so often separates the views of people in this House.

However, I approach this matter from a slightly different perspective—albeit arriving at similar conclusions—because I see this as the role of the free market. As a former businessman and entrepreneur, I want to unleash the power of the free market to help solve some of the problems that its historical performance has helped create. Too often, the market has been seen as the villain. We talk about business profiteering at the expense of the environment, or businesses trashing the world’s resources, and that applies not just to carbon net zero but to biodiversity. As Professor Dasgupta noted in his report earlier this year, in terms of the biosphere our current practices are using the resources of 1.6 worlds.

It is true that historically, the market has been almost totally blind to the cost of carbon in its economic transactions. When I buy a product—such as this glass—I pay for the raw materials, the design process, the manufacturing, the marketing, the transport and the profit, but I do not pay for the cost of the carbon emission, because that is described as an externality: it dissipates into the atmosphere and there is no significant cost attached to it. The result of that misallocation of resources is that the transaction is incomplete. As a purchaser, I am not having a true economic exchange with the supplier, because I am paying for only part of the product, not all of it. As a result, there is no signal for consumers to look at two separate products and identify the differential cost between the manufacturing process of a high-carbon glass and that of a low-carbon glass. As consumers we are blind, so all those myriad consumer decisions that we take in our economy every day are ineffective in helping give a signal to manufacturers. The process does not provide a signal to consumers; and consumers, in turn, do not provide a clear market signal to entrepreneurs and businesses.

What are we left with? At governmental level, we all know that the climate change crisis is a huge problem, so we have plans from Government, who are picking technology winners by investing in hydrogen, for instance. I hope that hydrogen will be a key part of the solution in our progress towards net zero by 2050, but it might not be. The real problem is that we are currently relying on the Government to take those kinds of decisions because the market is substantially blind. We need to unleash its power through a price for carbon.

We know that markets are without question the most efficient decider that man has ever come up with for the use of resources. They do so not for moral but for wholly personal reasons: they wish to maximise profits, and the way to maximise profits is to minimise inputs. Properly directed by market signals, the market is the most efficient resource user we can come up with. It informs millions of decisions. Crucially, the market and its myriad transactions create the individual wealth that can go on to fund the additional Government action that the market alone is unable to provide. Although I am a free marketeer, I am not a free marketeer red in tooth and claw. There is absolutely a role for Government to set the structures and give the long-term signals for the free market, and to provide assistance and support for those left-behind parts of our community that otherwise would be disadvantaged by that process.

Our biggest challenge in creating a price for carbon is that the United Kingdom economy is not self-contained; we are part of a global economy. If we increase the price of carbon in this country, which is really another name for increasing the price of energy, that will have a very direct and immediate risk to our domestic economy, particularly our manufacturing base. Increasing the price of energy in our domestic economy would result in an increase in the costs of our manufacturing base, which would then either go offshore and relocate to a lower-cost environment abroad, or it would stay and get undermined by the sucking in of lower-cost, higher-carbon imports. That would result in the worst of all worlds: the destruction of our own economic base and an actual increase in greenhouse gas emissions as transport costs are added to the costs of production.

As an economy, we have been very timid in our approach to applying a cost of carbon. We do apply it in some sectors—about a third of our manufacturing base is affected in some way by carbon pricing through the emissions trading scheme. But that is only a third: two thirds of our manufacturing base has no carbon pricing attached to it at all, and none of this country’s imports are assessed or priced for their carbon content.

How do we address this seemingly impossible conundrum? The answer is, in principle, quite simple: a carbon border adjustment mechanism. That means that, at the edge of the economy, when imports reach the border, we assess those products for their carbon content and take a similar approach to that taken in the domestic market by applying a tariff. That is not protectionist in principle, because it would apply the same price and create a level playing field, as opposed to disadvantaging exports in favour of domestic manufacturing. It must also be transparent and within the permissible exceptions of the World Trade Organisation, which allows for tariffs in environmental cases.

This approach allows, in principle, for the increasing of the price of carbon for the domestic market, safe in the knowledge that imports will have a similar price attached. A lot of work has been done by think-tanks and others—and, I hope, by the Treasury and the Department for Business, Energy and Industrial Strategy —on how we can start applying this approach in practice. Conceptually, it is a very simple process, but it has the potential to be fiendishly difficult to apply. If we can apply it, the benefits would be enormous. The market signals would incentivise the reduction in carbon manufacturing processes that this country seeks to achieve.

The benefits would also expand beyond our borders. If a manufacturer in a third country—let us say, for example, in China—exports its product to the United Kingdom, they will not want to receive a significant tariff addition to the price of the product. The Chinese Government—or any other third-party Government—have a choice. They can think to themselves, “Well, we can either have a tariff applied to our exports, which then gets paid to the UK Treasury, or we can apply a similar process ourselves and keep the money here in China.” The third option is that they reduce their 70% to 80% reliance on coal for their energy, and reduce the differential between their carbon production and our own. All these are very positive international signals that we can spread beyond our borders through the imposition of a CBAM.

There is evidence that this is already working. On 15 July the European Union published a draft Bill to implement a carbon border adjustment mechanism throughout the European Union. Even before that has come to fruition—it is just at draft stage—there is evidence that automobile manufacturers in South Africa are already seeking to decrease the carbon content of their manufacturing process, because they are concerned that they will be adversely affected by the imposition of a CBAM in the European Union. Even the publishing of a Bill—a draft Bill—is already having real-world positive impacts on the reduction of carbon.

Another advantage is the potential for reshoring manufacturing production to the United Kingdom. It removes one of the current disincentives for high-energy or relatively high-energy production in this country because we do have a price for carbon through the ETS. That is not sufficiently significant to change consumer behaviour on a more widespread basis, which we wanted to do, but it is enough to provide a minor disincentive to have manufacturing in this country. If we can remove that disincentive, it will encourage reshoring. Research undertaken, I think by Capital Economics, into the steel industry in the United Kingdom has concluded that steel manufacturing’s international competitiveness would actually be increased through the imposition of a carbon border adjustment mechanism by between £50 and £75 per tonne through the 2020s.

In my submission, we have a political opportunity now not just with the advent of COP26, but, more significantly perhaps, with the publication of a draft Bill by the European Union. This gives us an opportunity to address one of the key challenges to a CBAM, which is how we deal with the concern or disapproval of large exporting countries that have a high carbon input—for instance, China. We have an opportunity to join forces with the European Union and have a more internationalist approach to the introduction of a CBAM now. It would not hurt given that, dipping into another language, we have a certain froideur across the channel currently, and sticking to the same approach, what about a bit of rapprochement?

There is a joint objective here. With Brexit, we are allowed to be nimble of foot. We can come up with these policies ourselves, and we are not held back by a pan-European approach. Equally, it does not prevent us from agreeing and co-operating with the European Union when it is in our national interests. I think this is a great example of where our national interests and those of the European Union coincide very neatly, and it gives us an opportunity to build bridges should we wish to do so. It also helps us with the potential approach to China, in that it is the entire European market that is taking—or potentially taking—this approach, as well as with the United States of America, which has expressed an increasing interest in the concept of some form of carbon border adjustment mechanism.

I mentioned earlier that CBAMs are simple in principle and hard to apply in practice. I am agnostic as to how we do it, and many different approaches have been suggested. We could expand on the current ETS. We could, as Mr Carney has suggested, take the key products that are internationally traded—steel, cement, aluminium, chemicals and so forth—and start on that basis, but then build out into the wider economy as we gain confidence and competence in the process of a CBAM. We could apply it by sector assessment by country, which would be more of a purist approach, but much more complex to apply. I suspect that the answer is to start small and to grow as we learn; but the sooner we start, the better. I conclude my speech by challenging anyone to come up with a way in which we can impose a price for carbon without some form of carbon border adjustment mechanism.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the petitioners on bringing forward the petition and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on presenting the debate and making some key points. It is a worthwhile time to debate this subject, given that COP26 is taking place in Glasgow as we speak, and how we achieve net zero in the fairest way is something that needs serious discussion. It is a slight disappointment that there were not more Back-Bench contributions, but so be it.

I completely agree with the three key points made by the hon. Lady. Obviously, we need to generate the shift to low-carbon technologies, but it is critical that we protect the most vulnerable and stop carbon leakage. The hon. Member for Broadland (Jerome Mayhew) also made that point. He made an interesting contribution, and I will try to summarise it. I think he said that although he is a proud free marketeer, he is not really a free marketeer because interventions need to be taken. That is quite an interesting dynamic. He also seems very much to be a protectionist when it comes to imported goods—but again for the right reasons, because we are talking about carbon border adjustments.

[Jerome Mayhew]

I want to make it absolutely clear that I am not a protectionist. If a CBAM is to be successful, it is important that we ban the P-word. The tariff has to be applied at exactly the same level as that used in the domestic economy.

[Alan Brown]

It is possible that I was being slightly flippant when I used the word “protectionist”. I take his point that if we are going to do this correctly, it will have to be in collaboration with other countries. I agree with that.

If we believe in the basic principle that the polluter pays, a carbon tax makes sense. If we are serious about achieving net zero, we need to give serious consideration to carbon taxes. However, as has already been said, any such taxation needs to be fair. It cannot be structured in such a way that companies feel obliged or rewarded for relocating to other countries, therefore defeating the purpose. Critically, it must also not lead to the poorer in society paying a bigger burden, especially if a tax is levied on gas bills. The reality is that the more affluent will be able to switch to heat pumps, but those struggling to pay their energy bills will have no chance of doing so. We cannot leave the most vulnerable to pick up the carbon tab for others as the energy sector transitions to net zero.

The recent Government policy of £5,000 grants for heat pumps is still insufficient for most people to be able to afford the installation of a heat pump. The unit cost of a heat pump is still in the price range of £6,000 to £10,000. A £5,000 grant goes only part of the way, but it does not make up for all the additional work that is also required. We need to have proper energy efficiency measures, which are welcome but cost money, such as a new water tank, possibly new radiators, decommissioning boilers, and then there is decoration works that need to be done to a property once all that work is completed. That £5,000 grant is clearly not the pathway to increasing the number of heat pump installations from current figures of 30,000 per year to the Government target of 600,000 a year. Going forward, we need to look at that in the mix. Before a carbon tax is introduced, we need to ensure that it does not create more people who are fuel poor, and also look at how we use the revenues from the carbon tax to help get heat pumps and energy efficiency measures for those who need them most.

At the moment, decarbonisation of the power sector is being paid for by levies from our electricity bills. The UK Government have acknowledged that that is unsustainable, because roughly a quarter of electricity bills are made up of those levies. That needs to change; there needs to be a fairer system. That is where carbon taxes could be looked at, but—I am repeating myself—it is important that the most vulnerable are protected.

In wider industry, cost-effective decarbonisation solutions need to be available to industry when a carbon tax is introduced, and taxation must be structured so that it is fair and equitable across the UK. Recently, the UK Government opted to fast-track two carbon capture and storage clusters in the north of England but, disgracefully, they have made the Scottish cluster a reserve cluster. That means that, despite the Scottish cluster being the most advanced in project development and deliverability, it is estimated that the two other clusters will proceed at a faster rate.

It would be inherently unfair for the Government to support, either via direct taxation or consumer levies, some industries in some areas of the country while potentially slapping a carbon tax on another area just because they have not been progressed at the same rate. These things have to be looked at in the round. The Scottish cluster takes in the two biggest carbon dioxide emitters in Scotland—Peterhead gas station and the INEOS facilities at Grangemouth. As the biggest polluters, they have to pay to remedy that—that is where we are right—but will they make that investment? They need that assistance, and they must not be disadvantaged when others are getting support.

Revenues from a carbon tax must be reinvested in green initiatives targeted at the most vulnerable and the hardest sectors to decarbonise. They must also be completely transparent. We have had a carbon tax in the airline industry for years: air passenger duty, which is supposed to follow that basic principle of polluter pays, in relation to aircraft emissions. The actual reality is that, over the years, APD has become nothing more than a Government revenue stream. It is not ring-fenced or reinvested; it becomes part of the “money in” column and is added to the mix of Government expenditure.

It is outrageous that over the years, so-called environmental taxes have been levied and never ring-fenced and reinvested in the way they should have been to reduce emissions. Last week, the Chancellor made the crazy announcement of lowering APD on domestic legs of return journeys. We need a serious debate about support for the airline industry and the wider travel industry, but a reduction in air passenger duty should apply only to airlines that use sustainable aviation fuel, which costs more money. At least companies would be incentivised to lower their emissions, with the offset reward of reduced APD. It makes no sense in the current climate to do a blanket APD cut.

In the aviation industry as a whole, for years consecutive Governments of different colours have maintained a policy that aviation fuel is duty free. We pay our petrol duties at the petrol pump for domestic use in our cars, but all these years, aviation fuel has been duty free. That makes no sense. It needs to be looked at in the round. I do not want to kick the airline industry when they are down and make it harder for them, but we need a system that is fair for everyone on carbon taxes, emissions and incentivising behaviour to drive change. The Government need to look at that.

In the oil and gas sector, £350 billion of revenue has come from Scotland over the years. Those were carbon taxes, but that money has never been ring-fenced or reinvested. A sovereign wealth fund has never been created. Most countries across the world have created sovereign wealth funds, which they are using now, in these tough times, either to help their economy, stimulate their economy, or do green initiatives on the path to net zero. But the UK Government have never done that. It is to their shame that we do not have that money, as a legacy, to go forward.

Today, I actually managed to attend a COP26 panel event before I got on the train to come down to Westminster. There was a representative at the event from Louisiana; he was explaining how for years it has used its offshore revenues to pay for climate adaptation measures along its coastline. Obviously, Louisiana is one of the areas most affected by coastal erosion. That shows us what can be done with long-term thinking, but it needs the initiative to look at revenues that are coming in and how to use them wisely. That is what I am calling for. If there is carbon taxation coming in, it must be transparent and it must be available to be reused to fight climate change.

In a similar vein, I represent a former coalfield area. Carbon taxes had been applied to the extraction of coal over the years, but a few years ago, when the open-cast coal industry collapsed in my constituency, it left massive craters that needed reinstatement work at a cost of millions of pounds. Carbon taxes came from my constituency to the Treasury, but they just went into the black hole. When we asked for assistance for restoration work on those abandoned coalmines, the answer that came was, “No. Too bad. That money came in and it has been used. There is no money coming back to your constituency. It doesn’t work that way.” That shows the folly of not ring-fencing a tax for the purpose that it should be ring-fenced for. Again, transparency is utterly critical if we are to go forward.

I would also say on transparency that the Treasury will have to develop these taxes following open consultation with industry, non-governmental organisations and charities. I also suggest that it would be worth the UK Government’s following the lead of the Scottish Government and having a just transition commission that is able to advise the Government on fairness, look at policies across the board and advise the Government accordingly. Equally, the Treasury cannot be left with the power to introduce exemptions from carbon taxes without robust and transparent procedures, or else it is a lobbying exercise and it becomes open season for donors and cronies to lobby the Government and possibly get exemptions. Again, anything that comes forward needs to be transparent.

I have just one further warning about the money not becoming a Treasury income, because that nearly happened post Brexit. The Department for Business, Energy and Industrial Strategy had devised an emissions trading scheme, which was agreed with all the devolved nations, but at the eleventh hour the Treasury wanted to throw away all that work and replace it with the introduction of a carbon tax. That was clearly just because the Treasury saw it as an income stream. That cannot be allowed to happen; the Treasury cannot have carte blanche to do what it wants. It also shows us that carbon taxes have to be developed in conjunction and consultation with the devolved nations.

In Scotland, we have our own net zero by 2045 target. We have, as I said, the Just Transition Commission. We are working with our own policies, so it is only right that carbon taxes be introduced in such a way that they do not adversely impact our direction of travel.

I am getting near my conclusion, Mr Robertson. I have some concerns about a carbon tax, but largely I do favour the concept. I pay tribute to the work done by the Zero Carbon campaign, which has illustrated and highlighted the fact that surveys prove that such a tax is generally popular with the wider public. They understand the need for net zero; they understand the benefits of a carbon tax being introduced, but again, the critical question is whether that is being done fairly. Scotland’s Climate Assembly has had similar findings with the delegates who have participated in the assembly.

Things can be done to resolve the concerns. Again, that is about transparency. It is about targeted reinvestment. Ireland is already doing that: it targets top-up social welfare payments. That is something that this Government could look at, especially with the cost of living and the fuel and energy cost crisis at the moment. They could put more money into supporting electric vehicles as we try to transfer away from the internal combustion engine.

Something that the Scottish Government are doing is interest-free loans. They have extended interest-free loans to the second-hand market to try to extend affordability, but the UK Government are cutting the grants available. If we are going to have carbon taxes, we need to further stimulate the electric vehicle market and ensure that some people are not left behind.

The decarbonisation of our heating systems is absolutely critical. It would be good to step up energy efficiency installations, treat energy efficiency as a capital infrastructure programme and speed up the upgrading of all properties to EPC––energy performance certificate––band C. That would reduce emissions and fuel costs. What could be a fairer way of using the carbon taxes that are levied?

I agree with the two contributions so far about introducing a broader carbon adjustment to minimise leakage or offshoring. We know that carbon taxes can be successful in changing behaviour. We know that they seem to have wider support if they are introduced fairly and transparently, so let us continue with this serious discussion. Let us find a way to introduce them but ensure that it is done in a way that helps us get to net zero and is part of a just transition.

--- Later in debate ---

[Lucy Frazer]

I thank the hon. Member for her intervention. The two schemes that we already have in place are obviously ones through which the polluter pays; they are about industry recognising that when it pollutes, it must pay for that.

The hon. Lady, as well as the hon. Member for Kilmarnock and Loudoun (Alan Brown), talked about what the Government could do to support individuals. The issue of heat pumps, and the importance of such measures not being too burdensome on those who need to implement them, has been raised on two occasions. A number of Ministers have made this point clearly, but I reiterate that we are not forcing people to take measures such as installing heat pumps: we are saying that if they wish to do so, a grant is available to them. Regarding heat pumps in particular, I would like to make it clear that we expect the price to come down. I suspect that that will happen when we have a requirement for all new homes to be net zero by 2025. When there is the volume of supply of heat pumps that we need, I suspect that their price will come down, as we have seen in relation to electric cars, for example.

[Jerome Mayhew]

My understanding is that it is not the price of the product that will go down, because France is already installing 400,000 heat pumps, so there is volume in product. Interestingly, it is about the mechanism of installation: when the big electricity suppliers begin to install heat pumps, rather like British Gas does with boilers today, that is when the prices will really come down.

[Lucy Frazer]

I am grateful to my hon. Friend for that interesting intervention. I hope that the prices of installation will fall as well.

Ministerial Code/Register of Ministers’ Interests

Jerome Mayhew Excerpts

Tuesday 18th May 2021 Commons Chamber

[Penny Mordaunt]

We have seen all sorts of innovations over the last year given what technology now enables, and the hon. Gentleman makes a very sensible suggestion. It is for Lord Geidt to take these matters forward, and I am sure he will have heard what the hon. Gentleman has said today.

[Jerome Mayhew (Broadland) (Con)]

Given that the NAO has found “no evidence” that Ministers were involved in any decisions around emergency PPE procurement, does my right hon. Friend agree that throwing unsubstantiated mud like this for party political advantage damages not just the Government but our political processes and is deeply irresponsible?

[Penny Mordaunt]

I agree with my hon. Friend—and it also damages business. Without the efforts of the private sector, whether it be pharma companies or production lines changing to produce what the country needs, we would have been in a really sorry state. Let us be frank, part of this agenda is to discredit the private sector.

Government's Management of the Economy

Jerome Mayhew Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Jerome Mayhew (Broadland) (Con) [V]]

The last 10 years did not weaken the foundations of the economy; they did the exact opposite. We took the painful decisions to repair public finances during a decade in which the Government also managed to provide uninterrupted economic growth.

I am not the first person in this debate to mention the fact that the Government fixed the roof of public finances. They reduced Labour’s deficit by more than 80%. Why? So that we would be able to respond with hugely increased funding in a real crisis. Labour never fixes the roof. It is because of the responsible decisions of Conservative Governments that the UK has the financial firepower to support the whole economy—the economy in Scotland, Wales, Northern Ireland and England—throughout the pandemic, by spending more than £280 billion in support, and counting.

Conservatives fix the roof of public finances while at the same time reducing inequality in our society. Labour’s claims to the contrary are wrong. All measures of inequality, whether they measure original, gross or disposable income, have narrowed under the Conservative stewardship of the economy. Labour talk the talk, but the Conservative party has delivered for the low-paid. In fact, the Conservative stewardship of the economy has led to the lowest-paid people being up to £5,200 better off, in real terms, than they were in 2010—and that came after 13 years of Labour Government.

The approach to fairness that I have outlined needs to continue. The motion calls for a further pay rise for public sector workers—the heartland of Labour’s union bosses—and we would all love to be in a position to deliver that, but we need to recognise that as a result of the pandemic, private sector wages have fallen by almost 1%, while at the same time last year public sector wages rose by almost 4%. Unlike the private sector, wherein people have lost jobs, been furloughed and had insecure employment and reduced working hours, the public sector has been largely protected.

In the circumstances, is it fair to tax the private sector even more to pay for further public sector pay increases? It might be popular, but it would not be fair or in the long-term interests of the country. Let us get the economy growing, with private sector pay increasing, so that we can afford to pay the public sector more as well. The Conservative Government can be trusted to steward the economy for the long term; Labour simply cannot.

Taxation (Post-transition Period) Bill

Jerome Mayhew Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 9th December 2020 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

This time yesterday we, frankly, would all have celebrated seeing what is in this Bill; today, I want to celebrate what is not in it. It is great that we do not have to consider the inclusion of additional measures to take account of the failure of the Joint Committee to come to an agreement on the proper interpretation of the Northern Irish protocol; I am delighted to learn that we have now come to the pragmatic and proportionate way found by the Joint Committee for the interpretation and enforcement of its provisions. Just a few days ago the European Union asserted that all goods travelling from GB to Northern Ireland were to be considered as being “at risk” of onward transport to the EU, a patently absurd and obstructionist position, so I heartily welcome this last-minute change of heart.

TD Simon Coveney, the Fine Gael Minister for Foreign Affairs, has said that

“Practical cooperation and flexibility has been agreed to make it as manageable as possible for people and businesses.”

Amen to that, and may the same spirit suffuse the continuing negotiations elsewhere in Europe.



Clauses 2, 3 and 4 put in place the practical requirements to allow for the charging of customs duties and VAT away from the geographical border with the Republic of Ireland while continuing to protect the ability of Northern Irish products to travel without restrictions to the rest of the United Kingdom. This respects the Government’s commitment that goods from Northern Ireland will continue to have unfettered access to the rest of the United Kingdom.

Clause 7 proposes that VAT collection for goods sold in the UK by overseas sellers will move away from the border either directly to the overseas seller or, importantly, where the sale has been facilitated by an online marketplace, to that marketplace. This is a very important step that marks, I hope, the beginning of a much wider reassessment of the role of online marketplaces and the responsibility that they should properly have for the goods of international origin that they sell. All goods sold on our high streets pay the appropriate level of VAT, yet high street shops are being unfairly undercut by online international competitors that have avoided VAT. This clause allows the first step to be taken in recognising that the online marketplace has come of age, and with that coming of age it needs to accept the responsibilities of its powerful market-making position.

I hope that the link between the facilitation of sale and wider responsibilities will be a theme that the Government expand on in the coming months. As I mentioned in the debate yesterday, the same argument can be applied to areas of environmental legislation, such as the extended producer responsibility, as well as the collection of electronic waste for recycling.

I welcome Her Majesty’s Government’s approach. It is no longer credible for the hugely powerful and commercially dominant online marketplaces to wash their hands of what actually passes through their platforms.

Taxation (Post-transition Period) (Ways and Means)

Jerome Mayhew Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Kevin Hollinrake]

No, I do not. The UK Government have to take a number of matters into consideration. They have a collective position. Clearly, we cannot always get exactly what we want in terms of negotiation. My point is that we could have done better in these negotiations and there could have been less drama around them. The fact that these negotiations are concluding so close to the deadline for businesses has been brought about partly because of the divided nature of this Parliament. The hon. Lady and the Opposition should take responsibility for that position.

My point about a fair and level playing field is about the fact that many of our small businesses in the UK compete with online platforms—online marketplaces, as they are called—such as Amazon and eBay. How can it be right that for so long many of those small businesses have been competing at a 20% disadvantage? Many retailers selling into the UK are not paying VAT on those sales. I am pleased that the Government have acted on this and closed the loophole. They have closed a number of loopholes in recent years through measures such as the digital services tax and the diverted profits tax. This creates the fairer and more level playing field for the rest that I very much welcome. There is one more loophole that we could close, not in this legislation, but in the Financial Services Bill, which is going through Parliament at the same time.

Country-by-country reporting would also have a profound effect in closing loopholes that some companies are using to divert profits out of this country.

[Jerome Mayhew (Broadland) (Con)]

The Government are making an important point in this Bill in starting to look at online retailers facilitating the sale and that is making a difference, particularly with international trade. Does my hon. Friend agree that this should be expanded beyond just VAT into things like the extent of producer responsibility and other aspects of international trade?

[Kevin Hollinrake]

Yes, I do. We all know that the best way of driving down prices and driving service for our consumers—our citizens—is through a free, competitive marketplace. Our job, wherever we can, is to let that marketplace do its work. Our job is also to make sure that it sits on a fair and level playing field. My hon. Friend, in talking about regulation for some of the retailers—some of the UK businesses but not businesses abroad—makes a very sound point that the Government should consider.

Going back to country-by-country reporting, let me give an example. Google’s turnover in the UK is about £10 billion. We can work that out by extrapolating certain figures from a couple of years ago. Internationally, it declared a 22% profit margin, which means a £2.2 billion profit in the UK. Based on corporation tax at 19%, it should pay £420 million in tax on that. Last year it actually paid £67 million in tax. That cannot be a fair and level playing field for other UK retailers or other UK companies that compete against Google, particularly in terms of advertising space—many of our regional papers, for example. I would like the Government to bring forward legislation, in some vehicle or other, to tackle that issue.

I am very pleased that this loophole is being closed and I very much commend the principles and the outline of the legislation that we will see tomorrow.

UK-EU Future Relationship Negotiations and Transition Period

Jerome Mayhew Excerpts

Monday 7th December 2020 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

Is my right hon. Friend aware of the strength of solid support from the Conservative Benches for the Government’s negotiating position? Does she agree that a deal can be done, with all the necessary compromises that will entail on both sides, only if it starts from a point of fundamental acceptance of the United Kingdom as a sovereign, independent third country?

[Penny Mordaunt]

I agree entirely with my hon. Friend. I thank him for his support and I thank all Members in this House who are getting behind the negotiating team and sending that clear message to the EU negotiating team this afternoon. There is huge support not only on these Benches but in our constituencies. Whichever way people voted in the referendum, they know that this is the way forward. They want to get these final issues resolved swiftly so that we can all get on with it in the new year.

Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Jerome Mayhew Excerpts

2nd reading & 2nd reading: House of Commons
Friday 11th September 2020 Commons Chamber

[Andrew Lewer (Northampton South) (Con)]

I am glad to have the opportunity to contribute to the debate on this private Member’s Bill and, indeed, to follow its promoter, whom I congratulate on a carefully crafted speech, with much passion in it. There are obviously some things one could take issue with, too, not least the Government’s record on carbon in the economy. Indeed, concerns about the feasibility of current targets and their cost—especially for those on lower incomes—in an already coronavirus-battered economy are well worth raising.

As we have heard, the Bill in essence seeks to enable co-operative and community benefit societies to raise external investment capital for environmental and sustainable purposes. On the surface, that is a sensible suggestion, and in general terms I—and I am sure many colleagues—support some of the objectives that aims to achieve. I am sure that several of my colleagues will make further good and detailed points on the purpose and key provisions of the Bill, but I will give some thoughts as a starter.

I am standing in an unusual place for me, away from the customary 2017-2019 naughty corner, and speaking on this topic is out of my comfort zone as well, but, having looked into it, it is well worth unpacking in debate. Indeed, some interventions have already revealed that to be the case. Co-operatives and community benefit societies are great means of facilitating business with a mutual and social purpose, democratic ownership and governance. The Government have always been supportive of that ethos, changing the law in the Co-operative and Community Benefit Societies Act 2014 to reduce some of the legal complexities and cut red tape on how co-operatives operate. It is encouraging that, since then, the co-operative movement has continued to be successful, generating more than £130 billion of income each year for the UK economy and employing more than 230,000 individuals. I have a personal connection: my dad worked for the Co-op in Manchester and the family is a chapel and Methodist family.

It is important to point out that from day one the Government have had a major focus on climate change and encouraged support for many green industries and green initiatives. In fact, as many colleagues regularly mention, the UK was the first major economy to enshrine into law a commitment to hit net zero by 2050 and to introduce a landmark Environment Bill, which places environmental ambition and accountability at the heart of all Government policy and holds subsequent Governments to account if they fail to uphold their environmental duties. Just last year, the Government published a green finance strategy detailing how they intend to support green financial services, accelerate investments into the UK’s clean growth and encourage a clean global finance market.

A 42% reduction in carbon emissions has been achieved while simultaneously growing the economy by two thirds to the end of 2019, which is the strongest record in that regard among the G7. That trend has the potential to continue, with recent announcements from the Chancellor that the Government intend their rebuilding of the economy after coronavirus to include releasing £3 billion into green investment programmes and to jointly fund a £40 million venture capital fund for green start-up companies, to encourage a new generation of a clean and low-carbon technologies.

[Jerome Mayhew (Broadland) (Con)]

My hon. Friend mentions the very welcome reduction in carbon in the UK economy over the past 20 years. Some of that has been achieved by offshoring carbon emissions to third countries, which is then reimported. Does he agree that an effective way of dealing with that would be the introduction of carbon border adjustment payments?

[Andrew Lewer]

A more general answer to that extremely specific question is that it is important to have realistic goals and targets in country, so that those sorts of ways of trying to get around things are avoided. That is why commitment and passion need to be mixed with pragmatism and realism in seeking targets that are actually achievable.

Covid-19: Future UK-EU Relationship

Jerome Mayhew Excerpts

Wednesday 15th July 2020 Commons Chamber

[Mark Fletcher (Bolsover) (Con)]

Dear oh dear oh dear, it is groundhog day again. We are back to discussing Brexit. I feel almost nostalgic; it is the 2017 Parliament arguments all over again. Why should we delay? What more excuses can we find to hold up Brexit? How can we make working-class communities in Bolsover wrong again? To be honest, I am not so keen on this groundhog day. The people have spoken. We need to deliver Brexit. The argument that we have a pandemic and we need to extend because that will create more certainty is nonsense. It is the wrong end of the lens. The only way in which we can give our businesses and our nation certainty is by sticking to the deadlines we have set out, and I am so proud that this Government are holding firm.

[Jerome Mayhew (Broadland) (Con)]

Does my hon. Friend agree with the director general of the CBI that there is no interest in further delaying transition and that business now wants to get on with it?

[Mark Fletcher]

It is an unusual experience to agree with a director general of the CBI, after so many years in which have disagreed with them, but in this instance it is a delight to agree.

However much I disagree with SNP Members on almost everything, I do at least give them credit for turning up. As I cast my eyes over the Opposition Benches, it is an unusual experience to see only the same number of Members on those Benches as there are in my fan club; they usually way outnumber me on that front. The Labour party has once again abandoned the pitch. Its Members have straddled for so long, trying to keep their true feelings on Brexit hidden. [Hon. Members: “They are hiding.”] They are indeed hiding. Here we are today with three hon. Members sat on the Labour Benches. I feel sorry for the hon. Member for Sheffield Central (Paul Blomfield), who is sitting at the Dispatch Box; I cannot help but feel he will have to summarise all the various Labour opinions that have been expressed today and make them seem like an eloquent argument.

The Economy

Jerome Mayhew Excerpts

Wednesday 8th July 2020 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

We are looking at a really deep recession, with unemployment almost certain to rise vertiginously over the coming months, with a particular impact on the younger workforce. I therefore wholeheartedly welcome the Chancellor’s statement to protect, support and create jobs. That is evidence, once again, that this Conservative Government are not just listening to the people but acting swiftly and dynamically to tackle the economic and social fallout from covid-19.

I also welcome the developing demonstration that this Government are really serious about reshaping the economy to achieve carbon net zero by 2050. We are on a journey of technological development to zero-emission energy and zero-emission land transport, and now is the time to tackle our buildings, which are responsible for 18% of all our emissions. Even with our increased appetite to “build, build, build”, 80% of all buildings likely to be standing in 2050 have already been built. The Chancellor’s £3 billion insulation schemes are a fantastic start, and I look forward to the publishing of the buildings and heat strategy later this year to see how this policy can be further developed.



However, as the Chancellor made clear, our response to the current crisis cannot all be about spending. In the medium term, we need to put our public finances back on a sustainable footing. Baldly, it is likely that ways in which to raise revenue will not be far from the Chancellor’s mind. Anticipating that, we should consider a carbon tax, together with a scheme for broader adjustment payments. Today, the full cost to the economy of carbon emissions is not included in the price of purchase, creating a false exchange. Put simply, when we buy something, we do not know what carbon cost we are responsible for. A carbon tax, which adds in that missing part of a transaction, would remedy that.

Such a tax would make the decision to take advantage of today’s grants for insulation even more attractive, and, rather than costing the taxpayer, could raise significant sums for the Treasury. Its enormous benefits can be summarised as follows: creating an efficient exchange where all the costs of production are reflected in a decision to purchase; creating stronger and more profitable business cases for the new green tech businesses that we want our economy to pivot towards, without having to attempt that by expensive and inefficient Government projects and grants; providing a cash incentive to all of us to reduce our carbon emitting purchases in favour of lower carbon alternatives, thereby assisting the achievement of our legal obligation to reduce carbon emissions to net zero by 2050; and, in addition to all those public goods, generating a very significant income source for the Treasury at a time when everyone else is calling for increased spending. If anything will get the attention of the Minister, I hope that last point will.