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

Andrew Jones Excerpts

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

[Andrew Jones (Harrogate and Knaresborough) (Con)]

It is always a pleasure to follow my right hon. Friend the Member for East Antrim (Sammy Wilson). He is one of the most effective and passionate communicators in this Chamber and, if nothing else today, he has reminded the Labour party that there are two sides in a negotiation.

We have had a very wide-ranging debate so far, some of it even on the ways and means resolutions. Should these actually come to a vote later this evening—we have had some apocalyptic language used, but apocalyptic language does not always follow through into actually voting—I will be supporting them, because we must make sure that preparations are in place for the end of the transition period. This Bill is a part of that, which is why these resolutions should pass. This Bill is also a part of ensuring that we are legally prepared for the different outcomes that could flow from the negotiations, this work in progress. We do not know what it will say, but I just want to put it on the record again that I hope we will have a deal along the free trade lines already agreed.

The Bill is also about ensuring that we have smooth continuity of business. Of the six measures, three deal with Northern Ireland and the protocol. There are colleagues in this House more focused on the detail of Northern Ireland policy than me. I just want to say that I view Northern Ireland as a really important part of the United Kingdom. I want to see the continuity of trade operate smoothly and effectively across all four parts of our United Kingdom, and I am pleased that the Government have made the obligation to the people of Northern Ireland about continued unfettered access to the UK under all circumstances.

I will not add anything further to the contributions on Northern Ireland. Those measures have been talked about in this debate already and very articulately. There are three other measures, which are reforms to the wider tax system. The most significant is the new model treatment for VAT on goods arriving into the UK from overseas. Basically, the collection of VAT will move from the existing arrangements on to the overseas seller or the online marketplace where the sale transaction occurred, making the collection of VAT easier and ensuring a more level playing field, especially for the UK high street. Businesses on every high street in the country have been having a rough time for many years, and one reason for that is the rise of internet shopping. Many businesses have a physical and digital offer—both bricks and clicks—making themselves available to customers through whichever purchase route they choose. These businesses pay VAT and will be unfairly undercut if overseas businesses are allowed to make VAT-free sales. This measure will tackle non-compliance. I understand that similar measures are in place in other parts of the world and, indeed, that the EU is introducing something similar.

The fifth measure is about tackling tax evasion in the insurance sector so that HMRC can prevent tax evasion whether an insurer is based in the UK or not—basically it is the power to issue a liability notice irrespective of location. That is part of the creation of a level playing field for UK businesses, just as the previous measure was. The last measure is very technical in nature, dealing with taxation implications from legacy state aid decisions. All I can say is that as I am glad that my right hon. Friend the Minister is on the case. This measure was perhaps designed for specialists.

Overall, the continuity of seamless trade across the UK is critical for us all. The United Kingdom Internal Market Bill has that at its core. That principle is maintained in this Bill, alongside the measures for a level playing field, which is why I shall support it.

Taxation (Post-transition Period) Bill

Andrew Jones Excerpts

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

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Yesterday in the debate on the Ways and Means resolutions, I said that I would be supporting the Bill because our country needs it. It needs it for the core purposes of the Bill, which are the smooth continuity of business after the transition period, being ready, and creating a more level playing field for UK businesses.

I recognise that leaving the EU is a field full of tough issues, but the most problematic element is the nature of our land border with it. Seeking to deliver Brexit while protecting the Good Friday agreement was the major stumbling block in our endless debates and struggles last year, so I am pleased to see progress made on that issue. We had a statement on it earlier; I will not go over trodden ground.

There are businesses in Harrogate and Knaresborough that do significant trade selling to and buying from Northern Ireland. The Bill will be welcome news for them. More people in Harrogate and Knaresborough are affected by internet shopping, either buying from or selling via online platforms. Even if people do not buy online, they are affected by the struggles on the high street. It is a tough time for retailers and, of course, high streets provide countless thousands of jobs. They are economic hubs. Our high streets and town centres also have a social function beyond an economic one. They provide a community focal point.

Before coming here, I worked in retail and for brands that sell through retail. When I talk to retailers, they say that they just want a level playing field. They are talking widely when they use that phrase, but they are talking about taxation, particularly business rates and VAT. The Bill helps to create more of a level playing field with a new model for the treatment of VAT on goods arriving in the UK from overseas. The collection moves to the overseas seller or the online marketplace where that transaction occurs. As a result, it will be easier to collect VAT and harder to avoid it. The last thing that a business having a tough time needs is for competitors to have a 20% price advantage. High street businesses and online players based here pay VAT, so if overseas businesses are allowed to make VAT-free sales, they are unfairly undercut.

I do not think the measure is controversial; it is entirely reasonable. Indeed, as I mentioned yesterday, there are moves across the world in this policy direction. I commented on the other measures in the Bill yesterday, so I will not detain the House with repetition.

The past year has obviously been one of the toughest on record in peacetime. The economic impact will be felt for many years. We also have the consequences of Brexit. The need for the continuity of business operation is profound. Our whole United Kingdom must focus on growth as we seek to protect livelihoods as we have sought to protect lives. The Bill is part of the measures being taken to secure our business future, and that is why I will support it.

Taxation (Post-transition Period) Bill

Andrew Jones Excerpts

3rd reading & 3rd reading: House of Commons
Tuesday 15th December 2020 Commons Chamber

Through all of this, the Government have seized powers for themselves—it is not about taking back control to this place, but about taking control back from civil servants in Brussels to civil servants in Whitehall. We would all be well advised to look more carefully at the powers and how the Government intend to use them.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

We have heard from my hon. Friend the Member for Stone (Sir William Cash) about the importance of the “notwithstanding” clauses and about how unelected people should not seek to overturn democratic decisions. I agree strongly that we have seen attempts to overturn democratic decisions over the past four years, and they have been a stain on the democratic history of our country. We had a vote by the British people that had to be followed through on.

I disagree with my hon. Friend about the clauses, however. Putting them back in will not be viewed as an enormously helpful measure by those negotiating a deal, especially while our Prime Minister is out trying to get a deal that we can accept. Bringing the clauses back in will not be particularly helpful for that.

The Labour party has put forward some suggestions about providing clarity for business. That is a reasonable point because, clearly, we need to provide clarity for business. I come back from a business background, and knowing the environment that one is in helps to facilitate investment decisions. However, I have to say, the Treasury knows that. I spent some time working in the Treasury, and it gets that. It does not need to be told that. It will execute the Bill in as timely a way as it can, providing all the clarity that it can. That does not need to be legislated for.

We have had delays, because people have sought to overturn—ultimately, to negate—a democratic decision. I voted to remain in the referendum, but I immediately understood that it was a vote of the British people, and that the British people are bigger than individual politicians. Only recently have some people been able to work that one out.

The measures in the Bill are about the continuity of trade across all four parts of the UK. That is something that we should all be acutely aware of, because it is bigger than any other trade deal that could possibly be discussed anywhere.

The point in the Bill about creating a more level playing field between the online and the high street worlds of retail is, again, something that I think we should all be able to support easily. Everybody, I am sure, has had representations from retailers in their constituencies about how challenging the past few years have been. Obviously the clock cannot be turned back in any way—this is about embracing the future—but we must make sure that as retailers evolve the offer of our high streets, they are able to do so with a more level playing field. That is the objective we should be seeking in our policy.

I want to see such measures enacted as soon as possible, frankly. We are in uncertain times, and I want us to get to the position in which we can offer business as much clarity as possible, as soon as possible. I will therefore be supporting not the new clauses, but the Bill as it stands.

[Wendy Chamberlain (North East Fife) (LD)]

It is a shame that the Bill has been rushed through the House so rapidly. Members have had a short amount of time in which to get to grips with a rather technical and lengthy piece of legislation. The small number of amendments tabled today speaks to the incredibly tight time limits that have been put in place. Given the impact of the legislation on businesses operating across Northern Ireland and Great Britain, that concerns me, and it should concern us all.

For me, the Bill speaks to the heart of the many contradictions of Brexit—between what was promised in 2016 and what is being delivered today. We were told that Parliament will take back control, but this Executive, peopled by the same individuals who made those promises, have arguably more contempt for the legislature than any before them. That is summed up by an incredibly depressing piece of legislation, presented a couple of weeks ago, to repeal the Fixed-term Parliaments Act 2011, which attempts to engineer the first ever return of powers from the legislature to the Executive in our history.

However, the contradictions do not end there. A case in point is clause 6 of this Bill on the uprating of fuel duty for aviation gasoline, which, for me, is a microcosm of the whole Brexit process. The whole point of Brexit was to get our sovereignty back—was it not?—so that we could finally write our own laws rather than follow bureaucratic regulations from Brussels, the sort of stiflingly dull directives with boring names such as EU energy tax directive (Council Directive 2003/96/EC). We might have thought that directive was exactly the sort of red tape we would finally cut through in Brexit Britain, and yet the Bill proves that the reality is far removed from the rhetoric, because EU energy tax directive (Council Directive 2003/96/EC), which ensures that across the EU a minimum level of tax is applied on a whole type of aircraft fuel, is in this Bill being applied across the whole of the UK.

The explanatory notes rather patriotically inform us that,

“the UK is not bound to comply with the Directive in respect of Great Britain (GB) from 1 January 2021,”

but none the less Great Britain is complying with it anyway. Does that not say a lot about Brexit and the current trade negotiations, where effectively the Government have been toying with the idea of taking maximum tariff pain now in order to allow regulatory divergence that, in all likelihood, is not going to take place?

Turning now to the amendments, I agree with amendments 1 and 2 and new clause 3, tabled in the name of the Leader of the Opposition. Economic assessments have been conspicuously lacking over the past few months, covid notwithstanding: not only a lack of assessments of the impact of any potential deal with the EU, but the refusal of the Secretary of State for International Trade to tell us whether any of the trade deals she has struck will actually leave us any better off than our current trading relationships. The other conspicuous absentee when it comes to the economic impact of all this is the Chancellor. I find it very surprising that he has said very little about the threat of no deal, during a time when the UK finds itself in the midst of its worst economic crisis.

It is entirely right that we carry out proper economic assessments of all that, not least for Northern Ireland. I remember during the election campaign last year the Prime Minister was caught on camera telling Northern Ireland businesses that,

“Northern Ireland has got a great deal. You keep free movement, you keep access to the single market”.

In the words of the Foreign Secretary, Northern Ireland has “a cracking deal” because it has access to the EU market. Meanwhile, as we teeter on the edge of no deal, we are told by the Culture Secretary that things “will be choppy”, but that “we can survive”. I am sure those words will be a comfort to many of my constituents.

Finally, I turn to new clause 1 and new clause 2. During the debate on the United Kingdom Internal Market Bill earlier, I spoke about what a disaster the notwithstanding clauses in that legislation were for the future of the UK and elsewhere. I will not repeat myself, because exactly the same applies here; all I ask is for the Minister to give a guarantee that, if there is no deal with the EU, international lawbreaking clauses will not be introduced in this or any future business. We cannot afford to let a no-deal scenario be a proxy for further actions that are hugely damaging to our international reputation. For that to be the UK’s first action once it left the EU would be a truly regrettable matter indeed.