Public Service Pensions and Judicial Offices Bill [Lords]

Debate between James Cartlidge and Robert Jenrick

2nd reading
Wednesday 5th January 2022 Commons Chamber

[James Cartlidge]

Perhaps in the days without masks it would have been easier for me to tell whether my right hon. and learned Friend was actually intervening, but he is absolutely right.

I can answer the question posed about the lifetime allowance by the Chair of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), and by the shadow Chief Secretary, the right hon. Member for Wolverhampton South East (Mr McFadden). To clarify, the legacy judicial pension scheme is unregistered for tax purposes, so the lifetime allowance tax charge does not apply to accruals under that scheme. The new judicial pension scheme, to be introduced from 1 April, will also be unregistered for tax purposes, so no lifetime allowance tax charge will apply to that scheme either. I hope that answers the question, which is a very important one.

Diversity, which was raised by several colleagues, is incredibly important. Just as in education we have been asking teachers to return to schools to help out and at the start of the pandemic the health service had many thousands of nurses and others returning to clinical roles, we are in effect doing the same. When we do that, however, we obviously cannot directly influence the diversity of the people who are returning to a profession or being retained for longer. As the Chair of the Justice Committee said, it is about reaching out to the recruits of tomorrow. We are taking many steps: for example, since 2020 we have been funding a two-year pilot programme of targeted outreach and support activity by the Judicial Appointments Commission, providing advice and guidance to potential candidates from underrepresented backgrounds, including those from BAME backgrounds, women and the disabled, and soliciting candidates for specific senior court and tribunal roles. In terms of magistracy, we will be launching a new online magistrates recruitment programme in the coming weeks to encourage applications from younger, more diverse cohorts. This is an important point.

The former shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), the shadow Chief Secretary, the right hon. Member for Wolverhampton South East, and the shadow Work and Pensions Minister, the hon. Member for Reading East, asked the important question of where the £17 billion will ultimately be coming from. The cost of the remedy is estimated to increase pension scheme liabilities by £17 billion, so it is the scheme liabilities that increase. However, that liability will be realised over many decades. It also represents a small proportion of the total savings of around £400 billion that will arise from the wider reforms to public service pensions. To be absolutely clear, the liability will fall on the Exchequer. I hope that offers clarification.

The shadow Work and Pensions Minister asked for clarity on the issues around the ceiling breaches and so on. As the Chief Secretary to the Treasury made clear in his opening speech, no member will see a reduction in their benefits as a result of the 2016 valuations. I hope that provides some reassurance to the shadow Minister. UK asset resolution schemes currently pay out benefits of about £530 million per annum; this is a cost the Government already bear. The policy creates a more efficient situation for paying these pensions and ensuring the current schemes will have a stable benefit.

The question asked by the right hon. Member for Hayes and Harlington and the shadow Work and Pensions Minister about the so-called pensions trap and the issue around the police has been raised with the Government by police representatives and we have been considering it. The Home Office is consulting on detailed regulations to implement a prospective McCloud remedy for the police pensions scheme, but the Government must not take action contrary to the intention of this Bill to remove discrimination identified by the courts by inadvertently introducing new unequal treatment and discrimination.

The hon. Member for Edinburgh West (Christine Jardine) and the shadow Chief Secretary both raised an important point about advice and guidance, and they were right. These are potentially complex issues. Perhaps one important point is that for many members this will hopefully be relatively straightforward; they will be presented with two options, one of which will be financially more generous. Hopefully, therefore, it will be relatively straightforward, but of course it is important that we provide guidance. Providing sufficient guidance for members to make informed decisions about their pensions is of the utmost importance and as such the Bill already requires that schemes provide members with remediable service statements containing personalised information about the benefits available to them. This will include details of the benefits available to them under the legacy scheme and the benefits available to them if they elect to receive new scheme benefits or choose for a period of opted-out service to be reinstated. These statements will be provided to active members on an annual basis.

The hon. Lady also raised the important issue of women and the general point about fairness. The Government agree strongly with the need to ensure that the impact of the Bill is fair on members of public service pension schemes with protected characteristics, including women. A full equalities impact assessment of the Bill was conducted and published alongside the Bill’s introduction. In addition, when making the necessary changes to their scheme rules to deliver remedy, pension schemes will carry out any appropriate equalities analysis for their specific schemes in compliance with the public sector equality duty in section 149 of the Equality Act 2010.

I am grateful for the support of the former Secretary of State, my right hon. Friend the Member for Newark (Robert Jenrick), on lifting the retirement age and, we hope, its impact on capacity issues. He put his specific point well in saying that his suggestion is the very opposite of politicisation. The Government have made their position on boycotts clear. We do not hesitate to express our disagreement with foreign nations whenever we feel that it is necessary, but we are firmly opposed to local boycotts that can damage integration and community cohesion, hinder exports, and harm foreign relations and the UK’s economic and international security. Local authorities should not undertake boycotts that could undermine foreign policy, which is a matter for the UK Government alone. The Government therefore remain committed to our manifesto pledge to ban public bodies from imposing their own boycotts, disinvestment or sanction campaigns, and we will legislate as soon as parliamentary time allows.

[Robert Jenrick]

I am grateful to my hon. Friend for his remarks. He has just said that the Government will legislate as possible; this is the opportunity to legislate. Of course, there might be a BDS Bill at some point later in the Parliament—we do not know; there will always be pressures on the legislative timeframe—but even if there were, this is the appropriate Bill to handle the situation, because the issue arose in the 2013 Act, to which this Bill is essentially the successor. I do not expect my hon. Friend to make a commitment here at the Dispatch Box—it is clearly something that we will all have to consider in the weeks ahead—but this is the moment at which to make the amendment, should the Government wish to do so in this Parliament.

[James Cartlidge]

I am grateful to my right hon. Friend. As he knows, matters of parliamentary business are above my pay grade—a very humble and new one—but I hear his point, and I think he made it very well. I am sure that he has a great deal of sympathy for our position, and I simply repeat that we will legislate when parliamentary time allows.

Let me finally refer to the points made by the Chair of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst, and the former Lord Chancellor, my right hon. and learned Friend the Member for South Swindon, about the independence of the judiciary. They are right: this Bill, including the important parts that deal with the judiciary—I make no apologies, as a Justice Minister, for focusing on those in the winding-up speech, not least given all the backlog issues—sends a powerful signal about our support for the judiciary. I believe that the independence of the judiciary is part of the competitiveness of the United Kingdom. The reason people buy our insurance in the City or trade with our banks and our service sector is that they trust this country, and they trust us because they trust the contract and they trust English law, and we should all be very proud of that.

On the basis of the contributions made today, I believe that the House agrees with the principles underpinning the Bill. I am grateful for the support of the shadow Chief Secretary and the Labour party, and indeed for that of the Liberal Democrats and other parties. I think we all agree that we must make certain that those who deliver our valued public services continue to receive guaranteed benefits on retirement on a fair and equal basis, and in a way that ensures that pensions are affordable and sustainable, and that we must also support our world-class judiciary to enable it to meet the demands of the present day and of the future. I extend an invitation to all Members who may wish to discuss these issues further with me and with the Chief Secretary before the Committee stage. I look forward to that further discussion, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Public Service Pensions and Judicial Offices Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Public Service Pensions and Judicial Offices Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 1 February 2022.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Michael Tomlinson.)

Question agreed to.

Public Service Pensions and Judicial Offices Bill [Lords] (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Service Pensions and Judicial Offices Bill [Lords], it is expedient to authorise:

(1) the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by a Minister of the Crown or a government department; and

(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided; and

(2) the charging on, and paying out of, the Consolidated Fund of any sum payable under or by virtue of the Act to or in respect of the judiciary.—(Michael Tomlinson.)

Question agreed to.

Public Service Pensions and Judicial Offices Bill [Lords] (Ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Service Pensions and Judicial Offices Bill [Lords], it is expedient to authorise:

(1) the making of provision under the Act in relation to income tax, capital gains tax, corporation tax, inheritance tax, stamp duty, stamp duty reserve tax or stamp duty land tax in connection with—

(a) pension schemes established under provision made under the Act for persons who are or have been members of occupational pension schemes of bodies that were brought into public ownership under the Banking (Special Provisions) Act 2008, or

(b) the transfer under provision made under the Act of any property, rights or liabilities of any such occupational pension scheme or any such body; and

(2) the payment of sums into the Consolidated Fund.—(Michael Tomlinson.)

Question agreed to.

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill (Second sitting)

Debate between James Cartlidge and Robert Jenrick

Tuesday 14th May 2019 Public Bill Committees

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

It is a pleasure to return this afternoon, following my grilling by members of the Committee this morning, to explain the clauses in the Bill, starting—as you said, Sir Henry—with clauses 1 and 2. Before I respond to the hon. Members who have tabled new clauses 1 and 4, it may help the Committee if I begin by explaining some of the background to clauses 1 and 2. My apologies for repeating some of what I said this morning in answer to questions from members of the Committee.

The Office of Tax Simplification, or OTS, stated during its 2013-14 review of the tax and national insurance contributions treatment of these payments that

“the well-advised can often end up better off than the unadvised, as they are more able to structure their employment contract (or, indeed, their termination payment) to achieve the better tax treatment.”

One reason why businesses had an incentive to do so was the absence of any employer’s national insurance on termination awards of any size. My officials and I outlined some examples of that this morning during questions, which I think was supported by the interesting evidence from Bill Dodwell of the OTS.

Following that report from the OTS, the Government announced in the 2015 summer Budget that they would consult on simplifying the tax and NICs treatment of termination awards. We consulted openly and widely on that policy, receiving responses from 100 stakeholder groups and nine individuals, covering tax experts, law firms, trade unions, business groups and individual businesses. We also held several meetings with stakeholders to discuss their views on our draft proposals. Following that, in the 2016 Budget, we confirmed that we would be taking forward reforms to the tax and NICs treatment of termination awards, and shortly afterwards published draft legislation for consultation.

The income tax measures announced in the 2016 Budget were legislated for in the Finance (No. 2) Act 2017 and took effect from April 2018. The Government then reconfirmed in the 2018 Budget that the associated reforms to NICs legislation would be in place for April 2020. The reforms made by clauses 1 and 2 have therefore been properly consulted on, tested with stakeholders of all kinds and debated by Parliament—both during the process of this Bill and, more particularly, through the passage of the Finance (No. 2) Act. They have also been widely expected by stakeholders for many years.

I now turn to the changes made by clauses 1 and 2. It is important to note that the reforms we are discussing today are the second part of a package of changes, some of which have, as I said, already been approved through the Finance (No. 2) Act and took effect in April 2018. The tax rules for termination awards that existed before the reforms introduced by the Finance Act (No.2) 2017 were unclear and unnecessarily complicated. Some awards were taxed as earnings, others were taxed only above £30,000, while others were completely free of tax and national insurance contributions. That complexity left the system open to a degree of manipulation that we heard evidence about this morning. The Finance Act (No.2) 2017 tightened the rules on what element of an award is taxed as earnings. From 6 April 2018, the NICs liability was more closely aligned with the tax treatment, so that those amounts taxed as earnings became liable for employer and employee class 1 NICs.

Termination awards that are not earnings are currently charged to income tax on amounts that exceed £30,000, and they are entirely exempt from employee and employer national insurance contributions. Allowing the difference between the income tax treatment of that income and the employer national insurance treatment to persist would be confusing, and continue to provide an incentive for employers to manipulate final payments to achieve a tax advantage.

The clause will close that loophole, simplify the tax system, and raise about £200 million in revenue to continue to support the funding of public services in a significant way. Clause 1, which applies to Great Britain, achieves that purpose by ensuring that where an income liability arises on termination awards above £30,000, there will be a corresponding liability to employer class 1A national insurance contributions.

[James Cartlidge (South Suffolk) (Con)]

On Second Reading, not much attention was given to employee benefits. How do they fit into that threshold?

[Robert Jenrick]

If my hon. Friend is referring to the benefits system, that is completely unrelated. Contractual benefits are liable to a tax liability in addition to that—perhaps I can provide more information on that in a moment. They will be part of taxable income taken in the round, which once generated is then subject to income tax and the employer’s national insurance contribution in the final termination payment.

The effect of the change will mean that a 13.8% class 1A secondary employer’s NICs charge will be applied to income derived from a termination award that is already subject to income tax. In addition, clause 1 also includes other modifications to existing legislation that relates to employer class 1A NICs, to ensure that the new liability for termination awards works as intended. Clause 2 makes corresponding changes for Northern Ireland, ensuring that the provisions apply across the United Kingdom.

Before I address new clauses 1 and 4, let me say a few words about what clauses 1 and 2 do not do. First, they do not introduce a NICs liability on the employee—I hope we made that clear during questions this morning. There remains an unlimited employee national insurance charge exemption on termination awards. Although there is a principled case for greater simplification and alignment by applying employee NICs to that income, the Government have listened carefully to representations made during the consultation, and we believe that our approach strikes the right balance between delivering greater simplification for employers, and fairness to individuals who are undoubtedly in a difficult period of their lives: losing their jobs and having to make the necessary adjustments.

Secondly, the clauses do not reduce or seek new powers to change the existing £30,000 threshold, below which termination awards are entirely tax-free and NICs-free. As we discussed this morning, that threshold remains generous compared with those of many other countries, including the United States and Germany, which tax income linked to a termination from the very first pound. It will ensure that about 80% of awards are unaffected by clauses 1 and 2, and that awards made as statutory redundancy pay are untouched. We have no plans to lower the threshold in future. Any future Government who wished to do so would need parliamentary approval.

--- Later in debate ---

[Robert Jenrick]

My hon. Friend makes an important point. Statutory redundancy pay is £15,000, so for these purposes, £30,000 appears generous. I have already made the international comparisons. It is also important to point out that there are a number of exemptions altogether, for discrimination, physical harm, disability and so on, set out in other areas of legislation to ensure that those who are particularly vulnerable and deserving are protected when it comes to the payment they receive for their injuries.

I will briefly discuss the amendments that would be made to the Bill if new clauses 1 and 4 were accepted. New clause 1, tabled by the hon. Member for Aberdeen North, seeks to require the Government to produce a report on the impact of class 1A NICs on termination awards. Furthermore, it specifies that the report must contain

“an assessment of the expected impact”

of the changes in certain respects, which I will not list here but which are available in the Bill documents. New clause 4, tabled by the right hon. Member for Hayes and Harlington (John McDonnell) and the hon. Members for Bootle, for Oxford East, for Stalybridge and Hyde (Jonathan Reynolds) and for Manchester, Withington from the official Opposition, also asks the Government to report on several similar issues to those covered in new clause 1.

The new clauses are unnecessary because they seek to force the Government to report on a narrowly prescribed set of issues, most of which have been considered during the detailed consultation that has already been completed and that I have outlined, ahead of new information becoming available. The Government are already committed to reviewing the measures and being transparent about the impact that they are expected to have.

It is worth giving Committee members a little more detail on these issues. First, the Government do not deem it appropriate to conduct reports that have been very narrowly constructed. A report focused exclusively on one aspect of the Government’s reforms to termination payments—the distribution analysis, for example—would miss other important aspects such as the impact on the levels of tax avoidance or the funding of public services.

[James Cartlidge]

My hon. Friend is making an excellent point. Does he agree that we should look at the impact on job creation and the ability of employers to create jobs, particularly on the day we learned that unemployment is at the lowest level of my entire lifetime? I was born in 1974.

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill

Debate between James Cartlidge and Robert Jenrick

2nd reading: House of Commons & Ways and Means resolution: House of Commons
Tuesday 30th April 2019 Commons Chamber

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I beg to move, That the Bill be now read a Second time.

This is a small and narrowly drawn, but nonetheless important, Bill. It aims to provide a welcome simplification of the tax treatment of termination awards and sporting testimonials. The corresponding rules determining the income tax treatment of termination awards and sporting testimonials were legislated for in the Finance Acts of 2016 and 2017. At that time, it was made clear that we would return and replicate those rules in national insurance legislation in due course, to ensure that there was not a persistent misalignment. Implementation of the measures in this Bill will replicate those rules in national insurance legislation. By the nature of national insurance, it is required to have a separate piece of legislation from the Finance Bill.

These measures were first announced at Budget 2015. They were then consulted on and published in draft in December 2016. They were subsequently reconfirmed at Budget 2018, so it is reasonable to say that they are expected by those affected and have been subject to much scrutiny. Together, they mean that a 13.8% class 1A employer national insurance charge will be applied to income derived from termination awards and sporting testimonials that are already subject to income tax.

Let me first set out the measure that covers termination awards. Between 2013 and 2014, the Office of Tax Simplification reviewed the tax treatment of employee benefits and expenses. The OTS published an interim report in August 2013 identifying termination awards as one of a number of priority areas. It found that relatively few employers and employees properly understood the regime. There was confusion, and the regime was therefore ripe for reform and simplification.

The OTS specifically identified three areas of misunderstanding on which it recommended we take action. First, certain forms of termination awards are exempt from employee and employer national insurance contributions and the first £30,000 is free from income tax. However, there is a common misconception that the first £30,000 of any termination payment is automatically tax free. Secondly, many employers believe that this exemption applies where in fact it does not, and thirdly, employers are unaware of the different income tax and national insurance treatment of termination payments.

Following the OTS recommendations, the Government announced at Budget 2016 that they would be reforming the tax and national insurance treatment of termination awards. As I said, the reforms to the income tax treatment of termination awards were legislated for in the Finance (No. 2) Act 2017 and took effect from April 2018. The Government confirmed at Budget 2018 that the associated reforms to national insurance legislation would be in place for April 2020. However, the fact that termination awards are currently subject to different income tax and national insurance treatment has created confusion, and that is what we are attempting to deal with today. Moreover, the current misalignment incentivises an admittedly small number of well-advised employers to disguise final payments as compensatory termination awards that benefit from a national insurance charge exemption. These reforms will close that loophole.

The Bill will place a 13.8% class 1A employer national insurance charge on income derived from termination awards on amounts over £30,000. However, I want to assure hon. Members that, when it comes to employee national insurance, these payments will remain entirely exempt. We have chosen to continue to ensure that employees will not face any additional liability as a result of these changes in terms of employee national insurance. This measure will raise around £200 million per annum for the Exchequer, which will make an important contribution to our public services. As this is a Budget measure, this sum has already been reflected by the Office for Budget Responsibility in its projection for the public finances.

Let me turn to the second measure in the Bill, which deals with aligning the employer class 1A national insurance treatment of income from sporting testimonials with the income tax treatment. As many hon. Members will be aware, a sporting testimonial is a one-off event—or series of related events—held on behalf of sportspeople who have played for a certain club for a long time. This often takes the form of an exhibition match involving famous players from the past and present. The testimonial can be used to raise money for the sportsperson before retirement, or sometimes to raise money for charity. The relevant income tax changes were debated and came into force from April 2017. As stated at the time of the Finance Bill—later the Finance Act 2016—the rules governing sporting testimonials are now changing to give clarity to the national insurance treatment as well.

Currently, when a sporting testimonial is non-contractual or non-customary, it can be organised by a third party, rather than the club or employer, to raise money without it being subject to NICs. Where the employer arranges the testimonial, or if it is part of the contract, or if there was an expectation that the sportsperson would be entitled to one, the testimonial is already subject to income tax and NICs.

[James Cartlidge (South Suffolk) (Con)]

Is there a sense of how common it is for a testimonial to be contractual? We all know that it is commonplace in cricket and football for players to have testimonials or similar events, so one assumes that most of them are contractual.

[Robert Jenrick]

My hon. Friend makes a good point, and our analysis is the same. Last year, only around 220 sporting testimonials of any kind took place in the United Kingdom, and a large number will have been contractual. Certainly, the highest-profile ones, such as those of premiership footballers or leading cricketers for significant county clubs, are usually contractual. As I will go on to say, because the measure has a one-off £100,000 threshold during the career of the sportsperson, a large number of those 220 testimonials will fall below the threshold. Less high-profile sportspeople, who will perhaps have lower earnings, are likely to be within the threshold. We are talking about a small number of relevant testimonials and, as hon. Members will see in the Bill’s accompanying documents, the measure will raise a negligible sum. Our motivation is primarily the simplification of the tax system and the avoidance of doubt for sportspeople and those advising them, rather than to increase revenue materially.

Flexible Ticketing: Rail Transport

Debate between James Cartlidge and Robert Jenrick

Thursday 10th March 2016 Commons Chamber

[James Cartlidge]

My hon. Friend makes an excellent point. I will talk about technology later in my remarks.

Another email that hits on some other points is from Russell Badrick, a solicitor who works in London but lives in Nayland, a beautiful village on the Suffolk-Essex border by the river Stour. He says:

“I was born in the constituency, and have recently moved down the road from you, to Nayland. I am a commuter and work in London. I work from home one day a week, and I commute the other four days.

You no doubt must receive a great many messages complaining about the Abellio Greater Anglia Services, which are generally very poor. The notion that they might be nationalised is obviously crazy”—

he is clearly sound. He continues:

“I wanted to ask you if anything was being done to persuade Abellio to introduce flexible tickets? It is becoming increasingly common for people to work from home, yet we are still forced to pay the season tickets for the entire week, month or year. For me, that means paying for 365 days of travel, when in fact I only travel on 208 of these. In fact, when holidays are discounted, I only travel 192 days a year.

On the basis of me paying £5,520 a year (i.e. 15.12 a day), this means I am really overpaying for 173 days a year – i.e. a full £2615.76 – again, obviously crazy.

I appreciate this is a business decision on the part of Abellio, but in this situation I, like many of your constituents, are captive consumers. Can anything be done about this?”

I should add as a caveat that while he talks about £2,615.76, Members—especially my hon. Friend the Member for South Thanet (Craig Mackinlay), who I believe is an accountant—will know that that is taxed income, so the real figure is far more than that.

[Robert Jenrick (Newark) (Con)]

My hon. Friend makes a compelling case. We all know that there is a commuter belt around London and other major towns and cities, but there is a huge economic opportunity for towns and communities just beyond that, from where commuting into a great city full of opportunities, such as London, is possible one or two days a week, but is onerous five days a week. In my constituency, there are 500 people with daily commuter season tickets from Newark to London, but it is very tiring to make that journey every day of the week and most of those individuals do it only one, two or three days a week. Does my hon. Friend agree that we want people to have these opportunities because that brings wealth and new opportunities for fulfilling careers into a whole belt an hour or more further north, south, east and west of London?

[James Cartlidge]

My hon. Friend makes an excellent point. When I had the pleasure of campaigning in his by-election, I remarked that I was in a beautiful part of his constituency.

Before turning to the points made by my commuting constituents, I want to set the context of South Suffolk. In many ways, it fits the pattern described by my hon. Friend. The key to its beauty is that although we are not that far from London in commuting terms, we really feel like we are in East Anglia. There are many beautiful counties in the south-east, but people feel the pull of the M25 and of London. Once they get to South Suffolk, they feel as though they are in a different part of the country. The area has beautiful ancient villages such as Lavenham and Long Melford, which are famous and attract many tourists. Nevertheless, from Colchester, which is an 18-minute drive from my village, we can take the express train and get to Liverpool Street in 47 minutes. Although we are a long way from London in one respect, we are certainly well within commuting distance.

--- Later in debate ---

[James Cartlidge]

That is an excellent point. Recent Office for National Statistics data show that between April and June 2015, just over 7.3 million people had a flexible working pattern. By the way, that is people who are employed; it does not include the army of people such as self-employed contractors who go into London a few days a week. We have a flexible labour market and flexible working, but our rail ticketing system is, in effect, stuck in the same Julian calendar that we have had since 46 BC. If that sounds like a long time, hon. Members should wait until they get stuck on a delayed service out of Liverpool Street.

Russell from Nayland made an important point about bad value for money:

“On the basis of me paying £5520 a year…this means I am really overpaying for 173 days a year”

of travel, which is an extraordinary statistic. That means that he is, in reality, paying £2,615.76 or, depending on his tax bracket—if he is a solicitor, I suspect it is 40%—£4,000 or more for those 173 days. That is a big deal, particularly in our region, because an extensive survey recently undertaken by Transport Focus found that just 21% of the commuters on Abellio Greater Anglia were satisfied that their ticket was value for money, compared with 34% on other lines. I realise that I may end up in a competition with hon. Members in the Chamber about whose line has fewer happy customers, but there is no doubt that value for money is a big concern.

It is fair to say that if there was more satisfaction with value for money in general, the issue of part-time tickets would not actually feature. I get these emails because people feel frustrated that they look hard at what they are getting and think, “Hold on a minute. I’m paying for Saturday, Sunday and Friday.”

[Robert Jenrick]

Perhaps I could add another point. When we think of those who commute into central London, we tend to think they are on higher incomes, but that is not always the case. I have many constituents who commute into London, but also some who commute into Nottingham and Derby, and some of them might be on very low incomes. The average wage in my constituency is £23,000 a year, and commuting costs, even from Nottingham to Derby, certainly eat into that. One group that came to me recently was made up of apprentices; they do not go to work every day of the week, because, in many cases, they will be doing courses at the local college. They might want to go to Newark College, which they can walk to, one day a week, and do three or four days a week at Rolls-Royce in Derby. A full-time season ticket will eat into their quite modest incomes.

[James Cartlidge]

Another excellent point.

What is to be done? To go back to my constituents, Deborah suggested this:

“A system whereby a commuter could, say, buy 10 day returns for the price of 6-7 would really encourage the flexibility that the modern work force needs when juggling work and family life.”

There is a word for what she proposes—it is “carnet”—and I must confess that, when I lived in Barnet, I used a carnet. [Laughter.]

--- Later in debate ---

[James Cartlidge]

I thank my hon. Friend for her intervention. She has reminded me that I should add, for the record, that I have only one station, Sudbury, in my constituency. The Sudbury line goes to Marks Tey, where it joins the main line. Apart from Sudbury, all the stations on that line are in Essex. Many of my constituents go to Manningtree, Colchester or Ipswich, which is on the main line into London. I am sure that even though my hon. Friend has no station in her constituency, many of her constituents are rail commuters who travel to stations nearby.

I have a few specific questions for the Minister. In a situation like that of Anglia, where we have a live franchise bidding process, to what extent can we still influence that? Given the interest in flexible ticketing, to what extent could the Department for Transport go back to the bidders and ask them to push for better flexible ticketing solutions? Another hon. Member, who could not make it today, asked me how he could get involved with the South West franchise, which is coming up for renewal soon. I suspect other hon. Members will want to do likewise.

On technology, I was struck by the point about the use of smartphones on Oyster. To what extent is smartphone-based ticketing possible with the SEFT system, and how soon could that come about—if, indeed, it is not already coming about through testing?

Finally—I believe that this is unique to my region; certainly, I do not think it applies to other Members who are here—there are live discussions about a combined authority between Suffolk, Norfolk and Cambridgeshire. That is a major step for our part of the world. What powers does the Minister think might be given to an elected mayor or combined authority in relation to ticketing, flexibility and so on? That is a classic example of the sorts of powers they should have.

On cost, I am a businessman by background and a Conservative, so I am well aware that money does not grow on trees, and that if we suggest policies we have to be responsible and explain where the money will come from. As my hon. Friend the Member for South Thanet said, I think that more flexible ticketing will pay for itself, to a certain extent. It will entice a certain type of skilled person—someone who has become a full-time mum, for example—back into the workplace because they can commute a few days a week. That will suit their living pattern and their work-life balance. In other words, it will bring new revenue to the companies, so I think they should embrace it and be bold about it.

The other point I would make is that if rail companies would lose a lot of money by introducing part-time tickets, that tells us that they are basing their business model on something that is not sustainable or, dare I say it, even fair. The idea that profits are based on people paying for millions of days that they never use and phantom journeys that they will never take seems quite incredible.

[Robert Jenrick]

My hon. Friend is being generous in allowing interventions. As other hon. Members have said, there is a huge economic opportunity for rail companies to create a whole new generation—a wave—of commuters beyond the classic 50-mile commuter belt and spread those opportunities another 50 miles or 100 miles outside London. That is a massive financial opportunity for train companies that they will have to harness over the next 10 or 20 years as London becomes an increasingly expensive place to live and commuters look not just to the classic commuter belt, but as far as my constituency in the north midlands.

[James Cartlidge]

That is the key point. The rail companies really need to embrace that as a positive opportunity to strengthen their revenues and build a new customer base.

The Government need to see the big picture in terms of the wider economy. There is no doubt that this country’s long-standing economic failing has been, and continues to be, relatively low productivity compared with other European nations. However, one of our big assets is our flexible labour force. Every part of our country, our key infrastructure and the way in which we interact with that infrastructure should reflect the fact that we have a flexible labour market and a mobile workforce. That will maximise productivity, and it will ensure prosperity and a better work-life balance for years to come. I say to my hon. Friend the Minister that in the era of flexi-time, we need flexi-fares.