Oral Answers to Questions

Debate between Jesse Norman and Andrew Jones

Thursday 20th April 2023 Commons Chamber

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

10. What assessment he has made of the availability of apprenticeships in the transport sector.

[The Minister of State, Department for Transport (Jesse Norman)]

I congratulate my hon. Friend on the brilliant work he has done on apprenticeships in Harrogate and Knaresborough over the last few years. I note that some 12,430 new apprenticeships have been created there since 2010. As he knows, the Department is committed to working with the transport industry to create high-quality apprenticeships so that the sector has the skilled workforce it needs. I work closely with the transport employment and skills taskforce to see what we can do to promote apprenticeships still further in the industry.

[Andrew Jones]

I thank my right hon. Friend for that answer. I have been meeting representatives of bus companies that run apprenticeship schemes. They tell me that the rules governing the number of hours per month in the classroom can be problematic for smaller companies when it comes to rostering, and that if there was some flexibility—a change not in the total number of hours, but in the delivery pattern—they would be able to take on more apprenticeships, which they want to do. Will he consider that idea?

[Jesse Norman]

As my hon. Friend knows, the Department for Education published fresh guidance last year on how apprenticeship training can be delivered flexibly to fit business needs. My hon. Friend the Member for North West Durham (Mr Holden), the Roads Minister, has been to talk to him and, I believe, has visited the classroom in Harrogate with him, so he can take it from us that we are very much seized of the issue of flexibility and the importance of improving it.

Finance Bill (Fifth sitting)

Debate between Jesse Norman and Andrew Jones

Committee stage & Committee Debate: 5th sitting: House of Commons
Thursday 11th June 2020 Public Bill Committees

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

I am also not usually somebody who likes to find new ways to tax people in the UK. The digital services tax is totally new, but it is the right thing to do. The clauses detail the scope and the mechanisms for the tax and its collection. We even have a clause with an algebraic formula, which should certainly raise an eyebrow. [Laughter.]

The main thing to note is that the economy is changing fast and the tax is a part of that change. The Government’s response is to work internationally as we plot the course to a digital economy. Such economies are by definition international, so it is right to respond in a multinational way. I also know that it is very hard and takes a long time to achieve the objectives, so it is clearly right to proceed in the short term with this measure. Digital firms must pay their fair share.

It is increasingly hard for Governments to raise revenue from their traditional routes. The Government obviously have to raise revenue to fund the public services that we want. There is therefore an underlying, fundamental challenge for the Treasury. Work and consumption patterns change. I recognise that I possibly view this through the prism of somebody who has had responsibility for raising Government revenue—once a Treasury Minister, always a Treasury Minister—but this tax and the thinking behind it are the shape of things to come. Tax has to evolve to reflect the way the economy evolves.

The rise of the digital economy means different things for different companies. The opportunities for productivity and environmental gains are absolutely immense, so we must do all that we can to encourage the shift into a digital economy. Most people encounter it through social media search engines and online retail, which are the target areas for the tax. The growth of online retail has placed ever greater pressure on traditional high street retail businesses: a trend compounded, as colleagues have said, by the current crisis.

There have been concerns about the nature of competition and whether there has been a level playing field between online and offline: the argument between bricks and clicks. We should make every effort to level the playing field and the tax is a part of that. High streets have a role beyond their traditional economic role. They have a social role and bring people together. They create hubs for communities, but they also have to evolve to reflect the changing nature of competition, and a more level playing field in taxation will help give them the space to evolve.

I had some concerns that the tax may discourage digital start-ups; we have seen a good period for start-ups in the UK and I think that we have led Europe in this sector. However, I think those concerns have been dealt with by the threshold at which the tax becomes payable, which will only capture the very largest of businesses.

So, we have a very interesting new area for taxation, which I do not think any Government can enter into lightly. The Minister is an old friend—we have worked together for many years—and I commend him, because this is not easy stuff; it is pioneering for the UK and indeed for the world. But we have found a way forward that updates our taxation system and introduces more fairness to it, and through the operation of the new system we will learn how future taxation may work. So, as we go through further clauses in detail today, perhaps he could comment on how any learnings from this tax might influence and develop future taxation thinking.

[Jesse Norman]

All I can say to my colleagues on the Government Benches who have made their speeches is,

“soft, what light through yonder window breaks? It is the east”—

and my hon. Friends the Members for South Cambridgeshire, and for Harrogate and Knaresborough. What could be finer? I thank them very much for their interventions. If I may, I will start by responding to those interventions and then come on to the very detailed thrust of commentary from the shadow Chief Secretary.

My hon. Friend the Member for South Cambridgeshire rightly made the point that taxes are, of their nature, potentially distortive, and revenue taxes, of their nature, in particular. It is therefore appropriate to proceed with a degree of caution in considering how to introduce a tax, and to acknowledge that. He also made the point that many taxes start modestly. I could not possibly comment on the future direction of this tax, but I will say that I do not think that £2 billion is a trivial sum of money to raise from a new tax. I think the tax has been set at an appropriate level, and officials and the Government believe that, too.

My hon. Friend also asked whether businesses affected by the tax will have to collect a vast array of new information, and whether that may be burdensome to them. This is one area where, on reflection, he may be able to take a degree of comfort, because we are only talking about very large businesses, and about businesses for whom tracking users and extracting revenue from them is what they do for a living. So, it is not our expectation that there should be any enormous additional informational burden; there may be a selection process of pulling information out, but not an enormous informational burden.

I will also point out that the approach taken is one of self-assessment, which is to say that we expect businesses that have UK user-generated content revenue to come forward and self-assess. In a way, that relates to the question put by the hon. Member for Houghton and Sunderland South about whether HMRC has enough resources. I am pleased to tell her that it already has a digital team in place, whose job is to monitor this process of self-assessment. And as with other taxes, I have no doubt that they will become increasingly expert in doing that and evaluating the submissions that are made; of course, submissions will vary in their quality and I am sure that evaluating them will be, in turn, an educative process for tax officials at HMRC.

My hon. Friend the Member for Harrogate and Knaresborough, a beloved former Treasury Minister, made a couple of important points. Of course, he is absolutely right that we are talking about a dynamic market or sector. All markets are intrinsically dynamic and we are talking about an intrinsically highly dynamic sector of activity, perhaps never more so than at this particular moment in our history, when we are seeking—internationally and nationally—to find a whole range of new solutions to support people and maintain the economy. So, it is a very dynamic sector.

My hon. Friend is also right to highlight—in a way entirely unscripted and unprepared with me—the “pioneering” nature of this tax. It is a new form of tax, which seeks to tax UK user-generated content. Therefore, it is an important démarche in our history to consider whether this is an appropriate way in which to tax. I believe it is, and I believe that Parliament will think it is, but we will of course continue to review and take feedback on it. I point out that there have been two sets of consultations on this already—an original, principal set and then a more technical one.

--- Later in debate ---

[Jesse Norman]

That is, of course, a proper question to ask, but we have taken the view that this is a tax that we would like to take off the books in due course, when there is an OECD agreement. That agreement may take a variety of different forms; it may raise more tax or less. Different countries have different overall tax systems and seek to address different forms of corporate behaviour in deriving revenue. In the UK, there are plenty of businesses deriving revenue from user-generated content. Some of them will be over the thresholds that we are talking about, and those are the ones that are within the scope of the tax.

It is absolutely open to other parties to disagree about how they would put it, but the Government have taken the view that this is the appropriate level for a new tax—it is on revenue and, as I have said, is therefore potentially distortive. We have had feedback and consultations that reflect concerns on both sides of the issue.

[Andrew Jones]

My right hon. Friend makes a valuable point about the multi-channel operations of many retailers. I came to Parliament from a business background that had a mixture of high street and online retailers. From a business perspective, the key thing is to reach customers in the way that is right for them. By choosing either the high street or online, businesses miss out. Customers are open to trading in whichever way is convenient for them, as this crisis has shown.

I want to make a comment about the taxation. Higher taxation rates do not necessarily mean higher tax collected. We also have to recognise that having a tax environment that is conducive to creating a business-friendly environment is a critical part of the economic growth that we have seen over the past few years. We should certainly be looking around the world to see how other countries operate their tax systems, but drawing comparisons with countries that are not creating wealth or jobs might not be the way forward.

[Jesse Norman]

I thank my hon. Friend for that comment. In a way, he leads me on to my next remarks in response to the hon. Member for Streatham. He is right. The dynamic market that we are seeking to tax is one where revenues are not absolutely predictable; they may be higher or lower than estimated. The tax therefore stands in contrast to a well-established tax such as VAT, because we can be much more certain about how much that tax will raise.

It is also important to understand that this is not a tax designed to penalise certain companies. The strength of our online sector in the UK has been a very important part of the response to coronavirus, as I have mentioned. There is no attempt to pick out companies and target them with the tax. There is a concern about failings in the international tax rules, and that is what the Government seek to address.

The hon. Member for Houghton and Sunderland South raised the issue of multilateral action and asked whether adequate leadership had been exercised. It has been recognised that the OECD has made some good progress in this area recently, which has been achieved with a lot of urging and support from this country. Ultimately, we all agree that international and corporate tax needs to be addressed in a global and inclusive way. That would be the Government’s strong preference, but we have not waited—I do not think the hon. Lady would want us to wait—because we think it is important to take a lead.

It is also important to say that when we have done that, we have tried—as one might expect with a new tax—to target an area where there is a very clear rationale or justification for the tax that is being levied. UK user-generated content is a strong basis on which to levy a tax. There is a contrast with, for example, media streaming. The hon. Lady talks about how much she has enjoyed various media streaming services, and I welcome that, but we can all be relatively certain that she has not contributed a lot of UK user content to them—[Interruption.] Unless delight and shock are forms of UK-generated content.

I want to reassure the hon. Lady a bit about the apportionment of revenue. She is absolutely right that, as the history of base erosion and profit shifting around the world shows, many companies have found it only too easy to move the effective location where tax is generated. In part, this tax, by taxing revenue overall, is designed to sidestep a lot of the temptations that might exist to work round the edges. A very wide definition of revenue has been adopted, and we can go into that in more detail. As I said earlier, we require companies to do it. It is a self-assessment scheme, and we ask companies to designate, evidence and disclose the UK user-generated revenue of the different kinds that we have touched on.

On GDPR, which is the relative question, the legislation has been written so that businesses are expected to use information that they already have to make the determination. We believe that it is compatible with GDPR, and that it draws on data that is already collected. We are not inviting the groups to collect new information that might be in some sense at odds with people’s rights or in contravention of the law, and of course they will have their own GDPR processes to follow. As I have said, many of them collect a great deal of information, including IP addresses, delivery addresses, billing addresses and so on. To come to a point that the hon. Lady made earlier, that is another reason why the use of virtual private networks is more of an in-principle worry than an actual worry, because famously, so much other information is collected about the users of those services from multiple sources. That should help them to make those disclosures.

The hon. Lady asked about double taxation. It is true that some businesses will pay both UK corporation tax and the digital services tax. For reasons of international law, we are not capable in law of discriminating in favour of UK businesses, and we are not going to. The point, though, is to design a proportionate tax with a low rate, and another reason why we have chosen that rate is that we do not wish to be any more distortive or invoke any more double taxation than is absolutely necessary. As I said, our preference is to move to a global solution.

The hon. Lady talked about international leadership. We look forward to a day when the OECD will be able to pass an agreed set of rules with multinational support that give a proper basis for the levying of tax. As she is aware, a number of proposals are under discussion. They and the processes that generated them are well described in the House of Commons Library note, and I encourage any Members who want more detail to look at that. The Government are clear that we will maintain this tax until the OECD passage of agreement—there may be other supervening factors—causes us to remove it. I commend the clause to the Committee.

Question put and agreed to.

Clause 38 accordingly ordered to stand part of the Bill.

Clauses 39 to 44 ordered to stand part of the Bill.

Clause 45

Meaning of “the threshold conditions”

HMRC Impact Analysis: Customs

Debate between Jesse Norman and Andrew Jones

Tuesday 8th October 2019 Commons Chamber

[Jesse Norman]

I cannot match the right hon. Gentleman on verbal wit. What I can say is that the Government have published estimates of the impact of a no-deal Brexit in different forms, and we continue to believe that it is vastly in the interests of this country, this House and all our constituents to leave with a deal. I hope that the right hon. Gentleman will support that.

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

Does my hon. Friend agree that it is critical for the UK to have an attractive regulatory regime as part of delivering the overall international competitiveness of the economy, and that he will do all he can to minimise the administrative burdens on business?

[Jesse Norman]

My hon. Friend is absolutely right. I think that in due course it will come to be seen that Brexit was a moment of change in which we moved ourselves to a global position in which we were able to change many of the rules and regulations governing our international and domestic trade for the better—to make them more streamlined, to lighten the burden and to increase our economic efficiency and productivity.

Northern Rail Timetable Changes

Debate between Jesse Norman and Andrew Jones

Thursday 24th May 2018 Commons Chamber

[Jesse Norman]

My hon. Friend neatly segues me on to my next topic. His point is well landed and well taken account of, and it will undoubtedly feed back to colleagues and officials, but as he will be aware, it does not require a PhD in cryptology or the detective skills of a Sherlock Holmes to realise that I am the Roads Minister and therefore will not be giving direct instructions to officials in this regard. Nevertheless, I shall ensure that due regard is taken of the point that he raises, and rightly so. For that reason, I may be a little less crisp on the detail than some of my colleagues on the rail side would be, but I assure all Members that their considerations will be heard and taken account of.

As my hon. Friend the Member for Hazel Grove will know, Northern is now running hundreds more services compared with last week. Clearly, there is an upside to this situation as well as a downside. By 2020, there will be more than 2,500 extra services a week with room for 40,000 extra passengers, and these will be, by and large, faster and more comfortable journeys, with new and direct services across the north and beyond. Indeed, this week’s timetable change, although we have properly and appropriately focused on the negative feedback that has occurred, has also been one that has delivered an extra 1,682 train services a week across the network.

As I have said, the Department for Transport is monitoring the situation very carefully. My colleagues have made it clear that if these teething problems are not resolved in the coming days, they will hold the industry to account—not merely the operators, but Network Rail itself, which is, I am afraid, at the heart of the problems that we have at the moment.

The beginning of the week, as my hon. Friends have noted, was a challenging time for customers of Northern and the TransPennine Express, and operators have appropriately apologised for the disruption. It is sometimes forgotten that they were upfront—perhaps not upfront enough—about the kind of disruption that they were expecting and the scale and the number of the changes. It is also right to note—the Secretary of State noted this himself earlier today—that many thousands of railway staff are working flat out to deliver the benefits of this enormous investment programme, and we should be celebrating their efforts. No one, least of all I or my colleagues, or indeed any Member of this House, wishes to see passengers face disruption, let alone on the scale that has been identified in the specific cases that have been picked out today. We understand the frustration that many have felt with this week’s service. The hope is that passengers will become a little more understanding as these initial issues are addressed and as the wider benefits start to feed through.

As colleagues across the House will know, in this case, the franchises are managed by the Rail North Partnership jointly on behalf of the Department and Transport for the North. I am assured that the team, which is based in Leeds, has been closely monitoring the situation and liaising with both operators. There is a timetable recovery plan against which Northern expect to be monitored by the Rail North Partnership team. In response to my hon. Friend’s question, I would not be surprised if a slightly more formal process of internal assessment were set up.

It is absolutely right for passengers to be compensated if they are affected by disruption. I hope that it is understood across the House that the Department has, with some effectiveness, worked with train operators to promote passengers’ awareness of their compensation rights. Rail passengers are now more willing and more able than ever to demand and to receive, without undue disruption to their own timetables or cost, the compensation that they are due. Figures published for 2016-17 showed that more than £73 million was paid out to successful claimants—an increase of 63.8% on the previous year.

Both Northern and TransPennine Express operate this delay repay compensation scheme, which allows rail passengers to claim compensation for each delay of more than 30 minutes or more whatever its cause. There are no exclusions for weather or for other delays outside the control of the rail industry. One suspects that quite a lot of this compensation will spike as a result of the experience that we have had over the past few days.

In the case of multi-modal tickets, delay repay compensation is payable for delays that occur on the rail element of journeys covered by these tickets. Of course, the train operating companies and the relevant local transport authorities remain responsible for this policy. The Department has worked very closely with the train operators to make those compensation claims as swift and as simple as possible, including through online claim forms, smartcards and online apps.

Let me turn now to the timetable. Northern has planned for some time to introduce these changes in two phases—one in December 2017 and the other in May 2018, with the latter being larger and more relevant. These were supposed to be underpinned by planned line speed improvements and electrification of the route between Manchester and Preston. Again, my hon. Friend the Member for Hazel Grove, in a very incisive analysis, put his finger on the central problem, which was that this electrification did not take place on schedule and that had all of these knock-on effects, and of course, in a network, knock-on effects themselves have knock-on effects and the result creates further disruption.

The effect of the delays to the completion of the Manchester to Preston upgrade meant that Northern had to move some of its service enhancements to a later date. Further service enhancements for Northern and TransPennine Express are planned for introduction from the end of this year through until 2020. I am sure that colleagues will be working closely with the operators to ensure that they are put in place with minimum disruption. As a result, although the operators will be delivering an increase of 1,300 new services a week from May 2018, 900 services a week—disappointingly for customers—will not be delivered until the infrastructure is ready. Once that happens, it will be a further improvement.

It became apparent in the early part of this year that the electrification process would not be completed on schedule. My hon. Friend rightly targets the question whether enough notice was given at that time. This required a lot of rethinking and rejigging by Northern. Although we are in the midst of significant operational challenges, I am afraid to say that it is appropriate to recognise that they have not yet ended. Once wishes that it were not so, but there may still be some further localised service disruption. In a way, that is to be expected with any new timetable, but it is all the more regrettable given the current circumstances. Northern has assured us that it will continue to do everything it can to make certain that there is minimal service disruption and to keep customers informed. Officials in the Department have focused on ensuring that customers know that timetables are changing.

I will not go further than my hon. Friend in addressing the specific issues that he has experienced in his constituency and on the Buxton and Hazel Grove line into Manchester Piccadilly. He has done a good and accurate job of bringing these issues to the forefront of the House’s attention. It is worth pointing out, however, that we will continue to see further improvements over time.

In Greater Manchester, Northern will begin to operate two trains an hour between Buxton and Manchester Piccadilly, significantly increasing the capacity on one of the most popular lines into the city. There will also be six trains an hour on weekdays between Rochdale and Manchester Victoria, as well as an hourly Sheffield to Manchester Piccadilly service every day. In Merseyside and Cheshire, Northern has made it clear that it will operate two weekday trains every hour between Southport and Manchester Victoria, two morning peak services from Southport to Alderley Edge via Manchester Piccadilly and two evening peak services from Alderley Edge to Southport via Manchester Piccadilly. A host of other changes and improvements have been put in place.

[Andrew Jones]

My hon. Friend is quite right to highlight the frequency improvements and particularly the upgrade of the rolling stock, with the removal of the Pacers. In the context that the franchise is improving and has ambitious long-term plans—I ought to own up that I was a Minister at the time of the franchise renewal so am slightly marking my own homework—we are talking about identifying the blockage that is stopping the benefits being delivered. Can he take back to the Department and all relevant officials the message that we need a concentrated effort on removing that blockage, with the completion of the electrification works, to allow the significant benefits of the new franchise ambitions to be delivered for the people of the north?

[Jesse Norman]

My hon. Friend is absolutely right. That point is all the more forceful from someone with his experience and terrific track record in the Department, and officials and those in the industry will take it properly seriously.

If we look more widely, the position remains in many ways extremely positive. The Government will have spent more than £13 billion between 2015 and 2020 on improving and modernising transport in various forms across the north. We are building HS2—the first new north-south railway in this country for over a century—and will be providing better journeys through the new Northern and TransPennine Express franchises, albeit once the current disruption has settled. We are also investing well over £1 billion in improvements through the Great North rail project. As has been mentioned, Northern and TransPennine Express trains will be brand new or completely refurbished, and all Pacer trains will be gone. All that is to be welcomed.

Again, I thank my hon. Friend the Member for Hazel Grove and all colleagues for the contributions they have made. Once this present phase has been completed, passengers on Northern rail will benefit significantly through some 1,300 extra services a week and rail users will have many things to be hopeful about for the future—not just brand-new trains but improvements to stations as well to service quality. The Minister of State, my hon. Friend the Member for Orpington (Joseph Johnson), has spoken to the chief executive of Transport for the North and the Mayor of Greater Manchester to underline his and the Department’s commitment to improving performance for passengers. We continue to work closely with rail companies to drive down cancellations, and to support Network Rail and the wider industry in delivering these significant improvements. I suggest that those are all things for which we will ultimately be very grateful.

Question put and agreed to.

Electric Vehicles and Bicycles

Debate between Jesse Norman and Andrew Jones

Wednesday 9th May 2018 Westminster Hall

[Jesse Norman]

Yes, I would be delighted to. I have recently written to Volkswagen to draw attention to the continuing dissatisfaction that I and my colleagues have with its performance. I have raised the matter not merely with the operating personnel but with the supervisory board of that company, and I understand that my colleagues in other parts of the Government are in touch with their German counterparts, to make it clear that we remain exceedingly dissatisfied on behalf of consumers, Volkswagen customers and the general public in this country by the performance of the company and we expect it to continue the process of making amends through the scheme it has in place, extending it as and when that may be required.

Let me proceed. I have said that we want almost every car and van to have zero emissions by 2050. We have said that we will end the sale of new conventional petrol and diesel cars and vans by 2040. My hon. Friend the Member for South West Bedfordshire asked whether that target was too far out. I say to him that it is not. If he reflects on the experience of the past 12 months, he will see that one of the results of the Volkswagen scandal has been that diesels—in many ways, diesel is a thoroughly excellent technology, which is rapidly improving and is useful especially for journeys of distance and between cities in particular—have taken the brunt of that. The result has been a worsening in performance on air quality or rather on emissions, and that is precisely the kind of counterintuitive response that would come from a failure to manage the process effectively. I draw his attention to that.

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

Will my hon. Friend the Minister give way?

[Jesse Norman]

I will give way once more, but tragically I will not have a chance to address any of the other points that were made.

[Andrew Jones]

The Minister has just mentioned air quality. Does he agree that electric buses, which are, so to speak, rolling out in Harrogate this year, are critical to providing a solid public transport system that will tackle the air quality in our towns and cities?