Sanctions

Debate between Jesse Norman and Kevin Hollinrake

Thursday 22nd September 2022 Commons Chamber

[Jesse Norman]

I am extremely grateful to my hon. Friend for his question, and the House recognises his great expertise in this area. He will understand that I am not going to comment on the future sanctions policy of this Government, but he can take it as read that we are looking extremely closely not just at ways of further extending this escalating programme of sanctions that has elaborated itself over the last few months, but at closing some of the loopholes. If he wishes, I will make certain that my officials have sight of the letter he has written and will write to him on the matter specifically.

I turn to the No. 13 regulations, which widen the definition of scope of activities for which a person can be designated. His Majesty’s Government have expanded the definition of destabilising, undermining or threatening Ukraine and supporting or obtaining a benefit from the Russian regime. This brings into scope many individuals and entities in the Russian Government, its agencies and its armed forces. The regulations make minor amendments to the definitions of being involved in, obtaining a benefit from or supporting the Government of Russia. These have the effect of broadening the interpretation of being associated with a designated person to include immediate family members who may, and often do, hold assets on their behalf. The regulations also provide an exception from trade sanctions for humanitarian assistance actively delivered in non-Government controlled areas of the Donetsk and Luhansk oblasts. Finally, they expand the definition of ownership in relation to ships and aircraft, and they correct errors and omissions in previous regulations.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome my right hon. Friend to his place. He mentions family members who are associated with sanctioned individuals. He will probably be aware of, but unable to comment on, the case of Alisher Usmanov, who is sanctioned by the UK, the EU and the US but has passed on some of his wealth—£2.1 billion, I think—to his sister, who is outside the scope of our current sanctions regimes. Will my right hon. Friend’s tightening up of sanctions, which I welcome, mean that we can go after people such as Alisher Usmanov’s sister and the assets she holds on his behalf?

Finance (No. 2) Bill

Debate between Jesse Norman and Kevin Hollinrake

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Jesse Norman]

HMRC is addressing these issues. That is why this Bill has so many measures in it that are focused on the disclosure of tax avoidance schemes, toughening up that regime and improving the regime against the promoters of tax avoidance. But let me say to the hon. Lady that I thought her remark was dripping with condescension towards the ordinary taxpayers of this country. The fact of the matter is that people, from whatever walk of life, are perfectly competent—they do not need to be patronised by Labour Members of Parliament—at working out when something looks too good to be true. That is why so many—such a high percentage; well over 90% of people—do manage to work out what is too good to be true and behave on that basis. To suspect otherwise, when HMRC is absolutely working as hard as it can to make sure that the truth is out there and well understood, and is closing down opportunities for misleading advertising, in a recent initiative with the Advertising Standards Authority and a whole host of other things, is completely wrong.

I am grateful to my hon. Friend the Member for Burnley (Antony Higginbotham) for what I thought was a very robust and thoughtful contribution. He is absolutely right to highlight that HMRC has not been slow in this area. He was right to pick up the point about VAT on online platforms, but, of course, that is merely the tip of the iceberg. The hon. Member for Ealing North (James Murray) somehow suggested that we were failing to tackle this issue. The tax gap, as he pointed out, is 4.7%—a historic low. Let me remind the House and him of some of the actions that the Government have taken—leadership on base erosion and profit shifting over many years, the diverted profits tax, the corporate interest restriction, the tax charge on offshore receipts, hybrid mismatch rules, our new digital services tax.

[Kevin Hollinrake]

I very much welcome the digital services tax, which is there to try to make sure that everybody pays their fair share, as the Minister said in his opening remarks. Having said that, it does not apply to Amazon’s direct sales on that platform. It applies only to third-party merchants, so there is not that much of a level playing field between those two different cohorts. Will he look at that in future?

[Jesse Norman]

Brilliantly, my hon. Friend has intervened just before I was about to mention that we are consulting on an online sales tax, which is a parallel initiative. Indeed, the digital services tax includes the introduction of a new basis for tax—that is, UK user content. That itself is a flag to the energy and innovation that the Government are seeking to bring to this issue, and I thank him for his comments.

The hon. Member for Ealing North asked about the beneficial ownership registry on overseas companies that own or buy property in the UK. As he will know, the Government published a draft Bill. It has gone through prelegislative scrutiny. The process has, for reasons that the House will not need any reminding of or highlighting, been somewhat interrupted over the past year, but the Government plan to introduce the Bill in due course, so I reassure him on that point.

The hon. Gentleman raised the question about minimum corporate taxation. He should know that the Government have been, as I said, in the international vanguard in trying to drive change on base erosion and profit shifting, and processes of international tax agreement through the OECD. We were also in the vanguard of delivering the creation, originally, of the G20 commitments for a comprehensive global solution to this issue, based on two pillars, and we are leading the way, during our G7 presidency, on this issue, as the Chancellor has made clear. So we absolutely welcome the renewed commitment that the US Administration have made in this area, which we think is a very important change.

Finally, I turn to the important amendment 77, which was tabled by my right hon. Friend the Member for Sutton Coldfield and the right hon. Member for Barking (Dame Margaret Hodge). My right hon. Friend was right to highlight the importance of eternal vigilance—I absolutely share his view on that—and he was right, as the right hon. Lady was, to talk about the ever-shifting and evolving ways in which some of the malefactors in this area are ceasing to operate, and, of course, that is true. However, if I may say so, he erred in suggesting that the penalty on the enablers—that is to say, a sum equal to the gross fees to be collected in relation—was in any sense modest or small. It is one of the largest charges in the tax system, and because it is a gross fee, it is of course charged on the total amount of income. It is therefore income on which the promoter will have to recognise all their costs, and indeed any profit and any tax they may have paid, so it is actually a fairly formidable penalty.

Taxation (Post-transition Period) Bill

Debate between Jesse Norman and Kevin Hollinrake

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

[Jesse Norman]

In addition, the Bill amends current legislation for excise duty to be charged when certain goods, such as alcohol and tobacco, are moved from Great Britain to Northern Ireland. The changes are necessary to ensure that there is a fully functioning VAT and excise regime in place in relation to Northern Ireland at the end of the transition period.

In line with the protocol, Northern Ireland will maintain alignment with existing EU excise rules. That means a change to excise duty is required when goods are moved to Northern Ireland from Great Britain, but the Government are adopting an approach using flexibilities and EU rules that minimises changes for excise goods moving between Great Britain and Northern Ireland.

A small number of other taxation measures also need to be in place before the end of the transition period. The Bill introduces a new system for collecting VAT on cross-border goods. That includes moving VAT collection on certain imported goods away from the border and involving operators of online marketplaces in the collection of VAT at the point of sale.

In addition, measures in the Bill will remove the VAT relief on imported low-value items so that VAT will be due on all consignments, irrespective of their value. The relief has been the subject of long-standing abuse and removing it will build on Government efforts to level the playing field for UK businesses still further by protecting high streets from VAT-free imports. Together, the changes will improve the effectiveness of VAT collection on imported goods, tackle non-compliance and protect the flow of goods at the border.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I very much support the measures that the Minister is talking about. Why is the measure just for low-value goods? There will be other goods where a similar loophole applies, such as watches or jewellery that have a value above £135. Is this not an opportunity to close that loophole as well?

[Jesse Norman]

I thank my hon. Friend for his question, and I will take that under review. We have put in place a set of measures designed to tidy up the position that particularly arises in relation to the Northern Ireland protocol, as he will be aware, and the end of the transition period, and that has meant a change to low-value consignment relief and the changes I have described. I am grateful to him for his contribution and suggestion.

The Bill also includes provision for an increase in the rate of duty on aviation gasoline, which will apply across the UK. Otherwise known as avgas, the fuel is a form of leaded petrol predominantly used in leisure flying. The change made by clause 6 of the Bill will increase the avgas rate by half of a penny to 38.2p a litre from 1 January next year. By way of explanation, the Northern Ireland protocol requires that Northern Ireland continues to comply with the EU’s energy taxation directive following the end of the transition period. It sets a minimum level of duty in euros on unleaded petrol used for propulsion. After some careful consideration, the Government have chosen to apply the change to the whole of the UK to ensure consistency between Great Britain and Northern Ireland, avoid burdens on business and reduce compliance risks for HMRC.

The Bill also includes a clause to ensure HMRC has access to the same or similar tools to prevent insurance premium tax evasion as it does at present, regardless of whether an insurer is based in an EU member state. Overseas insurers are liable to pay insurance premium tax when they supply general insurance for UK-located risks. Occasionally, overseas insurers do not pay the insurance premium tax they owe, so it is important that HMRC has access to tools that deter and tackle that form of evasion. Up to now, it has been using EU provisions to prevent evasion by insurers based in EU member states.

Separately, HMRC can issue liability notices in cases involving insurers based in any country outside the EU with which the UK does not have a mutual assistance agreement. Given that the EU provisions expire at the end of the transition period, this clause will enable HMRC to issue liability notices in evasion cases involving insurers based in any country with which the UK does not have a mutual assistance agreement, including EU member states.

Finally, the Bill introduces new powers that will enable HMRC to raise tax charges under the controlled foreign companies legislation for the period from 1 January 2013 to 31 December 2018. This is a technical provision that will deal efficiently with the legacy state aid decision relating to the period before the UK left the European Union.

This Bill will give people and businesses throughout the UK certainty about the arrangements that will apply from 1 January next year. It will play a part in further safeguarding the unity and integrity of this country, both in the months ahead and long into the future. I commend the Bill to the House.

Stamp Duty Land Tax (Temporary Relief) Bill

Debate between Jesse Norman and Kevin Hollinrake

2nd reading & 2nd reading: House of Commons
Monday 13th July 2020 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to follow my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), and I will address one or two of his points, but first I must draw the House’s attention again to my entry in the Register of Members’ Financial Interests, and also apologise to the shadow Minister, the hon. Member for Liverpool, Walton (Dan Carden), as I inadvertently misled the House earlier when I said that Labour did not cut stamp duty in 2008; actually, they did, from a £125,000 threshold to a £175,000 threshold, but they crashed the housing market so badly that it made no difference whatsoever, which is why I cannot remember it. Interestingly, however, at the time, despite what he said in his speech, they made no dispensation in terms of buy-to-let investors—stamp duty was just cut across the board, regardless of what the property was for, so there was not some carve-out only for homeowners. According to the research, one thing that cut did do was boost activity, by 20%. Activity was at a very low level, as transactions were normally at 100,000 a month but they were down to 40,000 a month, so it was a pretty painful time, but the cut boosted activity, from that low level, by about 20%. Labour then withdrew the measure pretty early and activity fell away again, which is one of the reasons why we had such an extended recession from 2008 onwards.

I think certain Members have missed the point of the measure we are debating today. It is not just about helping some people get on to the housing ladder; it is also about activity. We all know that the housing market is a major driver of activity right across the economy. That is why many hon. Members have asked why on earth we are taxing something that is a major driver of activity across the economy. This is a transaction tax, and is therefore bound to slow the market down even in good times, let alone times such as this when we are trying to stimulate the economy.

This is not just about driving activity. Residential stamp duty brings in important revenue—about £8.3 billion every year. When my hon. Friend the Member for Runnymede and Weybridge talked about stamping out stamp duty entirely, I saw the sweat on the Minister’s brows as he was thinking, “Where are we going to find that £8 billion?”

[The Financial Secretary to the Treasury (Jesse Norman)]

My hon. Friend will be pleased to know that actually I remained as implacably calm as I always am. As a test of all colleagues who want to scrap taxes, I invite them to do exactly what he is doing and supply the missing revenue with some other suggestion. I did not notice that in the speech of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), but I am still waiting; I look forward to hearing that before we finish.

[Kevin Hollinrake]

The Minister is absolutely right, and I will come to that.

The Conservative Government have improved the system of stamp duty significantly. It used to be a ridiculous slab tax that created distortions all the way through the market, but we made it into a slice tax—perhaps a slam tax—that gets very expensive at the higher levels and deters activity at the top end.

On the Minister’s point about where on earth we are going to get the money from, the reality is that this nation will come under huge tax pressure over the next few decades, not just the next few years. According to the Office for Budget Responsibility, because of the demands of healthcare and social care, if we do not change the tax system and claim more tax, our national debt will grow to three times our GDP—it is one times our GDP today—so we cannot simply scrap taxes without introducing alternative measures.

I am going to propose a measure. I would like the threshold remain at £500,000, as my hon. Friend the Member for South Thanet (Craig Mackinlay) proposed. We have to find that £8.3 billion annually, so we have to look at annual property taxes. The council tax system, under which people pay pretty much the same whether they live in a castle or a cottage, cannot be right. We need to revisit it and have a proper discussion about it. It is controversial. Some people think it is right that people who own bigger houses should pay more, and other people think it is wrong. We should certainly have a conversation about that.

The think-tank Onward recently proposed that there should be a council tax revaluation, and even the Prime Minister suggested back in 2014 that we should look at it. The thing about it is that it is simple. We can scrap stamp duty completely up to £500,000, and keep it at that level. We can also adjust the bands to make it cheaper for people in lower-value homes, to help people on lower incomes, and make it more expensive for people in higher-value homes.

It is simple, but it is not easy. Simple and easy are two completely different things. As Ronald Reagan said, there are simple solutions, but there are no easy solutions. If we are to tackle some of the unfairnesses in society, we must not duck the tough issues; we must look at the things that make the system unfair in the first place. This is an excellent measure, and I will support it tonight if we enter the Lobbies.

Finance Bill

Debate between Jesse Norman and Kevin Hollinrake

Report stage & Report: 2nd sitting & Report: 2nd sitting: House of Commons
Thursday 2nd July 2020 Commons Chamber

[Jesse Norman]

With permission, Madam Deputy Speaker, I will give way to my hon. Friend.

[Kevin Hollinrake]

I declare an interest as somebody who has benefited from entrepreneurs’ relief in the past. Is the Minister considering extending the reduction in entrepreneurs’ relief, which I support, to investors’ relief, which currently stands at the same figure as entrepreneurs’ relief used to stand at—£10 million?

[Jesse Norman]

If my hon. Friend is asking questions, he ought to stay for the next debate, because he is abusing the privilege of this debate. I thank him for his suggestion of a revenue-raising possibility for the Government; we take all those in great heart.

Finance Bill

Debate between Jesse Norman and Kevin Hollinrake

Report stage & Report stage: House of Commons & Report: 1st sitting & Report: 1st sitting: House of Commons
Wednesday 1st July 2020 Commons Chamber

[Kevin Hollinrake]

It is a pleasure to follow my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates), who made some very important points. She made the critical point that the digital services tax is a temporary, short-term measure, and we need something more encompassing to replace it. That is why I want to speak to new clause 33, which proposes a radical reshaping of how tax affairs would be disclosed. If we are going to tackle this fundamental problem, it is essential that we have country-by-country reporting. I therefore do not secretly support this new clause; I openly support it, even though it is not going to be pushed to a vote today. The principle behind the clause is absolutely right, and I pay tribute to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and the right hon. Member for Barking (Dame Margaret Hodge) for their work on it and in many other areas to tackle tax avoidance and corruption.

The other key element of the digital services tax is that it tries to level the playing field in corporation tax, but it does not level the playing field for business rates. That is a completely different discussion and it is one that we definitely need to have.

When I first came to the House, I attended one of those breakfasts; I think it was run by the Industry and Parliament Trust, of which I am a trustee. The subject of that seminar was the values of business—I have been in business for 30 years, and in my view business is a force for good in the vast majority of cases—and it was addressed by a vice-president of Kellogg’s, who talked about the values of business to the economy and the inherent values of some businesses. As examples, he talked about the great values and corporate social responsibility of businesses such as Facebook, Google and Amazon.

While the speaker was addressing us I googled, “Do Kellogg’s pay corporation tax in the UK?” My search came up with a Daily Mail article saying that Kellogg’s turns over £650 million in the UK and does not pay any corporation tax. When he got to the end of his comments, I asked him, “How can you square the circle—saying that you have great corporate social responsibility policies and put money into good causes in the UK, which might cost you a few pence or percentage points in terms of cost and contribution, when you are not paying corporation tax? Your customers are taxpayers. You are trading and turning over a significant amount of money in the UK. And yet you are not contributing back to the bills and the vital public services that your customers rely on. I think it is a cynical approach.”

This Kellogg’s vice-president was clearly quite stunned by my question. I quoted to him that Kellogg’s is one of those companies that does not pay corporation tax. When pressed for an answer, the only one that he could come up with was, “Well, we’ve got a duty to shareholders to minimise our tax burden.” That is an old chestnut. I hear lots of big shareholders of big companies in the US—people such as Warren Buffett—absolutely reject that notion. In my mind it cannot be right that businesses seek to avoid fair taxation rates in this world and, as many hon. Members have said, we have a duty to stand up for small and medium-sized enterprises that cannot benefit from these kinds of devices. The vast majority of us pay tax through pay-as-you-earn anyway, so we pay our fair share of tax—and most people do so willingly.

[Jesse Norman]

My hon. Friend raises an interesting point. Does he share my view—I think it is also the view of the people who really know the law in this area—that in Britain a corporation exists to maximise the interests of all its members, rather than merely the shareholders, and that the shareholder entitlement is to the residual that is left after satisfying other claims on the company?

[Kevin Hollinrake]

I absolutely agree. Any businessperson starts off on the premise that they have responsibilities not just to their shareholders, but to their customers and other stakeholders.

Due to the scale of the problem and the lack of country-by-country reporting, it is difficult to establish exactly what some of these companies are making in the UK, but let us look at Google as an example. In 2018, Google turned over $137 billion and had net revenues— so a profit—of $31 billion. The whole organisation internationally works on a profit margin of about 22%. The company turned over around $10 billion in the UK in the same year, and makes about $2.2 billion of profit from UK activities each year. If we applied 19% corporation tax to that amount, we would come up with a figure of £420 million in corporation tax that Google should have paid. It actually paid £67 million that year. This is happening on a huge scale and is multiplied by many other companies.

--- Later in debate ---

[Kevin Hollinrake]

I am surprised that my right hon. Friend says that this is not a method to try to bring companies that are avoiding tax to the tax table. The previous Chancellor, Philip Hammond, said in a speech that these measures would effectively insist that,

“global internet giants…contribute fairly to funding our public services.”

Is that not reflective of a position where he felt those companies were avoiding tax?

[Jesse Norman]

I think one could put it a slightly different way, which is to say, “You do not have to take a position on avoiding tax to come to the view that this is a base of tax revenue that has not been adequately taxed and should be taxed, and if you do follow that approach,” —here I will defer to the hon. Member for Wirral South (Alison McGovern)—“ipso facto you are going to be levelling the playing field to a degree.” Anti-avoidance measures are measures used in separate contexts to level the playing field as well.

Draft Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019

Debate between Jesse Norman and Kevin Hollinrake

Thursday 31st October 2019 General Committees

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Committee has considered the draft Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019.

It is a great pleasure to serve under your chairmanship, Mr Stringer.

The regulations make technical amendments to the rules governing offshore receipts in respect of intangible property—the hyper-sexy acronym is ORIP—that were introduced in the Finance Act 2019. The ORIP rules tackle large multinationals that have entered into arrangements to receive income from their intangible property—copyrights, patents and other intellectual property—in offshore territories where that income is either untaxed or taxed at low effective rates. The rules tax the proportion of that income that relates to the sale of goods or services in the UK.

ORIP reduces the opportunities for large multinationals to gain an unfair competitive and tax advantage by using contrived offshore intellectual property structures to reduce their tax burden, thereby levelling the playing field for businesses operating in UK markets. The rules as enacted include a regulation-making power to allow for amendments to improve targeting and minimise unintended consequences, and this statutory instrument is the result.

Following recent consultation, the statutory instrument makes technical changes to the detailed provisions that are necessary for the regime to work as intended. Overall, ORIP is still expected to yield £1.1 billion over the scorecard, and these changes do not affect the costings. Where they are relieving, most of the amendments are treated as having retrospective effect from 6 April 2019, when the ORIP rules commenced. A few of the amendments, where they are charging, will have effect prospectively from the day after the regulations are made.

Let me briefly say a few words about each amendment. First, ORIP is targeted at territories with which the UK does not have a full double tax agreement, or DTA. That is intended to ensure the UK remains compliant with its international obligations. The regulations make two changes to the scope of the legislation. First, they extend the ORIP charge to businesses that are resident in a territory that has a full DTA with the UK but where resident businesses do not qualify for relief under it. That may be because the business is of a type explicitly excluded from the agreement or because the income paid to the business is not covered by the double tax agreement. The effect of that is to bring as many low-tax territories within scope as possible while remaining consistent with the UK’s international obligations. The change is prospective and will take effect from the day after the regulations are made.

Secondly, the regulations introduce an exemption for companies resident in specified territories with which the UK does not have a full DTA. That exemption, which is subject to anti-avoidance conditions, will be used to ensure that ORIP does not apply to high-tax jurisdictions that do not have a full DTA with the UK.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I realise that these matters are very complex and we need to narrow down the opportunities for multinationals to shift their profits around, on which this Government have done much work. However, Google makes a 22% profit margin internationally and turns over around £10 billion in the UK, which means, with a corporation tax rate of 19%, that it should pay around £420 million a year in tax in the UK, yet it pays only around £70 million. Does the Minister agree that we cannot rest in our pursuit of increased measures until it pays the appropriate amount of UK tax?

[Jesse Norman]

I am grateful to my hon. Friend for his intervention, which reflects his characteristically acute understanding of financial and tax issues. Of course, the question in many of these cases—I will not take one in particular—is whether companies have paid the appropriate level of corporation tax in the jurisdictions where corporate tax is chargeable. There is then the separate question whether they pay a fair level of tax in the jurisdictions where they do business. He will understand that the latter is very much in the Government’s mind. That is part of the purpose of our new digital services tax, which we hope to introduce in the next Finance Bill and for which legislation has already been published.

Income Tax

Debate between Jesse Norman and Kevin Hollinrake

Wednesday 3rd July 2019 Commons Chamber

[Jesse Norman]

Those companies’ return to profitability was the result of proper, prudent financial management. I remind the hon. Lady that in the specific case of the financial sector, the bank levy has taken billions of pounds a year more from the banks than the Labour tax that it replaced. I do not think her view has credibility.

The hon. Member for Bootle criticised the timetable, but it is designed specifically to keep uncertainty to a minimum. Far from the suggestion that it would create more uncertainty, the point of my saying that qualifying expenditure on new builds or renovations for which all contracts for the physical construction works were entered into on or before 29 October 2019 will be eligible for relief is precisely to give very clear direction to future investment. I do not agree with many of the points that he made.

[Kevin Hollinrake]

Does the Minister think that the hon. Member for Bootle understands how reliefs work? He said that it was about giving away millions of pounds to corporations. Actually, if a corporation invests on the back of a relief, it still costs that corporation money; it just makes the investment slightly more attractive.

[Jesse Norman]

My hon. Friend is right. The point of the relief we are giving through the structures and buildings allowance is precisely to level the playing field and to enable and encourage more business investment.

The hon. Members for Bootle and for Aberdeen North (Kirsty Blackman) asked about reviewing or monitoring. As they will be aware, the Treasury and HMRC continuously monitor tax reliefs according to the level of risk they pose, and they publish annual statistics on tax reliefs, including cost estimates where they are available.

I will now turn to the other points made by the hon. Lady. She says charitable organisations will be heavily affected. The statement that the acquirers of structures or buildings are asked to fill out consists of four factual pieces of information: first, what is the asset; secondly, when was it built; thirdly, when did it come into use; and, lastly, how much did it originally cost? That is not a heavy burden on any institution.

Regional Transport Infrastructure

Debate between Jesse Norman and Kevin Hollinrake

Tuesday 5th March 2019 Westminster Hall

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

It is an absolute pleasure to see you in the Chair, Ms Ryan. I am not a huge reader of Tom Clancy, but I think that Jack Ryan could take your correspondence course when it comes to bravery in public office, so thank you very much indeed. I congratulate my friend the hon. Member for Barnsley Central (Dan Jarvis) on securing the debate, and all hon. Members who participated in the wide-ranging conversation.

I know that the hon. Member for Barnsley Central, with his mayoral hat on, will hope, as do the Department and I, that he will be able to complete the devolution deal that he has in mind for the Sheffield city region, releasing powers and funding. Although I know that is not always the position held on the Government Benches, we have been working closely with him on that. As he said, transport is essential for prosperity, growth and wellbeing across the whole country. We recognise that good transport infrastructure is absolutely essential to productivity. That point was well made by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who highlighted the productivity gap in this country. That means delivering new infrastructure, from strategic and regional priorities all the way down to the local level. I will touch on all of those levels, while addressing as many of the points that have been raised by hon. Members as I can.

As hon. Members will know, in 2017 the Government published a very ambitious transport investment strategy, setting out our ambition to build a stronger and more balanced economy within the industrial strategy more widely, and responding to local growth priorities. That has conditioned the investments we have made ever since.

On the road side—hon. Members know that I am the roads Minister—we have invested heavily in existing transport infrastructure and new schemes, with some £15 billion being spent through road investment strategy 1 between 2015 and 2020. In the 2018 Budget the Government published objectives for road investment strategy 2, which will run from 2020 to 2025 and include £25.3 billion to be made available to further develop and improve the strategic road network. We are developing an affordable and deliverable investment plan for RIS2, which will be published later this year.

I could not help noticing that the hon. Member for York Central (Rachael Maskell) was extremely rude about road building and called it catastrophic. Does that constitute a change of policy on the part of the whole Labour party? I encourage her not to think of it in that way, because road investment strategy 2 not only includes hundreds of millions of pounds for cycling and walking schemes and an enormous investment in skills, which she cares very much about, but paves the ways for autonomous and electric vehicles, which will be the vehicle—if I may use the pun—for the decarbonisation and greening of our economy in the longer term.

[Kevin Hollinrake]

Will the Minister give way?

[Jesse Norman]

I do not have time; I apologise.

In the 2018 Budget we also provided a top-up of £420 million for local roads, particularly to repair potholes. A share of £3.5 billion of the national roads fund over five years from 2020-21 will fund improvements in the middle tier of the country’s busiest and most economically important local authority A roads, such as the A66, which connects Cumbria to the north-east. I have made no secret of the fact that, in the spending review, I am pressing for a local roads settlement that follows a similar five-year pattern so that local authorities have more visibility and more capacity to make strategic decisions at a level that is, hopefully, at least as good as the present one.

Of course, we are not just investing in the strategic road network; we are continually investing in upgrades and improvements to rail, including £1 billion that has been invested so far in the great north rail project and £3 billion that will be spent over the next few years to improve rail journeys between Manchester, Huddersfield, Leeds and York. Every train on the Northern and TransPennine networks will be new or modernised by 2020.

On Northern Powerhouse Rail, the strategic outline business case has been received and is under review. We expect to develop a response to it in close co-operation with partners across the north. It has been suggested that scrapping HS2 is the best way to secure Northern Powerhouse Rail, but that is naive, if I may say so. The Government’s commitment remains unchanged. HS2 is one of the keys to developing Northern Powerhouse Rail, not least because Northern Powerhouse Rail trains will use HS2 infrastructure, including on the approach to Manchester and between Sheffield and Leeds. That may mean that HS2 infrastructure will have to be built first, as a priority, before NPR can be implemented on those stretches.

Rightly, active travel has been mentioned and has been a focus of the debate. The hon. Member for York Central spoke about mode shift, and I could not agree more—I spoke at the Modeshift awards earlier today. It involves investment in air quality, cycling and walking schemes, our new road to zero strategy and the future of mobility. We are heavily involved in all those things.

We have published a cycling and walking investment strategy, which sets out ambitions for 2040. So far we have made £1 billion available to local bodies over the next five years to invest in local cycling and walking schemes. We have supported 46 local authorities on specific schemes that they have in mind. I share the view of the hon. Member for Barnsley Central and am delighted that he is appointing an active travel commissioner. I take my hat off to Chris Boardman and to the other highly engaged local teams at mayoral authorities that are making transformative differences.

There is a question about the city versus town balance. Recent Government initiatives, such as the future high streets fund and the stronger towns fund, which was just announced, have tried to recognise that. That city focus has been well picked up by mayoral authorities, however, and in Manchester we have invested £250 million through the transforming cities fund, of which £160 million is going on cycling and walking schemes through the transformative Beelines project.

Hon. Members on both sides of the Chamber have expressed concerns about regional investment. There cannot be much doubt that successive Governments have under-invested in the north, which we recognise. However, we are investing in the north not just because of that, but because it is the right thing to do and it is essential to our future productivity as a nation.

The hon. Member for Easington (Grahame Morris) rightly mentioned perceptions of unfairness. He is probably more sophisticated than I am in looking at the specific regional differences, but he ought to know that new figures from the Infrastructure and Projects Authority show that central Government’s planned transport capital investment spend will be higher in the north-west, north-east, and Yorkshire and Humber than for London, the south-east and the south-west as a whole. That conceals regional variations, as he will be aware, but it is a highly encouraging sign overall.

I will crack on in the few minutes I have left, because I want to leave some time for the hon. Member for Barnsley Central to reply. At a regional level, we have supported sub-national transport bodies, which are important from our point of view, particularly in the production of a regional evidence base for our major road network. Hon. Members will know about the transformative move that took place on 1 April 2018, when Transport for the North became a statutory body. It is not just about the north; the Government have been clear that investment in the south-west is also important to that region’s economy, as the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) touched on. That is why we have just published “Investing in the South West”, building on ambitious plans to grow the region’s economy.

The hon. Member for Barnsley Central rightly said that there has been a lot of focus on cities. I have mentioned three obvious ways in which we have tried to address that head-on: first, through devolution deals and wider city regions; secondly, through the £2.5 billion transforming cities fund; and thirdly, through the new stronger towns fund and the future high streets fund, which comprise nearly £1.3 billion.

The future of mobility is of great importance. We are thinking hard about how to improve mobility, which does not just mean the autonomous and electric vehicles that will require higher quality road surfaces and that underpin the need for continued road investment. It also involves the £150 million that we have invested in Transport for the North for smart and integrated ticketing and the investment we have made in future mobility zones across the west midlands.

In the minute remaining, I will quickly pick up on some of the points raised by hon. Members. The hon. Member for Slough (Mr Dhesi), who is no longer here, which is a pity, asked whether we were dragging our feet on western rail links to Heathrow. The answer is absolutely not. The consultation concluded in June 2018 and Network Rail intends to submit proposals for planning powers later this year.

My hon. Friend the Member for Isle of Wight (Mr Seely) asked a whole host of questions—I wish I could respond to all of them. I have looked closely at the Green Book and think there is still work to be done on it. Frankly, in many ways the Treasury takes a Department for Transport lead on it, precisely to get away from an overly financialised or economic view. We have a five-case model, which includes environmental impacts and others. If hon. Members would like to come and discuss with officials how that works in specific cases, I would be happy to curate a roundtable or something of that kind.

A question was asked about the fragmentation of transport, which is always a concern and something that the Williams reviews is looking at. The hon. Member for Strangford (Jim Shannon), who is no longer here, made a point about connectivity. I could not agree with him more. The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) expressed her gratitude. I remind her of the definition of gratitude in “Yes Minister”, which is, “a lively expectation of favours to come”.

Oral Answers to Questions

Debate between Jesse Norman and Kevin Hollinrake

Thursday 1st March 2018 Commons Chamber

[Jesse Norman]

The hon. Lady will be aware that substantial amounts of money have already been put aside to help local authorities that have been affected by air quality problems, and it is up to Oxford to see if it can apply for that money when it becomes available.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I drive an electric car, but many people do not. Northern powerhouse rail will take many cars off the road. The all-party parliamentary group on the northern powerhouse is calling for the northern powerhouse rail project to be brought forward to coincide with the completion of High Speed 2 in 2032. Will the Minister support that proposal?

[Jesse Norman]

I am always grateful for invitations to support proposals. I think I will leave that proposal to the specific Ministers concerned, but my hon. Friend will be aware it is a manifesto commitment.

Oral Answers to Questions

Debate between Jesse Norman and Kevin Hollinrake

Tuesday 13th September 2016 Commons Chamber

[Jesse Norman]

Actually, there is remarkably little sign that confidence in the sector is dropping. There is a recognition that those changes had to be made and the sector has responded remarkably resiliently. We must not forget that it has also been spreading expertise in solar internationally, which is another reason for thinking this is a real long-term success story.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the new ministerial team to their new roles. Kingspan, a significant employer in my constituency, has contacted me regarding concerns about the revaluation of business rates for cellphone rooftop solar. The result is a sixfold to eightfold increase in rates. Will my hon. Friend agree to meet me and representatives from the company to see how these effects can be mitigated?

Fourth Industrial Revolution

Debate between Jesse Norman and Kevin Hollinrake

Thursday 8th September 2016 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is always a pleasure to speak with you in the Chair, Madam Deputy Speaker.

I congratulate my hon. Friend the Member for Havant (Mr Mak) on securing this very important debate and on his motion, which notes the importance of small and medium-sized businesses, the huge contribution they make and their expertise. The motion also calls on the Government to

“continue introducing and supporting policies that keep the UK at the forefront of this revolution”.

I wish to add to that, as I think we will need policies that support small businesses and let them take advantage of these opportunities in the future.

I welcome the opportunities that this industrial revolution will bring, but I have niggling concerns. I will always be a champion in this Chamber for small business, having set up my own business in 1992 and then several technology businesses later on, with varying degrees of success. Business is a huge opportunity for this nation and for individuals, and it can transform the lives of people right across this land, whatever their background. There is also an opportunity for the consumer here, of course, as this technology revolution in particular is transforming the way in which consumers shop and travel, and how they can socialise. We need to look at how some of these channels will be dominated by huge businesses and at the potential opportunities—or even the lack of opportunities, which I am most concerned about—within their supply chains for small business.

Let me touch briefly on the pipes that we need. My hon. Friend the Member for Wells (James Heappey) talked about ensuring that the country has the right infrastructure, and this is about mobile phone communication—not just 4G but 5G—and our broadband. We do not want a sticking-plaster approach, because we need to get fibre not just to cabinets, but right through to premises. Only 2% of premises in the UK have a fibre-to-the-premises connection, which is the futureproof solution that we need. In Spain, the figure is 60%. I have welcomed the Government’s £1.7 billion investment in this area in the past, particularly for rural areas, as it has made life much easier for many of my constituents and businesses. Nevertheless, I fear that we will hit the same bottlenecks in five and 10 years’ time unless we step up our investment.

[Jesse Norman]

Did my hon. Friend note the brilliant report on broadband that the Culture, Media and Sport Committee published in July, which highlighted the underinvestment by BT in the national broadband network that independent experts estimate to be in the region of hundreds of millions of pounds a year? That is directly attributable to the way in which BT’s investment policy is carried out, and it is to the detriment of shareholders.

[Kevin Hollinrake]

My hon. Friend hits on one of my favourite topics: the culture of corporate obfuscation that we get from BT and its willingness to underinvest to maximise profitability. We absolutely need to get BT to up its game. I agree with Ofcom, which says that one solution is to open up the ducts and poles to other operators. Perhaps in future, when there are bidding rounds for Government investment, local authorities or the delivery authorities should themselves be held responsible for ensuring that third-party operators—smaller operators—get access to those ducts and poles in the local areas for which money has been committed.

The Government are supporting small businesses and innovations in many ways. As the Minister mentioned, there has been a 38% increase in investment in Innovate UK since 2010. Research and development tax credits have a hugely beneficial effect on companies that want to invest in new technologies. The enterprise investment scheme has unlocked investor capital for new start-up businesses and made such businesses possible on the back of these tax concessions. I support the retention and perhaps expansion of the concessions to make sure that we get new businesses to take advantage of these opportunities.

The failure rate for high-tech businesses is very high, but investors will countenance that because the rewards are also very high. Investors know that it is almost a winner-takes-all bet. They know that if they get it right, they can land themselves with an Amazon, a Google, an Uber, an Apple, or even a Rightmove or a Zoopla. In many sectors, there is either no competition or competition from just one other body, which puts those businesses in a hugely advantageous position.

In some areas of technology, business inevitably wins, and the other thing that will inevitably win is the machine. I spent my summer holidays reading a very interesting book by Matt Richtel called “A Deadly Wandering”, which talks about the ability of machines to multi-task. Richtel talks about the cocktail party effect. He describes a person in a conversation at a cocktail party. He says that it is not possible for them to listen to another conversation if they are truly engaged in their own conversation, as they can only do one thing at a time. Apparently, they can recognise their name being mentioned, but that is about it. Computers, on the other hand, can do millions of things at the same time, and they can do them better. A new computer called AlphaGo was built to try to beat the world champion of the game Go. That is not just a game of logic, but a game of intuition, yet the computer beat the world champion Lee Sedol five times in a row. The computer hones its own skills. So machines will win and big business will win.

The biggest worry I have about some of the businesses that will win in the future is their ability to dominate the entire supply chain. Uber is a good example. When it first came along, we saw it as just something that connected people who wanted a taxi with people who were taxi drivers. Uber has been clear that in the future it wants to be the taxi driver as well. In fact, it does not want any taxi drivers; it will have autonomous vehicles, and will no doubt link up with huge car manufacturers. Toyota, Nissan and other companies are looking at this. Uber will be end to end, taking away small business opportunities from taxi drivers, delivery drivers and HGV drivers.