Exiting the European Union (Excise)

Debate between Kemi Badenoch and David Linden

Wednesday 3rd February 2021 Commons Chamber

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

Britain’s departure from the European Union brings with it the freedom to reintroduce duty-free sales and make other tax changes that will deliver Brexit benefits to British tourists. Such gains have been enacted by the Travellers’ Allowances and Miscellaneous Provisions (EU Exit) Regulations 2020, which also introduced crucial changes to the VAT and excise rules for passengers following the transition period.

The new rules form a carefully considered package of measures that was introduced following a wide-ranging consultation. The changes take into consideration the Government’s aim of minimising disruption at the border, along with World Trade Organisation commitments that require the Government to align the treatment of passengers travelling to and from the EU and non-EU countries.

The provisions in the SI ensure the smooth flow of passengers entering Great Britain by reducing the need for them to stop at the border to declare goods that they have purchased. My hon. Friend the Member for North Norfolk (Duncan Baker) elaborated on how, from his personal experience, the measure removes bureaucracy. Without the instrument, EU and non-EU passengers would be treated differently, traveller flow at the border would be disrupted and the UK would breach its international obligations under World Trade Organisation law.

The measures I shall outline will have a hugely positive impact on UK travellers for a number of reasons. As my hon. Friend the Member for South Ribble (Katherine Fletcher) said, for the first time in more than two decades, the tens of millions of UK passengers who visit the EU every year—in non-pandemic times—will be able to enjoy duty-free sales. For example, with UK excise duty no longer due, a 1 litre bottle of Scotch could be around £11.50 cheaper.

In addition, we have quadrupled the alcohol allowance for passengers arriving in Great Britain, making it one of the most generous in the world. Under the new rules, passengers will be allowed to bring into Great Britain three crates of beer, two cases of wine and one case of champagne for personal use without having to pay the relevant taxes. This represents an excise duty saving of up to £120. My hon. Friend the Member for Dover (Mrs Elphicke) praised of the significance of such measures to her constituency, which has a port for travel straight to the EU.

I recognise the concerns expressed by the hon. Members for Paisley and Renfrewshire North (Gavin Newlands) and for Gordon (Richard Thomson), along with others, about the ending of the VAT retail export scheme and the removal of tax-free airside sales. Although the latter policy change on tax-free airside sales is not actually part of this instrument, let me explain our thinking behind the decisions.

In simple terms, the maintenance of the VAT RES and tax-free airside sales after the end of the transition period was never an option for the Government. In reality, the choice we faced was between extending the schemes to all EU travellers or removing them both completely, because the World Trade Organisation rules specify that goods bound for different destinations must be treated the same. However, because EU visitors have never benefited from the VAT RES and still spend in UK shops without it, to extend it now would present a large dead-weight loss, and in effect the Government would be subsidising the shopping of EU visitors. I am sure hon. Members would agree that this would be an unwise use of taxpayers’ hard-earned cash.

My hon. Friend the Member for South Cambridgeshire (Anthony Browne) set out clearly and concisely why this was not a fair and efficient use of taxpayers’ money, and I thank him for making such a well-argued case. In addition, data and evidence submitted as part of the Government’s consultation demonstrated that the VAT RES disproportionately benefited London and the south-east of England. In fact, around 90% of sales were made in London and Bicester Village in Oxfordshire. My hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) made the excellent point that other regions and, in particular, smaller high streets did not appear to gain as much, if at all.

I take the point made by my hon. Friend the Member for Kensington (Felicity Buchan). She and I have had several discussions on this issue and I have also had extensive representations from my hon. Friend the Member for Moray (Douglas Ross). However, they will both know that the Treasury disagrees with their assessments. The Office for Budget Responsibility estimates that the withdrawal of the VAT RES will result in a significant direct Exchequer saving of £1.84 billion in just over five years. In addition, the OBR estimates that the withdrawal of tax-free airside sales will result in a saving of £780 million over the same period.

[David Linden]

With all those forecasts in place, can the Minister tell the House how many jobs—such as that of my constituent, Sharon, whom I represent—will be lost when the Government proceed with this?

International Men’s Day

Debate between Kemi Badenoch and David Linden

Thursday 19th November 2020 Commons Chamber

[David Linden]

I just put it on the record that the restrictions on virtual participation may be why there are fewer Members taking part in this debate.

[Kemi Badenoch]

I understand that, but this is not the only debate that has taken place today, and others have been very well attended. I am afraid I do not accept that position and, like I said, I hope that at the next International Men’s Day debate we will see many more Members participating.

This Government are committed to levelling up opportunity and ensuring fairness for all. As Minister for Equalities, I want to ensure no one is left behind, regardless of their sex or background. Both men and women in the UK benefit from our having some of the strongest equality legislation in the world. The equality hub will consider sex, along with factors such as race, sexual orientation, geography and socioeconomic background, so we can ensure we are levelling up across the country. This will support data-driven policy to reduce disparity across the Union and make the UK the best place to live, work and grow a business. Levelling up is the mission of this Government, and every one of us should be free and able to fulfil our potential.

My hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) mentioned the coronavirus, which, as we all know, is the biggest challenge the UK has faced in decades, and we are not alone. All over the world we are seeing the devastating impact of this disease. We know that men have been disproportionately impacted by covid and that, after age, sex is the second largest single risk factor. However, not all men are the same and not all men will be affected in the same way. My report on covid disparities showed, for example, that the job someone does, where they live, who they live with and their underlying health all make a huge difference to their risk of covid-19. We recognise how important it is that each individual understands how different factors and characteristics combine to influence their personal risk. The chief medical officer commissioned an expert group to develop a risk model to do just that, and the Department of Health and Social Care is working at pace on how to apply the model.

As well as its impact on lives, covid has had a huge impact on Britain’s livelihoods, which give us pride and a way to support our families. Of course, men and women do not exist separately and in isolation; we are part of families, businesses and our communities, which is why the Government’s support is targeted at those most in need and looks at how issues are impacting on individuals, not homogenous groups, so that we ensure a fair recovery for everyone. As a Treasury Minister, I am particularly proud of our comprehensive package to protect jobs, which the International Monetary Fund highlighted as one of the best examples of co-ordinated action globally. As this House has heard time and again, we have given unprecedented support through the coronavirus job retention scheme and the self-employment income support scheme to ensure that people can get the support they need, especially those in sectors most affected by covid-19.

My hon. Friends the Members for Watford (Dean Russell), for Ipswich (Tom Hunt) and for West Bromwich West (Shaun Bailey) spoke passionately about mental health. The challenges this year have no doubt taken their toll on many people’s mental wellbeing. It is very understandable during these uncertain and unusual times to be experiencing distress or anxiety, or to be feeling low, and we know that this affects many men. Those are common reactions to the difficult situation we all face. Anyone experiencing distress, anxiety or feeling low can visit the Every Mind Matters website and gov.uk for advice and tailored, practical steps to support wellbeing and manage mental health during this pandemic.