Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the potential impact of the recently announced Mansion House Accord on economic growth.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Seventeen of the largest workplace pension providers in the UK have signed the Mansion House Accord, a voluntary commitment which will see signatories allocating at least 10 per cent to private markets across all main defined contribution (DC) default funds by 2030, with at least half (5 per cent) of the total invested in the UK.
The Government welcomes the Accord which, via more diverse portfolios, can improve outcomes for savers and boost growth for Britain with greater investment in the likes of infrastructure and fast-growing businesses across the country.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to review their ISA scheme; what the rationale for any review would be; and whether improving UK economic growth would be an objective of the review.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government is committed to incentivising greater savings and investment.
As set out at the Spring Statement, the Government is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether their Financial Services Growth and Competitiveness Strategy will include policies to encourage more firms to list on the London Stock Exchange.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
At Mansion House 2024, the Chancellor published a call for evidence on the first-ever Financial Services Growth and Competitiveness Strategy. The call for evidence focussed on how to deliver long-term, sustainable and inclusive growth, with UK capital markets (including retail investment) identified as a priority growth opportunity. The final Strategy will be published later this year.
Alongside this, the government is already undertaking an ambitious programme of reforms to improve the competitiveness of UK markets.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the potential benefit of zero-rating VAT on fuel oil to assist households that are reliant on fuel oil to heat their homes; and what plans they have to reduce VAT on fuel oil.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Domestic fuels such as a gas, electricity and fuel oil are subject to the reduced rate of VAT at 5 per cent of VAT.
VAT is the UK's largest tax, forecast to raise £176 billion in 2024/25. A vital source of revenue which helps to fund public services.
The Government keeps all taxes under review as part of the policy making process."
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the review of Bank of England forecasting led by Ben Bernanke.
Answered by Baroness Vere of Norbiton
The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. The government’s commitment to this independence remains absolute.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have of the underlying cause of the fall in gross domestic product per head in every quarter of 2023, as reported by the Office for National Statistics on 15 February, and what action they are taking to reverse this trend.
Answered by Baroness Vere of Norbiton
The economy has faced an unprecedented series of shocks, including the Covid-19 pandemic and the impact of Russia’s illegal invasion of Ukraine. These have led to challenging economic circumstances.
Looking over a longer timeframe, since 2010 GDP per capita has increased by 12%. Real household disposable income per capita - a more comprehensive measure of household living standards - has grown more than France and Italy since 2010.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are taking to bring inflation back to the target of two per cent; and when they expect that to be achieved.
Answered by Baroness Vere of Norbiton
Inflation has halved and was lower in Q4 2023 than had been forecast by the Office for Budget Responsibility (OBR) in the Autumn. Despite the progress there are four key things the government is doing to reduce it further.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to increase the threshold for compulsory registration for VAT; and what plans they have to reinstate the policy of annually updating the threshold in line with inflation.
Answered by Baroness Vere of Norbiton
Views on the VAT registration threshold are divided and the case for change has been regularly reviewed over the years.
In 2018, the Government consulted on how the design of the VAT registration threshold could better incentivise growth. However, there was no clear option for reform.
While the Government keeps all taxes under review, it was announced at Autumn Budget 2022 that the VAT threshold will be maintained at its current level of £85,000 until 31 March 2026.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of the withdrawal of the VAT Retail Export Scheme; and if they have any plans to reintroduce the scheme.
Answered by Baroness Vere of Norbiton
The Government’s assessment of the anticipated impact of the withdrawal of the VAT Retail Export Scheme (VAT RES) was set out in the original policy costing note which can be found in the Policy costings document from November 2020 p42-43.
Government analysis conducted in 2022 found that introducing a worldwide scheme could come at a fiscal cost of around £2 billion each year. This figure consists of the cost from EU and non-EU visitors and is calculated based on methodology signed off and certified by the OBR in 2020.
Whilst there are no current plans to re-introduce VAT RES, this Government keeps all tax policy under review, and we are very grateful to industry for their contribution to our invitation to provide evidence on this matter.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to regularise the treatment of training expenses against profits subject to Schedule D income tax and profits subject to corporation tax.
Answered by Baroness Vere of Norbiton
In calculating taxable business profits, expenditure on training to update existing skills would be a deductible business expense when the expenditure is incurred wholly and exclusively for the purposes of the business and is not capital in nature. The treatment of these training expenses is the same irrespective of whether the taxpayer pays income tax or corporation tax.
Any changes to tax policy are a matter for future Budgets and it would not be appropriate to comment on tax measures at this stage of the policy development cycle.