Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Agnew of Oulton on 22 September (HL7928), whether value added tax rates in Northern Ireland have the potential to rise above value added tax rates in Great Britain after (1) the end of the transition period, and (2) the Protocol on Ireland/Northern Ireland and any new state aid rules are operational.
Answered by Lord Agnew of Oulton
As described in my response of 22 September (HL7928), the Northern Ireland Protocol ensures that Northern Ireland remains part of the UK’s VAT system. Its provisions on VAT rates will provide the Government with the flexibility to introduce certain new zero and reduced rates in Northern Ireland.
It will allow the Government to introduce a zero rate for women’s sanitary products across the UK from 1 January 2021. Beyond that, the Government has no current plans to introduce new zero or reduced rates after the Northern Ireland Protocol comes into effect.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether value added tax rates (1) will, or (2) have the potential to, vary between Northern Ireland and Great Britain after the end of the transition period.
Answered by Lord Agnew of Oulton
The Northern Ireland Protocol ensures that Northern Ireland remains part of the UK’s VAT system. Its provisions on VAT rates provide the flexibility to introduce certain new zero and reduced rates in Northern Ireland. For example, this agreement allows the Government to meet its commitment of introducing a zero-rate for women’s sanitary products.
VAT raises a significant amount of revenue and plays an important part in funding the Government's spending priorities. While all taxes are kept under review, there are currently no plans to introduce any other zero or reduced rates of VAT.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether the (1) application, and (2) rates, of VAT will remain the same in Northern Ireland and Great Britain following the end of the transition period for the UK's withdrawal from the EU.
Answered by Lord Agnew of Oulton
The Northern Ireland Protocol includes provisions that affect the operation of VAT and excise in Northern Ireland after the transition period.
The Protocol ensures that Northern Ireland remains part of the UK’s VAT and excise systems, with HMRC continuing to be responsible for the operation and collection of these revenues and Parliament responsible for setting rates across the UK.
The Protocol also ensures that the Government could apply certain zero-rates or reduced rates in the UK, including Northern Ireland, in the future; enabling, for example, the Government to meet its commitment to introduce a zero-rate for women’s sanitary products across the UK.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the ability of global markets to fund the borrowing by developed countries as a result of the COVID-19 pandemic
Answered by Lord Agnew of Oulton
HM Treasury continuously monitors the global economy. Since the onset of the COVID-19 pandemic, developed countries have responded with considerable fiscal support. The IMF has affirmed the vital role of such support, and notes that markets expect sovereign bond yields to remain low in advanced economies over the medium term.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the likelihood of a rise in interest rates due to an increase in borrowing.
Answered by Lord Agnew of Oulton
The Bank of England’s Monetary Policy Committee is responsible for setting interest rates to meet the inflation target, and has operational independence from the Government to determine the appropriate level of interest rates.
The Government is ultimately a price-taker, with the price of Government debt dictated by the market. UK debt benefits from “safe haven” status. The trust in the UK’s institutions makes gilts a popular form of sovereign debt compared to many other comparable issuers, keeping its borrowing costs low.
UK borrowing costs tend therefore to chiefly be driven by global risk sentiment and currently stand close to historical lows. The gilt market is deep and liquid with a good track record in responding smoothly to increases in gilt supply.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to augment customs arrangements between Great Britain and the Republic of Ireland after 1 January 2021.
Answered by Lord Agnew of Oulton
The UK will be leaving the Customs Union at the end of this year. The Government will implement customs arrangements that facilitate trade and investment between the UK and EU, but that ensure customs authorities are able to protect their regulatory, security and financial interests.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether goods moving between Northern Ireland and Great Britain will be subject to customs inspections once the UK has fully withdrawn from the EU.
Answered by Lord Agnew of Oulton
Under the UK’s Withdrawal Agreement, Northern Ireland remains part of the UK’s customs territory. As set out in the New Decade, New Approach deal, the Government has committed to legislate to guarantee unfettered access for Northern Ireland’s businesses to the whole of the UK internal market and to ensure that this legislation is in force for 1 January 2021. The arrangements that the Government introduces will reflect this approach and the Government will set out more detail in due course.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether customs officers will have powers to prevent goods moving between Northern Ireland and Great Britain following the UK's withdrawal from the EU.
Answered by Lord Agnew of Oulton
Under the UK’s Withdrawal Agreement, Northern Ireland remains part of the UK’s customs territory. The Withdrawal Agreement allows the UK to ensure unfettered market access for goods moving from Northern Ireland to Great Britain. The arrangements that the Government introduces will reflect this approach and the Government will set out more detail in due course.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of reports of insurance companies refusing to pay claims from customers for business interruption on the grounds that the restrictions introduced by the Government to tackle the COVID-19 pandemic invalidated customers’ policies.
Answered by Lord Agnew of Oulton
For those businesses which have an appropriate policy that covers government ordered closure and unspecified notifiable diseases, the Government’s social distancing instructions are sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.
However, it is important to note that most businesses have not purchased insurance that covers losses from unspecified notifiable diseases, such as COVID-19. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Some policies cover losses arising from any disease classed as notifiable by the Government, however, most policies only cover a specific list of notifiable diseases. The terms of a policy cannot be changed retrospectively.
The Government recognises that businesses who do not have appropriate insurance cover will require support from elsewhere. The Government encourages businesses to seek assistance through the wider support package if they are in financial difficulty. Businesses should explore the full package of support set out by the Chancellor in recent weeks, which includes measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.
Asked by: Lord Empey (Ulster Unionist Party - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what discussions they have had with insurance companies that are refusing to pay claims to customers as a result of the restrictions introduced by the Government to tackle the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
For those businesses which have an appropriate policy that covers government ordered closure and unspecified notifiable diseases, the Government’s social distancing instructions are sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.
However, it is important to note that most businesses have not purchased insurance that covers losses from unspecified notifiable diseases, such as COVID-19. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Some policies cover losses arising from any disease classed as notifiable by the Government, however, most policies only cover a specific list of notifiable diseases. The terms of a policy cannot be changed retrospectively.
The Government recognises that businesses who do not have appropriate insurance cover will require support from elsewhere. The Government encourages businesses to seek assistance through the wider support package if they are in financial difficulty. Businesses should explore the full package of support set out by the Chancellor in recent weeks, which includes measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.