Oral Answers to Questions

Debate between Victoria Atkins and Patricia Gibson

Tuesday 5th December 2023 Commons Chamber

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

T7. Last week, the former Health Secretary admitted at the covid inquiry that sick pay across the UK is “far too low”. It is far lower than the European average and encourages people to go to work when they should be getting better. Does the Secretary of State agree with her predecessor? What discussions will she have with her Cabinet colleagues to improve the inadequate sick pay system?

[Victoria Atkins]

I will not comment on evidence from the covid inquiry, given that it is an independent inquiry. However, on the general principle of encouraging people back into work, we have the plans set out by the Secretary of State for Work and Pensions and the Chancellor at the autumn statement. We want to encourage people back into work and to support them when they fall ill and need help from the state.

Sunscreen Products: VAT

Debate between Victoria Atkins and Patricia Gibson

Thursday 9th February 2023 Westminster Hall

[Victoria Atkins]

I will develop my argument, and then I will give way to the hon. Lady.

I know that hon. Members have said they suspect they know what I am going to say, but I cannot change the fact that VAT is one of the main forms of revenue for the UK Government. In the year 2022-23, VAT is predicted to raise some £157 billion. To put that into context, that it almost the entire cost of our NHS. That is how important it is as a revenue raiser for the Government so that we can fund the services we care so much about.

Against that VAT backdrop, we look at items that we want to zero-rate or exempt. The hon. Member for East Dunbartonshire mentioned period products; I am really proud that a Conservative Government removed VAT from period products. That is a definite benefit of our having left the EU. Starkly, evidence is emerging that such VAT cuts are not being passed on to customers by those who sell those products. I have asked for more details about that, because when Government change tax policy in order to try to help with the cost of living—

[Patricia Gibson]

On that point, will the Minister give way?

[Victoria Atkins]

In a moment. It is important that those changes are passed on to the consumer, as that is the purpose of the policy. Our raw concern is that if relief is provided, not just with VAT but on other taxable items, it may not be passed on to the customer.

Colleagues across the House have rightly commended Tesco for choosing to absorb the VAT on sunscreen products within its profit margins. I stand with those Members and encourage other retailers to do the same, if this is a matter they care deeply about. While I am delighted to hear that Morrisons will promise to pass on the cut to customers if this VAT policy is changed, I gently point out that we would expect it to do that anyway; perhaps Morrisons should be encouraged to follow the lead of its market competitor Tesco. I know not, and I had better not get involved in competition between supermarkets. However, I would very much hope that retailers—I am sure they take a close interest in their customers’ ability to pay—will follow Tesco’s lead.

[Victoria Atkins]

There were a number of points there. First, the hon. Lady asked about independent retailers, and I fully accept what she said. I do not pretend that this is an easy decision or an easy policy area. My duty as a Minister is to weigh up the trade-offs implicit in deciding tax policy. We have to ensure that when we make changes to the VAT system, we do so fully understanding the potential consequences for other aspects of that system.

The hon. Member for North Ayrshire and Arran said that this change would represent a very small sum. The truth is, since the 2016 referendum, the Treasury has been encouraged to make changes to the VAT system totalling some £50 billion. Many of those changes will be commendable, and we will have a great deal of sympathy with why a Member feels compelled to make that case on behalf of their constituents. However, we have to make these difficult decisions as to which items are VAT-exempted or VAT-free and which are not, and that is why those products are so small in number.

[Patricia Gibson]

The Minister is making a powerful case as to why VAT is an important source of revenue for the UK Government, and I do not think anybody would dispute that. But if she was to do as Members in the Chamber ask and remove VAT on sunscreen, can she tell us how much that one single measure would cost the Treasury?

[Victoria Atkins]

It is very difficult to calculate. Because of the way multinational companies such as Tesco conduct their VAT returns, it is difficult to break it down. Our concern is, as I say, a practical one about the impact. Each and every time I get asked to exempt a product from VAT—this is a regular occurrence, I promise, and I completely understand why Members of Parliament would wish for such matters to be exempted—I have to conduct this trade-off. It is incredibly difficult. I very much understand the intentions behind the campaign, but this is the thinking behind why we have thus far had to say no. Of course, we keep it under review.