Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they will introduce a zero rate of VAT for repairs of rural churches.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
VAT is a broad-based tax on consumption and the twenty per cent standard rate applies to most goods and services. Whilst there are exceptions to the standard rate, these have always been limited by both legal and fiscal considerations.
The Department for Culture, Media and Sport already administer the Listed Places of Worship Grant Scheme. This aims to redress financial shortfalls by providing grants towards VAT paid on repairs and maintenance to the nation's listed places of worship. With annual funding increased to £42 million per annum, the scheme handles around 7,000 claims per annum and has made grants totalling over £300 million to date.
Going further by zero rating all repairs of rural churches would impose significant additional pressure on the public finances to which VAT makes a significant contribution.
There are no plans to introduce a new VAT relief for the repair of rural churches. However, the Government keeps all taxes under review.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they plan to take, if any, to set up a rural banking hub to avoid a lack of banking provision within ten miles.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Decisions on opening and closing branches are taken by the management team of each bank on a commercial basis, which it would be inappropriate for the Government to intervene in.
Guidance from the Financial Conduct Authority (FCA) sets out its expectation of firms when closing a branch; they must carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs and consider possible alternative access arrangements. This will ensure the implementation of closure decisions is done in a way that treats customers fairly.
An alternative for those who prefer to conduct their everyday banking face-to-face is the Post Office, which enables customers to carry this out at 11,500 post offices across the UK. The Post Office is required by the Department for Business and Trade to ensure that 95% of the total rural population across the UK to be within 3 miles of their nearest Post Office outlet.
New shared Banking Hubs are also being introduced providing cash and basic banking services, and dedicated space where community bankers from major banks can meet customers of that bank. Banking Hubs are a commercial initiative provided by participating retail banks and building societies in partnership with the Post Office. Decisions regarding the operation and location of Banking Hubs are taken by the parties involved.
Regarding access to cash, the government legislated to protect access to cash services through the Financial Services and Markets Act 2023. Following this, the government recently published a policy statement. This included setting the government’s current understanding that the vast majority of people in predominately rural areas have access to cash within 3 miles of where they live, while the vast majority of people in predominately urban areas have access to cash within 1 mile of where they live. This is based on FCA analysis and concerns access to cash services in general rather than bank branches. The policy statement sets out that the FCA, as responsible regulator, should seek to maintain this distribution of cash access services, while recognising that cash needs may differ by location and change over time. The government’s policy statement is available on gov.uk.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what provisions are in place to support customers in the event of a rural bank closure with no bank branch available within three miles.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Decisions on opening and closing branches are taken by the management team of each bank on a commercial basis, which it would be inappropriate for the Government to intervene in.
Guidance from the Financial Conduct Authority (FCA) sets out its expectation of firms when closing a branch; they must carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs and consider possible alternative access arrangements. This will ensure the implementation of closure decisions is done in a way that treats customers fairly.
An alternative for those who prefer to conduct their everyday banking face-to-face is the Post Office, which enables customers to carry this out at 11,500 post offices across the UK. The Post Office is required by the Department for Business and Trade to ensure that 95% of the total rural population across the UK to be within 3 miles of their nearest Post Office outlet.
New shared Banking Hubs are also being introduced providing cash and basic banking services, and dedicated space where community bankers from major banks can meet customers of that bank. Banking Hubs are a commercial initiative provided by participating retail banks and building societies in partnership with the Post Office. Decisions regarding the operation and location of Banking Hubs are taken by the parties involved.
Regarding access to cash, the government legislated to protect access to cash services through the Financial Services and Markets Act 2023. Following this, the government recently published a policy statement. This included setting the government’s current understanding that the vast majority of people in predominately rural areas have access to cash within 3 miles of where they live, while the vast majority of people in predominately urban areas have access to cash within 1 mile of where they live. This is based on FCA analysis and concerns access to cash services in general rather than bank branches. The policy statement sets out that the FCA, as responsible regulator, should seek to maintain this distribution of cash access services, while recognising that cash needs may differ by location and change over time. The government’s policy statement is available on gov.uk.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of any distortion to the housing market caused by VAT on the renovation and restoration of existing homes as opposed to VAT exemption for the building of new homes; and what plans they have, if any, to address such distortion.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The construction of certain new-build properties, including residential buildings, is subject to a VAT zero rate to encourage the construction of new homes. A reduced rate of VAT at five per cent is also maintained, subject to certain conditions, for residential renovations. This includes conversions of buildings from one residential use to another, conversions from commercial to residential use, and the renovation of properties that have been empty for two years or more.
Extending this VAT relief would impose additional pressure on the public finances to which VAT makes a significant contribution. As such, the Government has no plans to introduce a VAT relief on the renovation and restoration of existing homes; however, the Government keeps all taxes under review.
A temporary zero rate (up to April 2027) also applies to installations of qualifying energy saving materials, such as insulation, solar panels and heat pumps into residential accommodation. This relief is targeted at materials that specifically improve the energy efficiency or reduce carbon emission from a residential property.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the access to cash in rural areas for (1) vulnerable residents, such as the elderly and infirm, and (2) small businesses.
Answered by Lord Harlech - Lord in Waiting (HM Household) (Whip)
The government recognises that while the transition towards digital banking and payments brings many opportunities, cash continues to be used by many people, including those who may be in vulnerable groups, and small business across the UK.
The Financial Conduct Authority (FCA) has a considerable evidence base on cash provision and use across the UK. Analysis that was published by the FCA in June 2022 shows that, as of the end of 2021, over 95% of the population are within two kilometres of a free-to-use cash access point, such as a free-to-use ATM, bank branch or Post Office branch. Additional breakdowns by category of cash facility and areas are published on the FCA’s website.
The government is currently taking legislation to protect access to cash across the UK through Parliament as part of the Financial Services and Markets Bill 2022. The legislation will establish the FCA as the lead regulator for access to cash with responsibility and powers to seek to ensure reasonable provision of withdrawal and deposit facilities.
As part of its responsibilities, the FCA will be granted powers to seek to address any local deficiencies in the provision of access to cash facilities that it has identified and considers to be significant. The government’s view is that this will allow for consideration of local circumstances in all parts of the UK. This will result in a regulatory framework that will support the ongoing assessment of cash needs and provision at both a nationwide and local level.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what data they collect on the average distances a resident in a rural community must travel to access (1) a bank, and (2) a cash machine.
Answered by Lord Harlech - Lord in Waiting (HM Household) (Whip)
The government recognises that while the transition towards digital banking and payments brings many opportunities, cash continues to be used by many people, including those who may be in vulnerable groups, and small business across the UK.
The Financial Conduct Authority (FCA) has a considerable evidence base on cash provision and use across the UK. Analysis that was published by the FCA in June 2022 shows that, as of the end of 2021, over 95% of the population are within two kilometres of a free-to-use cash access point, such as a free-to-use ATM, bank branch or Post Office branch. Additional breakdowns by category of cash facility and areas are published on the FCA’s website.
The government is currently taking legislation to protect access to cash across the UK through Parliament as part of the Financial Services and Markets Bill 2022. The legislation will establish the FCA as the lead regulator for access to cash with responsibility and powers to seek to ensure reasonable provision of withdrawal and deposit facilities.
As part of its responsibilities, the FCA will be granted powers to seek to address any local deficiencies in the provision of access to cash facilities that it has identified and considers to be significant. The government’s view is that this will allow for consideration of local circumstances in all parts of the UK. This will result in a regulatory framework that will support the ongoing assessment of cash needs and provision at both a nationwide and local level.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government under what conditions a formal complaint against a financial service provider may be considered not a regulated activity by the Financial Ombudsman Service; and what forms of redress consumers have against financial malpractice by financial service providers.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Financial Conduct Authority (FCA) dispute resolution rules set out what complaints the Financial Ombudsman Service is able to look at. These are set out in the DISP rules in the FCA Handbook. These rules provide that the Financial Ombudsman Service (FOS) can consider complaints about regulated activities but also certain other activities which are not regulated activities. DISP 2.3.1R sets out what activities the FOS’s Compulsory Jurisdiction covers. https://www.handbook.fca.org.uk/handbook/DISP/2/3.html
The FOS was set up by Parliament to resolve complaints between financial businesses and their customers quickly and with minimum formality, on the basis of what is, in the ombudsman’s opinion fair and reasonable in all the circumstances of the case. Where a complaint is determined in favour of the complainant, the FOS can make a money award in favour of the complainant or direct the businesses to take certain other steps.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what is the tax situation regarding the lump sum payments extended through the agriculture regulations.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government intends to introduce legislation to provide clarity that payments under the Lump Sum Exit Scheme will be treated as capital in nature and will be subject to capital gains tax, or corporation tax in the case of incorporated entities. The existing capital gains reliefs will be available where the qualifying criteria are met.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what long-term arrangements they will put in place to assist (1) low-income households, and (2) pensioners on fixed incomes, to alleviate their domestic energy costs.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government recognises many households will need support to help deal with the rising cost of energy prices. Therefore, we are providing support worth £9.1bn in 2022-23 composed of:
There is also our £500m Household Support Fund which will help vulnerable households, including pensioners, with the costs of essentials this winter – local authorities will ensure it reaches those who need it most, and 50% of the funding is ringfenced for households with children.
This is on top of wider support available for vulnerable households, elderly and low-income people this winter. These schemes include the Warm Home Discount, which is being expanded to 3m people and increased to £150, up to £300 Winter Fuel Payment for all households with at least one member above State Pension age and a £25 per week Cold Weather Payment. These measures will help ensure those most vulnerable are better able to heat their homes over the winter.
In addition to these measures, we’re also providing £3bn over this Parliament to help more than half a million lower income homes become more energy efficient, saving them £290 per year on average.
In the longer term, the Government will look to reduce our reliance on global gas prices by moving to a cleaner, more resilient energy system and improve energy efficiency to help keep bills down.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what steps they will take to repay the rebate announced to help alleviate household energy bills; and what assessment they have made of the impact on households as a result of such repayment.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
In recognition of the increase in energy costs and the impact this will have on households, the Government is providing significant financial support – up to £350 – to the majority of households. One element of this is a £200 discount for households delivered via their energy bill this autumn.
We expect households will pay back the discount from 2023 – when energy prices are expected to be lower - through an increase to standing charges on their bills of around £40 per annum over five years.
This approach is fiscally responsible while also helping customers manage the unprecedented increase in energy bills by spreading the increased costs of global prices over time. The policy will provide a significant discount to bills this year whilst gas prices are at historic highs.
The government will explore this issue through a public consultation run by the Department for Business Energy and Industrial Strategy (BEIS) in the spring.
This policy is on top of wider support available for vulnerable households, elderly and low-income people this winter. These schemes include the Warm Home Discount, which is being expanded to 3m people and increased to £150, up to £300 Winter Fuel Payment for all households with at least one member above State Pension age and a £25 per week Cold Weather Payment. These measures will help ensure those most vulnerable are better able to heat their homes over the winter.
There is also our £500m Household Support Fund which will help vulnerable households, including pensioners, with the costs of essentials this winter – local authorities will ensure it reaches those who need it most, and 50% of the funding is ringfenced for households with children.
In addition to these measures, we’re also providing £3bn over this Parliament to help more than half a million lower income homes become more energy efficient, saving them £290 per year on average.