Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what his policy is on the minimum age for withdrawing a private pension; and what plans he has to bring forward legislative proposals to introduce legislation on that minimum age.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
In 2014 the government announced it would increase the minimum pension age from age 55 to age 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.
That announcement set out the timetable for this change well in advance to enable people to make financial plans and will be legislated for in due course.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what modelling has been undertaken of the effect on businesses in Wales of changes to customs processes and procedures required as a consequence of (a) a trade agreement and (b) no trade agreement with the EU.
Answered by Jesse Norman
In October 2019, HMRC published their updated impact assessment for the movement of goods for if the UK leaves the EU without a deal (https://www.gov.uk/government/publications/hmrc-impact-assessment-for-the-movement-of-goods-if-the-uk-leaves-the-eu-without-a-deal/hmrc-impact-assessment-for-the-movement-of-goods-if-the-uk-leaves-the-eu-without-a-deal-third-edition). Should a deal be agreed with the EU, the Government will publish an impact assessment alongside introducing legislation to give effect to that deal.
The UK is leaving the EU’s customs union and single market at the end of this year, which will inevitably mean extra processes required for UK-EU trade. Most customs processes are electronic and done away from the border, including getting an EORI number and making plans for completing customs declarations, where traders will need a customs agent or their own software. Many businesses have already begun factoring in these new processes as part of their preparations for life outside the customs union and the Government urges others to do the same.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the proposed changes to the formula for calculating the Retail Price Index, set out in his Department's response to the Consultation on the Reform of RPI Methodology, on the risk of insolvency for employers, as a result of the need to address the shortfall in funding of their workplace pension schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
On 25 November, the Government and UK Statistics Authority (UKSA) published their response to the consultation on the timing of reform to the Retail Prices Index (RPI). Owing to shortcomings in its calculation, UKSA intends to bring the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI.
The consultation launched at the Budget on 11 March 2020. Originally, the consultation was set to run for six weeks, closing on 22 April 2020. However, due to the impacts of the coronavirus (COVID-19) pandemic, the Chancellor and UKSA Board decided to extend the consultation to 21 August 2020. At the close of the consultation, the Government and UKSA had received 831 written responses. As Economic Secretary to the Treasury, in July 2020 I chaired two roundtables comprising representatives of index-linked gilt holders, to hear their views on the impact of the timing of reform. The details of these meetings can be found in Annex D of the response document.
As detailed in the response document, the holders of a majority of index-linked gilts are seeking to match inflation-linked liabilities. This means that they use the returns from index-linked gilts to hedge against inflation-linked liabilities. Such investors include some defined benefit (DB) pension schemes. How such schemes’ funding positions will be impacted by reform will depend on the extent to which they are hedged and the nature of their liabilities. For some DB pension schemes, a deterioration in their funding position means that existing deficits may increase, or that surpluses may be reduced. The vast majority of index-linked gilt investors who responded to the consultation noted a strong preference for UKSA’s proposal to be implemented as late as possible, i.e. in 2030, in order to allow index-linked gilt holders as much time as possible to adjust to the reform of the RPI and to minimise any potential negative impacts they may face.
As part of the response, the Chancellor announced that while he sees the statistical arguments of UKSA’s intended approach to reform, in order to minimise the impact of reform on the holders of index-linked gilts, he will be unable to offer his consent to the implementation of such a proposal before the maturity of the final specific index-linked gilt in 2030. As it stated in the response, it is UKSA policy to address the shortcomings of RPI in full at the earliest practical time. The change proposed can legally and practically be made by UKSA in February 2030.
For further information please see the consultation response at: https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that people entering into new index-linked deals are made aware of the proposed changes to the formula for calculating the Retail Price Index, set out in his Department's response to the Consultation on the Reform of RPI Methodology.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
On 25 November, the Government and UK Statistics Authority (UKSA) published their response to the consultation on the timing of reform to the Retail Prices Index (RPI). Owing to shortcomings in its calculation, UKSA intends to bring the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI.
The Government and UKSA engaged directly with a number of users and stakeholders to discuss the consultation. The consultation response document has been published and is available on the Government and UKSA’s websites, as below:
Under legislation, how RPI is changed is a matter for UKSA alone. This reflects the important principle established in the Act that UKSA’s judgement on statistics should be independent of Government. After expert advice from the National Statistician and following public consultation, UKSA intends to address the shortcomings in RPI by bringing in the methods and data sources of CPIH. This intended approach was made public in September 2019. Following consultation, UKSA confirmed publicly that the change proposed can legally and practically be made by UKSA in February 2030. It is the role of UKSA – as set out in legislation - to promote and safeguard official statistics.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the proposed changes to the formula for calculating the Retail Price Index, set out in his Department's response to the Consultation on the Reform of RPI Methodology, on the remuneration of members of defined benefits pension schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
On 25 November, the Government and UK Statistics Authority (UKSA) published their response to the consultation on the timing of reform to the Retail Prices Index (RPI). Owing to shortcomings in its calculation, UKSA intends to bring the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI.
The Government and UKSA are mindful of the widespread use of RPI in the economy, and, as such, sought views in the consultation on the broader impacts of reform. The Government and UKSA received approximately 550 responses from members of defined benefit (DB) pension schemes whose benefits are linked to RPI.
It is apparent that some DB pension scheme members will be affected by UKSA’s reform of RPI. The effect of reform on the members of such schemes will depend on whether their benefits are linked to RPI under the trust deed and rules of the scheme.
The announcement in the response by the Chancellor and Authority Chair means that reform will not be implemented before 2030. The Government keeps the occupational pensions system under review and will continue to do so.
For further information please see the consultation response at: https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, which stakeholders he or his ministerial colleagues have met since December 2019 to discuss changing the formula for calculating the Retail Price Index.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Retail Prices Index (RPI) is a measure of inflation with a number of shortcomings. To address these shortcomings, the UK Statistics Authority (UKSA) has made a proposal to reform RPI by bringing the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI. Owing to the use of RPI in specific index-linked gilts, prior to 2030 the Chancellor’s consent to this proposal is required before it can be implemented.
As outlined in the consultation document (https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology), factors related to the impact of the proposal on the holders of index-linked gilts are likely to be relevant to the Chancellor’s decision on whether he would offer his consent to such a proposal before 2030. At the Budget in March, the government and UKSA launched a consultation to seek views on whether UKSA’s proposal should be implemented at a date other than 2030, and, if so, when between 2025 and 2030.
The consultation closed for responses on 21 August. The government and UKSA will respond to the consultation in the autumn. As Economic Secretary to the Treasury, in July 2020 I chaired two roundtables comprising representatives of index-linked gilt holders to hear their views on the impact of the timing of reform. Further details of these meetings will be published as part of the response to the consultation.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has undertaken of the effect that changing the calculation formula for Retail Price Index will have on private pension income.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Retail Prices Index (RPI) is a measure of inflation with a number of shortcomings. To address these shortcomings, the UK Statistics Authority (UKSA) has made a proposal to reform RPI by bringing the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI. Owing to the use of RPI in specific index-linked gilts, prior to 2030 the Chancellor’s consent to this proposal is required before it can be implemented.
At the Budget in March, the government and UKSA launched a consultation to consider whether UKSA’s proposal should be implemented at a date other than 2030, and, if so, when between 2025 and 2030. The consultation closed for responses on 21 August. As part of the consultation, the government has sought views on the broader impacts of the proposed reform of RPI.
The government and UKSA will respond to the consultation in the autumn.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will outline the Barnett consequentials for the Welsh Government resulting from the £546m England only adult winter social care plan announced by the Department of Health and Social Care.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
To help the Welsh Government manage their Covid-19 response, the UK Government made an unprecedented upfront funding guarantee on 24 July 2020. This guarantees the Welsh Government will receive at least £4bn in additional resource funding this year on top of the funding set out at the Spring Budget.
It is for the Welsh Government to decide how to allocate this funding across their devolved responsibilities.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what impact assessment his Department has undertaken on consumer choice as a result of changing Small Brewers Relief.
Answered by Kemi Badenoch - President of the Board of Trade
Small Brewers Relief will not be removed for small and medium sized breweries under the Government’s proposed reforms.
Over 80% of all breweries will not experience any changes, therefore the Government considers small brewers will continue to prosper.
Medium-sized brewers will benefit from the smoother transition to the main duty rate offered by the Government’s reforms, and so the Government expects their viability to increase.
Accordingly, the Government expects consumer choice to increase as smaller breweries find it easier to expand and are not limited by arbitrary ‘cliff-edges’.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on community golf clubs of prohibiting the use of red diesel.
Answered by Kemi Badenoch - President of the Board of Trade
At Budget 2020, the Chancellor announced that the Government will remove the entitlement to use red diesel from April 2022, except in agriculture, fish farming, rail and for non-commercial heating (including domestic heating). This change will ensure that most businesses using diesel in the UK pay the standard fuel duty rate on diesel, which more fairly reflects the harmful impact of the emissions they produce. These reforms are also designed to ensure that the tax system incentivises users of diesel to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives or use less fuel.
The Government recognises that this will be a significant change for some businesses. It launched a consultation in July to make sure it has not overlooked any exceptional reasons why other sectors should be allowed to continue to use red diesel beyond April 2022. As part of this, the Government is seeking information from affected users on the expected impact of these tax changes.