Oral Answers to Questions

Kemi Badenoch Excerpts

Tuesday 26th January 2021 Commons Chamber

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

What discussions he has had with representatives of the (a) retail and (b) aviation industries on the VAT retail export scheme and airside extra statutory concessions.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

During the consultation on duty free and tax-free goods carried by passengers in 2020, the Government engaged extensively with various stakeholders and carefully considered 73 consultation responses. I have continued to meet stakeholders, including retail and aviation representatives, following our announcement.

[Gavin Newlands [V]]

Given the deep trouble within retail and aviation, with Debenhams one of many chains disappearing from high streets with the loss of tens of thousands of jobs and, as the Minister will be aware with Stansted and its importance for employment in her constituency, aviation by and large grounded, does she not accept it was a mistake to scrap the VAT retail export scheme and the extra-statutory concessions, both of which brought much needed revenue to the retail sector at airports, which is now lost from the economy, possibly for good?

[Kemi Badenoch]

We do not accept that. The independent Office for Budget Responsibility set out its assessment of the fiscal impact of the withdrawal of the VAT RES scheme, factoring in a higher than usual elasticity to account for spending on luxury goods. Its estimate is that this will result in a significant Exchequer saving of about £400 million per year. On airports, we recognise the challenges the aviation sector is facing as it recovers from the impacts of covid-19. We have supported the sector throughout the pandemic and continue to do so. This includes the recently announced airport and ground operator support scheme, which will provide eligible firms with support of up to £8 million per claimant.

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[Henry Smith (Crawley) (Con)]

When he plans to conclude his consultation on air passenger duty.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The consultation on aviation tax reform has been delayed in recognition of the unprecedented circumstances that the aviation industry is currently facing. However, I will update hon. Members on the timing of the consultation in due course.

[Henry Smith [V]]

The United Kingdom charges the highest air passenger duty of any country in the developed world. Now that we have left the EU, domestic air passenger duty is something that we can alter. As we seek to recover from the covid-19 pandemic and take the advantages of a global Britain, can we have an early review of this tax, which is a pressure on our industry?

[Kemi Badenoch]

The Government recognise the important role that the aviation sector plays in the UK economy. The sector can draw on the wide range of support measures available, including the recently announced airport and ground operations support scheme, which will provide eligible firms with support of up to £8 million per claimant. However, I reassure my hon. Friend that we remain committed to delivering the consultation, and will look to proceed once the challenging circumstances that the sector is currently facing have eased.

[Mr David Jones (Clwyd West) (Con)]

What steps he has taken to help ensure adequate funding for the NHS in Wales.

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[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The Government recognise the significant impact of covid-19 on every region and nation of the UK. I can assure hon. Members across the House that levelling up remains a key priority for the Government. That is why the spending review also announced longer-term measures to support every region and nation, including a new £4 billion levelling-up fund to invest in local infrastructure priorities.

[Graham Stringer]

It is good to hear that the Government are still committed to levelling up, but all the academic studies that have been done have shown that covid has disproportionately affected the regional economies, with Greater Manchester the third most badly affected region in the country. Those regions need more support, but Transport for the North and Northern Powerhouse Rail are being cut; is that not going in exactly the opposite direction?

[Kemi Badenoch]

I would dispute the hon. Gentleman’s claims. We have taken unprecedented steps to support people and businesses around the country. We have supported 19,100 jobs in his constituency through the coronavirus job retention scheme. Greater Manchester Combined Authority has been allocated £54.2 million from the Getting Building fund for a wide-ranging package of projects. We have also provided over £170 million for the Greater Manchester-Preston city region and Liverpool city region to improve public transport. We have also supported the regeneration of 33 towns in the north-west through the towns fund. There is a lot that is happening on levelling up. If he would like me to write to him to explain everything that we have done in his region, I am happy to do so.

[Mrs Maria Miller (Basingstoke) (Con)]

What comparative assessment his Department has made of the effect of Government financial support during the covid-19 outbreak on (a) women and (b) men on low to moderate incomes.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The impact of tax and welfare policy is best analysed at the whole-household level. As the Institute for Fiscal Studies has said, because most people live in households with others and we do not know how incomes are shared, it is very hard to look at effects separately for many men and women. That is why the Government support has been targeted at the most vulnerable. Our distributional analysis published last year shows that the Government’s covid-19 financial support protected the poorest households’ incomes the most as a proportion of their income.

[Mrs Miller [V]]

The pandemic has been a difficult time for pregnant women in work, and one in four have faced discrimination, including being unlawfully singled out for redundancy—a problem not confined to the pandemic. Will my hon. Friend look again at how other countries tackle this problem and consider adopting Germany’s approach of protecting pregnant women from redundancy, which would also give families much-needed financial stability at what can be a very challenging time?

[Kemi Badenoch]

We are aware of the difficulties that families are experiencing during the pandemic and we have put many measures in place to look at this, but if my right hon. Friend has examples of specific schemes happening across the world that she would like me to look at, I am happy to do so within my other role as Minister for Equalities.

[Craig Tracey (North Warwickshire) (Con)]

What fiscal steps his Department is taking to support local authorities during the covid-19 outbreak.

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[Matt Vickers (Stockton South) (Con)]

Teesside is on the up. It is a place with untapped potential, skills and expertise, and a place with boundless ambition that will play host to the biggest economic success story of the next decade. Can my right hon. Friend think of anywhere better to host Treasury North than one of the country’s first free ports?

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

I thank my hon. Friend for his question. He is a doughty champion for his region and he should know that we remain focused on the commitment we made at Budget 2020 to have 750 roles across the economic campus by the end of the Parliament. The Treasury is still considering a range of location options for the new campus. We want to ensure that the chosen location supports our wider levelling up agenda, but we will certainly take his comments and representations into account.

[Lilian Greenwood (Nottingham South) (Lab) [V]]

The Government claim that their central economic mission is to level up. Can the Chancellor assure me that his Government will deliver HS2 in full, including the whole of the eastern leg, because this will be the litmus test of their real commitment to levelling up?

[Sarah Atherton (Wrexham) (Con)]

Wrexham is a town partly founded on brewing. It is home to four breweries and 64 pubs; the figure pre-covid. The industry supports nearly 1,700 jobs and generates £11 million in taxes. While hospitality businesses such as the Magic Dragon Brewery Tap tell me that the UK Government’s furlough scheme and wider support packages have been a lifeline, their future remains bleak as the pandemic rolls into a second year. Will my right hon. Friend the Chancellor in his forthcoming Budget consider deferring business rates and VAT payments even further, so pubs can have a fighting chance of pulling another pint and keeping the ales in Wales?

[Kemi Badenoch]

The Government understand that this is a very challenging time for the UK hospitality sector, and we are constantly reviewing the package of covid-19 support. In order to ensure that decisions are made to meet these challenges, we will outline plans for 2021-22 business rates relief early this year, but my hon. Friend should let her constituents know that for existing tax liabilities the VAT deferral new payments scheme will allow businesses with deferred VAT to spread their payments over up to 11 equal payments to 31 March 2022 interest-free.

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

During the global health pandemic, it is worth noting that paid leave following a bereavement is entirely at the discretion of employers. Leave experienced by employees costs the UK economy £22 billion a year and the Treasury nearly £8 billion a year, with those in lowest-paid jobs much less likely to have paid bereavement leave. In his upcoming Budget what consideration will the Chancellor give to statutory paid bereavement leave for all workers who lose a close family member?

[Mark Pawsey (Rugby) (Con) [V]]

  We have heard many times this morning about the very welcome support the Chancellor has provided to hospitality businesses required to close during the pandemic. However, suppliers to the sector are dependent on its success, and many have seen dramatic falls in sales. Ahead of getting hospitality up and running again, is there any additional support he can provide at this particularly challenging time?

[Kemi Badenoch]

My hon. Friend raises a point mentioned by several Members about the difficulties businesses in the hospitality sector and their supply chain have faced during the pandemic. He can tell his constituents that £1.6 billion is being made available for local authorities to support businesses that are ineligible for closed business grants but that may still be impacted by restrictions, and local authorities have discretion to determine how much funding to provide to businesses and the flexibility to target local businesses that are important to their local economies, which could include businesses in the supply chains for retail, hospitality and leisure.

[Mr Virendra Sharma (Ealing, Southall) (Lab) [V]]

Some small businesses in my constituency cannot access the support they need to continue to employ staff and survive. The Government’s incomplete guidance to local authorities has left that gap in support. Will the Minister fix that flaw in the system and commit to help small businesses today?