Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the potential benefit of zero-rating VAT on fuel oil to assist households that are reliant on fuel oil to heat their homes; and what plans they have to reduce VAT on fuel oil.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
This year the Government is providing over £37 billion in cost of living support, including helping people cope with the impact of higher energy bills, with £400 off their bills from October through the expansion of the Energy Bills Support Scheme (EBSS) and with millions of the most vulnerable households due to receive at least £1,200 in total.
Domestic fuels such as gas, electricity and heating oil are not subject to the standard rate of VAT at 20 per cent but to a reduced rate of VAT at only 5 per cent.
The Government keeps all taxes under review.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the RAC Fuel Watch data which show that the average UK petrol and diesel prices was around 191 pence per litre of petrol and 199 pence per litre of diesel as of June, what steps they are taking to reduce (1) fuel duty, and (2) VAT on fuel, to assist families and businesses with the increased cost of living.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The temporary 5p cut to duty on petrol and diesel represents a £2.4 billion tax cut in 2022-23, to help consumers with high fuel prices.
VAT is a broad-based tax on consumption and the 20% standard rate applies to most goods and services. It would cost over £6 billion to cut VAT on road fuel from 20% to 5%.
The Government keeps all taxes under review.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government when they plan to begin the review of the apprenticeship programme announced in the Spring Statement; and when they expect to publish a call for evidence.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The government’s ambition is to encourage greater levels of private sector investment in employee training, both for apprentices and for employees more generally.
At the Spring Statement, the Chancellor announced that he would consider whether further intervention is needed to encourage employers to offer the high-quality training the UK needs. This will include examining whether the current tax system – including the operation of the Apprenticeship Levy – is doing enough to incentivise businesses to invest in the right kinds of training.
The Chancellor will update the House further in the Autumn.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact on jobs of the 1.25 per cent rise in employers' national insurance contributions; and what support beyond the increase in Employment Allowance they will provide to avoid small businesses making staff redundant.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government has made several assessments of the impact of the introduction of the Health and Social Care Levy, which were published alongside the announcement. These include the distributional analysis of the impact of the combined tax and spending announcements, a technical annex in our plan for health and social care and a Tax Information and Impact Note.
Further, the Office for Budget Responsibility set out their assessment of the economic effects of the Levy, including the impact on labour supply and wages, in the Economic and Fiscal Outlook published at Autumn Budget 2021.
It is worth noting that the Government is increasing the Employment Allowance (EA) for the third time since its introduction in 2014, demonstrating an enduring commitment to supporting small businesses. Around 495,000 businesses will benefit from the increase to the EA announced at Spring Statement 2022, including around 50,000 businesses which will be taken out of paying National Insurance contributions (NICs) and the Health and Social Care Levy entirely. In total, this means that from April 2022, 670,000 businesses will not pay NICs and the Levy due to the EA.
In addition, the Government has prioritised support for Small and Medium-sized Enterprises (SMEs) by cutting business rates by 50 per cent for retail, hospitality, and leisure businesses, providing a 90 per cent subsidy for world class management training and 90 per cent for apprenticeships, and supporting SMEs to invest and grow by increasing the Annual Investment Allowance to £1 million and subsidising the cost of new software up to £5,000.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the improvement in energy efficiency of homes that could be achieved if the current rate of VAT on retrofit building work were to be reduced to (1) a five per cent rate, and (2) a zero rate; and what plans they have, if any, to do so.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
A reduced rate of VAT at 5 per cent is already maintained for some residential renovations, including those that increase the number of dwellings or renovating properties that have been empty for two years or more, subject to certain conditions.
Expanding the reliefs that are already available would come at a cost to the Exchequer. Expanding this reduced rate to include all renovations and repairs is estimated to cost the Exchequer at least £3.75 billion a year.
While all taxes are kept under review, the Government has no current plans to review the VAT treatment of retrofit building work.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what representations they have received from industry and consumer groups to end or suspend VAT on fuel bills; and what steps they intend to take on this matter.
Answered by Viscount Younger of Leckie - Parliamentary Under-Secretary (Department for Work and Pensions)
In recognition of the fact that families should not have to bear all the VAT costs they incur to meet their needs, domestic fuels such as gas and electricity are already subject to the reduced rate of 5 per cent of VAT. The Government keeps all taxes under review but going further would impose significant additional pressure on the public finances, to which VAT makes a significant contribution.
The Government has introduced a raft of measures to support vulnerable households with the cost of energy, including increasing the Warm Home Discount, Winter Fuel Payments, and Cold Weather Payments. This is alongside introducing the £500 million Household Support Fund and giving working families on Universal Credit an average of £1,000 more per year.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government when they intend to begin the consultation on the regulation of buy-now-pay-later services, announced following the Woolard Review – A review of change and innovation in the unsecured credit market, published on 2 February.
Answered by Lord Agnew of Oulton
On 2 February, the Government announced its intention to regulate Buy-Now-Pay-Later products. On 17 March, the Government tabled an amendment to the Financial Services Bill (now Act) to allow the Government to bring Buy-Now-Pay-Later products into the scope of FCA regulation in a proportionate way. The Government is now working to publish a consultation document soon.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Financial Conduct Authority's finding on 10 August that a pensions adviser was “seriously incompetent” in his work providing advice to 183 members of the British Steel Pension Scheme, what plans they have to set up an industry-wide redress scheme for steelworkers given poor pension transfer advice.
Answered by Lord Agnew of Oulton
This is an operational matter for the Financial Conduct Authority (FCA), who are operationally independent from Government.
The question has been passed on to the FCA who will reply directly to the Noble Lord by letter. A copy of the letter will be placed in the Library of the House.Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the level of personal debt of (1) entrepreneurs, and (2) company directors of small businesses, who have not been eligible for assistance through the Coronavirus Job Retention Scheme; and what assessment they have made of the proportion of such debt which has been used to keep businesses afloat.
Answered by Lord Agnew of Oulton
The Coronavirus Job Retention Scheme (CJRS) has helped to pay the wages of people in 11.5 million jobs across the country, and the Self-Employment Income Support Scheme (SEISS) has paid out £24.5 billion in grants to 2.8 million self-employed individuals.
Both of these schemes were designed with two principles in mind. First, the need to target support at those who need it most. Second, the need to protect money against error, fraud and abuse, whilst reaching as many people as possible. The Government recognises that some of the eligibility criteria and conditions needed to ensure that the CJRS or SEISS work for the vast majority of people have meant that some may not qualify for them.
Those ineligible for the SEISS or CJRS may still be eligible for other elements of the unprecedented financial support available, such as tax deferrals and billions in loans and business grants.
The Government loan guarantee schemes (including the Bounce Back Loan Scheme (BBLS)) have provided unprecedented support to businesses, with over 1.5 million loans worth over £75bn. Under BBLS no repayments are due from the borrower for the first 12 months of the loan, giving businesses the breathing space they need during this difficult time. In addition, the Government covers the first 12 months of interest payments charged to the business by the lender.
To give businesses further support and flexibility in making their BBLS repayments, the Government has implemented the “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their BBLS facility over ten years. The Government has also made the full repayment holiday available to borrowers from the first repayment. Together, the 12-month payment holiday and interest-free period for borrowers, along with the PAYG options, provide a generous support package giving businesses the time to get back on their feet. Businesses concerned about repayment should contact their lender to discuss the options available to them.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government when they expect to publish the results of their fundamental review of business rates; and when they expect that proposals for reform resulting from that review will be available for parliamentary scrutiny.
Answered by Lord Agnew of Oulton
As set out in the Government’s Interim Report, published in March 2021, the final report of the Fundamental Review will be published by Autumn 2021.