Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what modelling his Department has undertaken on the impact of the rise in National Insurance Contributions and the removal of remaining covid-19 Government support schemes on businesses in the hospitality sector.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
Throughout the pandemic, the Government has worked closely with leaders in the hospitality sector and others to monitor the financial health of the most impacted sectors. This analysis has influenced decisions to provide a comprehensive £400 billion package of support, which provided a lifeline for many restaurants, pubs, and bars. The Government continues to evaluate the impact of these policies and engage with the sector.
Due to Government action and the resilience of business leaders across the industry, there are positive signs that the sector is recovering. Employment in the sector has reached pre-pandemic levels and vacancies are at record levels, which demonstrates that hospitality is back to usual form and creating jobs again.
On 21 February, the Prime Minister announced the government’s plans to live with the virus, paving the way for customers to return to offices and hospitality venues with confidence. As we move into the next phase, Government remains committed to supporting the sector to return to growth, including with a new temporary business rates relief for the retail, hospitality and leisure sectors worth almost £1.7 billion in 2022-23
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the total cost of the Business Rates relief introduced in March 2020 has been to the Treasury.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
According to the national non-domestic rates data collected by local authorities, the cost of the retail, hospitality, and leisure relief was £11.1 billion in 2020-21, and is expected to be £5.8 billion in 2021-22. This data is published by the Department for Levelling Up, Housing and Communities and can be found here: https://www.gov.uk/government/collections/national-non-domestic-rates-collected-by-councils
This support means that eligible properties paid no business rates for 15 months from 1 April 2020. Additionally, due to the 66 per cent capped relief which took effect on 1 July 2021, over 90 per cent of eligible businesses will see a 75 per cent reduction in their business rates bill across this entire financial year to next April.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the impact on business survival rates of the concurrent ending of the reduced rate of VAT, business rates support and rent protections.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has provided around £400 billion of direct support for the economy since the start of the pandemic, which has helped to safeguard jobs, businesses, and public services in every region and nation of the UK. This includes the £1 billion Omicron package announced in December 2021, which was focused on supporting the hospitality, leisure, and cultural sectors.
Now that we have returned to Plan A, and as individuals and businesses learn to live with Covid-19, it is right that this exceptional support comes to an end as planned. This is vital for a strong economy and to help rebuild the public finances. However, support is being withdrawn gradually, so that businesses can plan and adjust over time. For example, the rate of VAT for hospitality and tourism businesses was increased gradually to its current level of 12.5 per cent in October 2021 before reverting to its pre-pandemic level of 20 per cent as planned in March 2022.
The Government is aware that the high street faces long-term challenges and is committed to supporting the businesses that make our high streets and town centres successful. While the Government has provided unprecedented business rates support worth £16 billion to businesses in the retail, hospitality, and leisure sectors throughout the pandemic, it is right that we move back towards pre-pandemic levels of support now that restrictions have ended.
At Autumn Budget 2021, the Government announced a new temporary business rates relief set at 50 per cent up to a maximum of £110,000 per business for the retail, hospitality, and leisure sectors worth almost £1.7 billion in 2022-23. This will support the businesses that make our high streets and town centres successful to evolve and adapt to changing consumer demands until the next revaluation.
The multiplier will be frozen in 2022-23, a tax cut worth £4.6 billion over the next 5 years. This will support all ratepayers, large and small, meaning bills are 3 per cent lower than without the freeze.
On the topic of rent protections, following mandated closures during the Covid-19 pandemic, the Government introduced an eviction moratorium and related protection measures to protect businesses from eviction and insolvency. As a result, some businesses have accrued rental debts, estimated at a total of £1.5 billion as of March 2022, creating the risk of insolvencies and job losses, should these debts not be resolved through sustainable repayment plans. Many landlords and tenants have come to voluntary agreements on this rental debt. Where these agreements have not been reached, the Government is passing legislation this Spring to support the orderly resolution of these debts, including a set of principles for negotiation and a binding-arbitration backstop. This builds on a Code of Practice for commercial property relationships published by Government in November 2021, and sets out a clear path for both landlords and tenants to move from dispute to resolution.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the impact on businesses of the concurrent ending of the reduced rate of VAT, business rates support and rent protections.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has provided around £400 billion of direct support for the economy since the start of the pandemic, which has helped to safeguard jobs, businesses, and public services in every region and nation of the UK. This includes the £1 billion Omicron package announced in December 2021, which was focused on supporting the hospitality, leisure, and cultural sectors.
Now that we have returned to Plan A, and as individuals and businesses learn to live with Covid-19, it is right that this exceptional support comes to an end as planned. This is vital for a strong economy and to help rebuild the public finances. However, support is being withdrawn gradually, so that businesses can plan and adjust over time. For example, the rate of VAT for hospitality and tourism businesses was increased gradually to its current level of 12.5 per cent in October 2021 before reverting to its pre-pandemic level of 20 per cent as planned in March 2022.
The Government is aware that the high street faces long-term challenges and is committed to supporting the businesses that make our high streets and town centres successful. While the Government has provided unprecedented business rates support worth £16 billion to businesses in the retail, hospitality, and leisure sectors throughout the pandemic, it is right that we move back towards pre-pandemic levels of support now that restrictions have ended.
At Autumn Budget 2021, the Government announced a new temporary business rates relief set at 50 per cent up to a maximum of £110,000 per business for the retail, hospitality, and leisure sectors worth almost £1.7 billion in 2022-23. This will support the businesses that make our high streets and town centres successful to evolve and adapt to changing consumer demands until the next revaluation.
The multiplier will be frozen in 2022-23, a tax cut worth £4.6 billion over the next 5 years. This will support all ratepayers, large and small, meaning bills are 3 per cent lower than without the freeze.
On the topic of rent protections, following mandated closures during the Covid-19 pandemic, the Government introduced an eviction moratorium and related protection measures to protect businesses from eviction and insolvency. As a result, some businesses have accrued rental debts, estimated at a total of £1.5 billion as of March 2022, creating the risk of insolvencies and job losses, should these debts not be resolved through sustainable repayment plans. Many landlords and tenants have come to voluntary agreements on this rental debt. Where these agreements have not been reached, the Government is passing legislation this Spring to support the orderly resolution of these debts, including a set of principles for negotiation and a binding-arbitration backstop. This builds on a Code of Practice for commercial property relationships published by Government in November 2021, and sets out a clear path for both landlords and tenants to move from dispute to resolution.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the increase in national insurance contributions in 2022 on inflation.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
In its October Economic and Fiscal Outlook (EFO), the independent Office for Budget Responsibility (OBR) set out its assessment of the economic impact of government policies announced at the Budget and Spending Review. This includes the increase in National Insurance contributions, which the OBR notes has a small impact on inflation and results in prices being 0.1 per cent higher from 2023-24 onwards.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the potential effect of rising levels of inflation on small businesses.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Inflation has recently increased in many global economies, including the UK, pushed up by higher energy prices and global supply and demand imbalances.
We continue to monitor businesses’ ability to absorb rising costs and raise prices, which is easier at times of high demand (as is the case now).
Where cost pressures become more difficult to absorb for small businesses, there continues to be Covid-related business support available, such as guaranteed lending, tax reductions and grants.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the Budget on families where parents are unable to work in long-term employment.
Answered by Simon Clarke
The government is committed to helping low-income families with the cost of living. Support provided includes the new £500m Household Support Fund to help vulnerable households with costs for essentials such as food, clothing and utilities over this Winter. The fund is ringfenced so at least 50% will be spent on households with children.
Within the welfare system, the government is maintaining the increase to Local Housing Allowance rates for private renters on Universal Credit and Housing Benefit in cash terms in 2021-22. This increase was worth over an extra £600 on average in 2020-21 for more than 1.5 million households.
The government is also providing over £200 million per year through the Spending Review to continue the holiday activities and food programme, providing healthy food and enriching activities for disadvantaged children in England.
Further support has been put in place through the twelfth consecutive year of freezing fuel duty in 2022-23, with the average car driver paying around £15 less fuel duty per tank and saving a cumulative £1900 since 2011, compared to the pre-2010 escalator.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he made of the impact on credit scores (a) across different age groups, (b) in Feltham and Heston constituency and (c) England of the increase in debt from buy now, pay later products.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury does not hold information on the impact of Buy-Now Pay-Later product usage on credit scores.
On 21 October, the Government published a consultation document outlining its proposed approach to the regulation of Buy-Now Pay-Later products. The consultation document can be found at the following link, including details on how to respond: www.gov.uk/government/consultations/regulation-of-buy-now-pay-later-consultation.
The consultation closes on 6 January. Once the consultation has concluded, the Government will review responses and consider next steps.