Asked by: Ben Obese-Jecty (Conservative - Huntingdon)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment she has made of the potential benefit to the UK of joining the proposed Defence, Security and Resilience Bank.
Answered by Lucy Rigby - Chief Secretary to the Treasury
The UK announced that it is exploring setting up the Multilateral Defence Mechanism with Finland, the Netherlands and other partners by 2027. This will be designed to improve value for money and increase standardisation in the defence sector through joint procurement. It will enhance collaboration among allies and improve interoperability. It will aim to increase the availability of munitions and other critical capabilities when we need them most and aim to support a more resilient and efficient defence industrial sector, underpinned by more certainty of orders from aggregated demand through joint procurement from its members.
The Chancellor regularly discusses with NATO allies the need to meet the challenge jointly of increasing expenditure on our defence and resilience.
Asked by: Ben Obese-Jecty (Conservative - Huntingdon)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussion has she has had with NATO-Partner countries on membership of the proposed Defence, Security and Resilience Bank.
Answered by Lucy Rigby - Chief Secretary to the Treasury
The UK announced that it is exploring setting up the Multilateral Defence Mechanism with Finland, the Netherlands and other partners by 2027. This will be designed to improve value for money and increase standardisation in the defence sector through joint procurement. It will enhance collaboration among allies and improve interoperability. It will aim to increase the availability of munitions and other critical capabilities when we need them most and aim to support a more resilient and efficient defence industrial sector, underpinned by more certainty of orders from aggregated demand through joint procurement from its members.
The Chancellor regularly discusses with NATO allies the need to meet the challenge jointly of increasing expenditure on our defence and resilience.
Asked by: Sorcha Eastwood (Alliance - Lagan Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of the Approved Mileage Allowance Payment rate on small and medium-sized enterprises and mobile workers in rural regions, including in Northern Ireland.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
Asked by: Sorcha Eastwood (Alliance - Lagan Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her officials have had discussions with colleagues in the Northern Ireland Office on the adequacy of the Approved Mileage Allowance Payment rate of 45 pence per mile.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when the HGV road tax holiday will commence and finish; what the eligibility criteria are for that scheme; and how the application process will work.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The government will introduce a 12-month holiday from Vehicle Excise Duty (VED, also known as road tax). This will apply to the majority of HGVs renewing their VED between 1 July 2026 and 30 June 2027. Eligible vehicles will pay just £1 for their annual VED, saving £600 for a typical heavy lorry. Tax classes eligible include: standard HGV (tax class 1); trailer HGV (tax class 2); special types (tax class 57); combined transport (tax class 23); and island goods vehicles (tax class 16). If a vehicle is liable for the HGV levy, it will continue to be charged at the existing rate.
This temporary reduction in VED is in recognition of the key role the road haulage sector plays in transporting goods, including food, across the UK and its disproportionate exposure to fuel costs. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures from the Iran conflict spreading across the economy.
Asked by: Bradley Thomas (Conservative - Bromsgrove)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of increasing the VAT registration threshold on small businesses; and if she will consider raising the VAT registration threshold to support entrepreneurs.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This means the majority of UK businesses are not in the VAT system at all.
Any consideration of changes to the threshold would have to carefully balance potential impacts on small businesses, the economy as a whole, and tax revenues. Tax breaks reduce the revenue available for public services and must represent value for money for the taxpayer.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department's press release entitled Reeves to use Parliament to drive through power plants and infrastructure, published on 20 May 2026, what steps she is taking with Cabinet colleagues to maximise the use of domestic suppliers and manufacturers in nationally significant infrastructure and energy projects accelerated under the proposed reforms.
Answered by Lucy Rigby - Chief Secretary to the Treasury
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
By reducing delays and making the judicial review process faster, more predictable and more focused on genuine legal concerns, these reforms are expected to give investors greater confidence and support continued investment in infrastructure projects.
More broadly, this Government believes that it matters where things are made and who makes them and is reforming public procurement so that more of what the public sector buys supports UK-based businesses, including in critical industries.
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these infrastructure planning reforms. Further detail will be set out in due course.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department's press release entitled Reeves to use Parliament to drive through power plants and infrastructure, published on 20 May 2026, what safeguards will remain in place for local communities affected by projects designated as being of Critical National Importance.
Answered by Lucy Rigby - Chief Secretary to the Treasury
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
Under these reforms, projects designated as being of Critical National Importance would still be required to proceed through the normal Development Consent Order process, and existing arrangements for considering impacts and hearing from affected communities would remain in place. This route would apply only to energy projects that the Energy Secretary designates as of Critical National Importance, and any such designation would also require explicit parliamentary approval
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these reforms. Further detail will be set out in due course.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department's press release entitled Reeves to use Parliament to drive through power plants and infrastructure, published on 20 May 2026, if she will set out what role hon. Members will have in approving or scrutinising projects designated as being of Critical National Importance under the proposals.
Answered by Lucy Rigby - Chief Secretary to the Treasury
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
These proposals include a new route for Parliament to approve projects designated as Critical National Importance, providing greater certainty where the national interest is clearest. The route would apply only to energy projects identified by the Energy Secretary as Critical National Importance, and any such designation would require explicit parliamentary approval.
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these reforms. Further detail will be set out in due course.
Asked by: Euan Stainbank (Labour - Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of an increase in the SCAPE discount rate on police officers in the 1987 Police Pension Scheme.
Answered by Lucy Rigby - Chief Secretary to the Treasury
In line with the existing methodology, the Government announced on 19 May 2026 that the SCAPE discount rate is 2%+CPI.
HM Treasury is not the responsible authority for individual Public Service Pension Schemes. Regulation B7 of the Police Pension Scheme Regulations 1987 provides for commutation of pension to purchase lump sum and specifies that the rate is that set out by the Scheme Actuary. The factors were updated on 21 May 2026 to reflect the change to the SCAPE discount rate.