Angus Brendan MacNeil

I refer the hon. Member to the oral statement made by the Chancellor of the Duchy of Lancaster on 23 September about the Reasonable Worst Case Scenario planning assumptions which were published to support these planning activities.

Responsibility for offshore wind leasing is a devolved area.

The Government has not made any assessment of the Scottish Crown Estate’s ScotWind leasing programme. However, Ministers and officials regularly engage with the Scottish Government.

The Department does not have the legal power to require the holder of a Contract for Difference to sell all or most of their stake in a project under these circumstances.

The Secretary of State can take into account an Applicant’s failure to demonstrate that they have implemented a previously approved supply chain plan when considering a plan for a future CfD Allocation Round. This could lead to the Applicant (and any partner(s) with a 20% share or greater) having their supply chain plan rejected and therefore be prevented from entry to that CfD Allocation Round.

We recently consulted on potential changes to the CfD scheme for the next allocation round, due to be held in 2021. This included questions around the potential merits of strengthening the powers to fail supply chain plans, including the remedies the Department could consider for Applicants who do fail, and of linking compliance with an approved supply chain plan with CfD payments. We will publish the Government’s response to the consultation in due course.

The Department does not have the legal power to require the holder of a Contract for Difference to sell all or most of their stake in a project under these circumstances.

The Secretary of State can take into account an Applicant’s failure to demonstrate that they have implemented a previously approved supply chain plan when considering a plan for a future CfD Allocation Round. This could lead to the Applicant (and any partner(s) with a 20% share or greater) having their supply chain plan rejected and therefore be prevented from entry to that CfD Allocation Round.

We recently consulted on potential changes to the CfD scheme for the next allocation round, due to be held in 2021. This included questions around the potential merits of strengthening the powers to fail supply chain plans, including the remedies the Department could consider for Applicants who do fail, and of linking compliance with an approved supply chain plan with CfD payments. We will publish the Government’s response to the consultation in due course.

The Department does not have the legal power to require the holder of a Contract for Difference to sell all or most of their stake in a project under these circumstances.

The Secretary of State can take into account an Applicant’s failure to demonstrate that they have implemented a previously approved supply chain plan when considering a plan for a future CfD Allocation Round. This could lead to the Applicant (and any partner(s) with a 20% share or greater) having their supply chain plan rejected and therefore be prevented from entry to that CfD Allocation Round.

We recently consulted on potential changes to the CfD scheme for the next allocation round, due to be held in 2021. This included questions around the potential merits of strengthening the powers to fail supply chain plans, including the remedies the Department could consider for Applicants who do fail, and of linking compliance with an approved supply chain plan with CfD payments. We will publish the Government’s response to the consultation in due course.

The redacted supply chain plans for renewable energy projects that were awarded Contracts for Difference (CfD) in the CfD Allocation Round 3 will be published on the Government website shortly.

The supply chain plans for previous Allocation Rounds can be found here:

Allocation Round 1

https://www.gov.uk/government/publications/contracts-for-difference-supply-chain-plans-for-projects-over-300mw-which-secured-contracts

Allocation Round 2

https://www.gov.uk/government/publications/contracts-for-difference-2nd-allocation-round-supply-chain-plans-for-projects-over-300mw-which-secured-contracts-2017

Details of meetings held by BEIS Ministers are recorded in the Transparency data published on gov.uk, and available at:

https://www.gov.uk/government/publications/beis-ministerial-gifts-hospitality-travel-and-meetings-october-to-december-2019

Officials have regular meetings with SSE to discuss various issues, including the Seagreen offshore wind development.

The Seagreen Offshore Wind Farm Supply Chain Plan (which will be published in due course), submitted prior to the award of a contract for difference, committed to maximising opportunities for UK suppliers with an aspirational target of achieving 50% - 55% lifetime UK content.

Seagreen Wind Energy Ltd also committed to encouraging new suppliers into the market and promoting supply chain opportunities to the local and national supply chain and has collaborated with Scottish Enterprise and Highlands and Islands Enterprise to compile a list of Scottish companies capable of supplying to the sector.

The Department will monitor the implementation of the Seagreen Supply Chain Plan.

The Department does not hold that information. However, we work closely with the Scottish Government and the Department for International Trade and the industry to maximise the opportunities for UK suppliers from offshore wind projects.

81% of veterinary medicines authorised for use in the UK are produced at manufacturing sites based in the EU.

Defra has well-established mechanisms for dealing with supply issues as and when they arise and works closely with the veterinary pharmaceutical industry to detect potential problems at the earliest point.

Veterinary medicines manufacturers and suppliers have prepared for the end of the transition period by establishing appropriate stock levels and working with delivery partners so they are ready to meet the new customs and border requirements. Many veterinary medicines transit into the UK from manufacturing sites in the EU and do so via the short straits. This ferry crossing is vulnerable to disruption and as such pharmaceutical companies have been considering alternative logistics options. Veterinary medicines are classified as Category 1 goods and can access Government secured freight capacity. These contingencies provide assurance that there are ways to facilitate the ongoing flow of veterinary medicines into the UK.

In addition, veterinary surgeons will continue to be able to use the Special Import Scheme to apply for alternative medicines to be imported where there is no suitable UK authorised medicine available in the UK. Due to the small order size and immediate need, it is usual that these medicines arrive via air freight.

The Veterinary Medicines Directorate (VMD) – the UK regulator of veterinary medicines – charges fees for authorising applications from companies for marketing authorisations for veterinary medicines on a cost recovery basis. From 1 January 2021 the VMD’s fees will continue to apply for each GB and NI veterinary medicine marketing authorisation. To minimise the regulatory costs to industry and avoid any consequential price increases to UK consumers, we continue to explore opportunities to introduce fee reductions wherever possible.

The prices of veterinary medicines are a commercial consideration for the private veterinary pharmaceutical industry who manufacture and market these medicines, as well as for retailers. The Government has no influence over the price of UK medicines and there will be no extra costs associated with the Government’s regulation of veterinary medicines.

The UK has a highly resilient food supply chain. Our thorough preparations for leaving the EU in 2019, alongside the lessons we have learned during the Covid-19 response, provide a robust foundation for end of Transition Period planning on food supply. We are working alongside industry and across Government, including with the Devolved Administrations, to plan for the end of this year. The Government has well established ways of working with the food industry, which is experienced in dealing with situations that can cause disruptions to supply.

In terms of disruption at the border, the Border Operating Model (www.gov.uk/government/publications/the-border-operating-model) provides greater detail on how the border with the EU will work following the end of the Transition Period and the mechanisms which will seek to mitigate the impact of additional volumes of traffic. We will, for example, have a contingency measure to prioritise single loads of fresh seafood and day old chicks which met the bar of hitting two out of three of the following criteria: perishability, animal welfare considerations, and economic impact on a specific geographical area. Defra is working very closely with other Government departments and local stakeholders, such as the Kent Resilience Forum, to ensure that those wishing to trade with the EU can do so in the most efficient and effective way possible.

Defra has made regulatory provisions for all veterinary medicines currently authorised for use in the UK via an EU approval system to continue to be authorised in the UK after the end of the transition period. These products can remain on the UK market for sale and supply in their existing packaging.

Defra’s close working relationship with the veterinary pharmaceutical industry has enabled the industry to prepare for the end of the transition period, including taking mitigating actions in the event of disruption to supply. These activities include maximising stocks within the UK and diverting supply routes away from the short straits, where the greatest risk of interruption to supply is posed, that being from border disruption. In addition, veterinary medicines are classified as eligible for use of the Government Secured Freight Capacity.

We have well-established mechanisms for dealing with supply issues as and when they arise. Enhanced early warning indicator systems are now in place which will provide early warnings of demand exceeding supply. The prescribing cascade legislation, which for availability and animal welfare reasons permits veterinary surgeons to import veterinary medicines from outside the UK, allows sourcing of products from countries beyond the EU.

Almost all fresh produce (including fruit, vegetables and cut flowers) from the EU will not be subject to any plant heath import controls until April 2021. From April, fresh produce will require a phytosanitary certificate and some goods will also require pre-notification. Importantly, there will continue to be no physical checks required at the border until July 2021 for almost all produce. From July onwards physical checks will be undertaken at approved designated Border Control posts on a risk basis. Any required checks will be performed as quickly as possible to minimise delays to the passage of goods and maintain border flow.

The phased approach will allow time for trade to adapt to the new import requirements for EU goods.

GB plant health authorities are undertaking significant recruitment to increase the number of plant health inspectors in order to service the demand for import and export checks and certification. We will have sufficient resources to meet demand from 1 January 2021 and ensure minimal disruption to trade. GB plant health services are currently reviewing their operating hours to make sure that biosecurity standards will continue to be met and strengthened in ways that support trade and the smooth flow of goods while minimising new burdens on businesses.

The UK has a highly resilient food supply chain. Our thorough preparations for leaving the EU in 2019, alongside the lessons we have learned during the Covid-19 response, provide a robust foundation for end of Transition Period planning on food supply. We are working alongside industry and across Government, including with the Devolved Administrations, to plan for the end of this year. The Government has well established ways of working with the food industry, which is experienced in dealing with situations that can cause disruptions to supply.

In terms of disruption at the border, the Border Operating Model (www.gov.uk/government/publications/the-border-operating-model) provides greater detail on how the border with the EU will work following the end of the Transition Period and the mechanisms which will seek to mitigate the impact of additional volumes of traffic. We will, for example, have a contingency measure to prioritise single loads of fresh seafood and day old chicks which met the bar of hitting two out of three of the following criteria: perishability, animal welfare considerations, and economic impact on a specific geographical area. Defra is working very closely with other Government departments and local stakeholders, such as the Kent Resilience Forum, to ensure that those wishing to trade with the EU can do so in the most efficient and effective way possible.

Defra has made regulatory provisions for all veterinary medicines currently authorised for use in the UK via an EU approval system to continue to be authorised in the UK after the end of the transition period. These products can remain on the UK market for sale and supply in their existing packaging.

Defra’s close working relationship with the veterinary pharmaceutical industry has enabled the industry to prepare for the end of the transition period, including taking mitigating actions in the event of disruption to supply. These activities include maximising stocks within the UK and diverting supply routes away from the short straits, where the greatest risk of interruption to supply is posed, that being from border disruption. In addition, veterinary medicines are classified as eligible for use of the Government Secured Freight Capacity.

We have well-established mechanisms for dealing with supply issues as and when they arise. Enhanced early warning indicator systems are now in place which will provide early warnings of demand exceeding supply. The prescribing cascade legislation, which for availability and animal welfare reasons permits veterinary surgeons to import veterinary medicines from outside the UK, allows sourcing of products from countries beyond the EU.

Almost all fresh produce (including fruit, vegetables and cut flowers) from the EU will not be subject to any plant heath import controls until April 2021. From April, fresh produce will require a phytosanitary certificate and some goods will also require pre-notification. Importantly, there will continue to be no physical checks required at the border until July 2021 for almost all produce. From July onwards physical checks will be undertaken at approved designated Border Control posts on a risk basis. Any required checks will be performed as quickly as possible to minimise delays to the passage of goods and maintain border flow.

The phased approach will allow time for trade to adapt to the new import requirements for EU goods.

GB plant health authorities are undertaking significant recruitment to increase the number of plant health inspectors in order to service the demand for import and export checks and certification. We will have sufficient resources to meet demand from 1 January 2021 and ensure minimal disruption to trade. GB plant health services are currently reviewing their operating hours to make sure that biosecurity standards will continue to be met and strengthened in ways that support trade and the smooth flow of goods while minimising new burdens on businesses.

The UK has a highly resilient food supply chain. Our thorough preparations for leaving the EU in 2019, alongside the lessons we have learned during the Covid-19 response, provide a robust foundation for end of Transition Period planning on food supply. We are working alongside industry and across Government, including with the Devolved Administrations, to plan for the end of this year. The Government has well established ways of working with the food industry, which is experienced in dealing with situations that can cause disruptions to supply.

In terms of disruption at the border, the Border Operating Model (www.gov.uk/government/publications/the-border-operating-model) provides greater detail on how the border with the EU will work following the end of the Transition Period and the mechanisms which will seek to mitigate the impact of additional volumes of traffic. We will, for example, have a contingency measure to prioritise single loads of fresh seafood and day old chicks which met the bar of hitting two out of three of the following criteria: perishability, animal welfare considerations, and economic impact on a specific geographical area. Defra is working very closely with other Government departments and local stakeholders, such as the Kent Resilience Forum, to ensure that those wishing to trade with the EU can do so in the most efficient and effective way possible.

Defra has made regulatory provisions for all veterinary medicines currently authorised for use in the UK via an EU approval system to continue to be authorised in the UK after the end of the transition period. These products can remain on the UK market for sale and supply in their existing packaging.

Defra’s close working relationship with the veterinary pharmaceutical industry has enabled the industry to prepare for the end of the transition period, including taking mitigating actions in the event of disruption to supply. These activities include maximising stocks within the UK and diverting supply routes away from the short straits, where the greatest risk of interruption to supply is posed, that being from border disruption. In addition, veterinary medicines are classified as eligible for use of the Government Secured Freight Capacity.

We have well-established mechanisms for dealing with supply issues as and when they arise. Enhanced early warning indicator systems are now in place which will provide early warnings of demand exceeding supply. The prescribing cascade legislation, which for availability and animal welfare reasons permits veterinary surgeons to import veterinary medicines from outside the UK, allows sourcing of products from countries beyond the EU.

Almost all fresh produce (including fruit, vegetables and cut flowers) from the EU will not be subject to any plant heath import controls until April 2021. From April, fresh produce will require a phytosanitary certificate and some goods will also require pre-notification. Importantly, there will continue to be no physical checks required at the border until July 2021 for almost all produce. From July onwards physical checks will be undertaken at approved designated Border Control posts on a risk basis. Any required checks will be performed as quickly as possible to minimise delays to the passage of goods and maintain border flow.

The phased approach will allow time for trade to adapt to the new import requirements for EU goods.

GB plant health authorities are undertaking significant recruitment to increase the number of plant health inspectors in order to service the demand for import and export checks and certification. We will have sufficient resources to meet demand from 1 January 2021 and ensure minimal disruption to trade. GB plant health services are currently reviewing their operating hours to make sure that biosecurity standards will continue to be met and strengthened in ways that support trade and the smooth flow of goods while minimising new burdens on businesses.

The aims of the bilateral Memoranda of Understanding with Greenland and Iceland are to promote discussion and cooperation on fisheries issues with both of the two countries. Fishing opportunities form no part of either of these Memoranda. Accordingly, no species of fish are referred to and neither Memorandum has any effect on fishing quotas.

The UK-Norway fisheries framework agreement does not refer to any species of fish or quotas of fish stocks, nor does it provide for any access to UK waters. The framework agreement sets out that these issues will the subject of annual negotiations between the parties.

Certain stocks in the North Sea that are jointly managed between the UK, Norway and the EU will be subject to trilateral discussions between the parties.

Sustainable trade is a priority for the UK as an independent trading nation. We have already liberalised over 100 environmental goods in the UK Global Tariff and co-sponsored the new plurilateral Structured Discussions on Trade and Environmental Sustainability in the World Trade Organisation (WTO).

We are actively considering further policy options, including the three policy areas which comprise the Agreement on Climate Change, Trade and Sustainability (ACCTS) - environmental goods and services liberalisation, ecolabelling and fossil fuel subsidies.

The UK has announced a number of tariff suspensions and Autonomous Tariff Quotas as part of our independent global tariff regime to help ensure continuity of trade, including with Greenland. We welcome continued engagement with Greenland and are considering options to ensure a prosperous trading relationship in the future.

HM Government ran a Call for Evidence to determine which EU trade remedy measures should be transitioned to the United Kingdom’s system after the transition period. As part of the consistent criteria applied, the evidence from respondents needed to demonstrate that transitioning a measure had support from British businesses that produce a sufficient proportion of those products.

The deadlines for the Call for Evidence were determined by legislative obligations and operational requirements to make sure that measures were successfully transitioned by 31^st December 2020. While we received some evidence from British producers in support of transitioning measures AD653 and AS656, this did not meet the criterion of demonstrating support from businesses producing a sufficient proportion of the products. Further evidence was not submitted in time for consideration and HM Government was, therefore, unable to transition these measures.

Businesses can raise trading issues and apply for a new trade remedy investigation. However, my Rt Hon. Friend the Secretary of State for International Trade can only decide in favour of the imposition of new trade remedy measures following a full investigation and recommendation from the Trade Remedies Investigations Directorate (or its successor, in due course, the Trade Remedies Authority).

HM Government ran a Call for Evidence to determine which EU trade remedy measures should be transitioned to the United Kingdom’s system after the transition period. As part of the consistent criteria applied, the evidence from respondents needed to demonstrate that transitioning a measure had support from British businesses that produce a sufficient proportion of those products.

The deadlines for the Call for Evidence were determined by legislative obligations and operational requirements to make sure that measures were successfully transitioned by 31^st December 2020. While we received some evidence from British producers in support of transitioning measures AD653 and AS656, this did not meet the criterion of demonstrating support from businesses producing a sufficient proportion of the products. Further evidence was not submitted in time for consideration and HM Government was, therefore, unable to transition these measures.

Businesses can raise trading issues and apply for a new trade remedy investigation. However, my Rt Hon. Friend the Secretary of State for International Trade can only decide in favour of the imposition of new trade remedy measures following a full investigation and recommendation from the Trade Remedies Investigations Directorate (or its successor, in due course, the Trade Remedies Authority).

HM Government ran a Call for Evidence to determine which EU trade remedy measures should be transitioned to the United Kingdom’s system after the transition period. As part of the consistent criteria applied, the evidence from respondents needed to demonstrate that transitioning a measure had support from British businesses that produce a sufficient proportion of those products.

The deadlines for the Call for Evidence were determined by legislative obligations and operational requirements to make sure that measures were successfully transitioned by 31^st December 2020. While we received some evidence from British producers in support of transitioning measures AD653 and AS656, this did not meet the criterion of demonstrating support from businesses producing a sufficient proportion of the products. Further evidence was not submitted in time for consideration and HM Government was, therefore, unable to transition these measures.

Businesses can raise trading issues and apply for a new trade remedy investigation. However, my Rt Hon. Friend the Secretary of State for International Trade can only decide in favour of the imposition of new trade remedy measures following a full investigation and recommendation from the Trade Remedies Investigations Directorate (or its successor, in due course, the Trade Remedies Authority).

I am responsible for UK Agri-Tech exports overseas and my noble Friend the Minister of State for Investment, Lord Grimstone, for foreign direct investment in the UK Agri-Tech sector.

I refer the hon Member for Na h-Eileanan an Iar to the answer I gave to the hon Member for Birmingham, Edgbaston on 26 February, UIN: 18647.

Paper applications which include identification documents are taking longer to process as they must be dealt with in person. The Driver and Vehicle Licensing Agency (DVLA) has a reduced number of staff on-site to comply with social distancing requirements and ensure staff safety. Where possible, the DVLA is prioritising the return of identification documents that have been sent to them by customers.

Information on the value of goods by mode of transport is only available for goods exported to non-EU countries that are cleared for customs purposes at UK airports from HMRC. Table 1 displays the top five product categories exported by air by value in 2018, and the associated top five export partner countries for these goods.

Table 1: Main UK good exports by air to non-EU countries by value, 2018

The volume of freight handled at UK airports that receive commercial traffic and transported to international destinations is collected by the Civil Aviation Authority (CAA) and is displayed in the attached Table 1.

The CAA does not collect data on the value of freight handled at UK airports. Information on the value of goods is only available for goods exported to non-EU countries that are cleared for customs purposes at UK airports from HMRC and is displayed in the attached Table 2.

Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:

- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.

- Personal allowances will apply to passengers entering Great Britain from a destination outside of the UK, with alcohol allowances significantly increased.

- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents and will be withdrawn for all passengers.

- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.

The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government is also continueing to meet and discuss with stakeholders following the announcement of these policies.

The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers.

HMRC estimate that VAT RES refunds cost around £0.5 billion in VAT in 2019 for around 1.2 million non-EU visitors. In 2019 the ONS estimate there were substantially more EU visitors (24.8 million) than non-EU passengers (16.0 million) to the UK. This implies an extension to EU residents would significantly increase the cost by up to an estimated £0.9 billion. This would result in a large amount of deadweight loss by subsidising spending from EU visitors which already happens without a refund mechanism in place, potentially taking the total cost up to around £1.4 billion per annum.

The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Edinburgh and Glasgow and smaller regional airports which have not been able to offer duty-free to the EU before.

HMRC estimate that around £150 million of VAT is not charged as a result of tax-free airside sales. As with the VAT RES, extending the relief to the EU would significantly increase the cost of the scheme and result in a large amount of deadweight loss by subsidising spending from EU-bound passengers which already happens.

The final costings will be subject to scrutiny by the independent Office for Budget Responsibility and will be set out at the next forecast.

The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.

Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:

- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.

- Personal allowances will apply to passengers entering Great Britain from a destination outside of the UK, with alcohol allowances significantly increased.

- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents and will be withdrawn for all passengers.

- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.

The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government is also continueing to meet and discuss with stakeholders following the announcement of these policies.

The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers.

HMRC estimate that VAT RES refunds cost around £0.5 billion in VAT in 2019 for around 1.2 million non-EU visitors. In 2019 the ONS estimate there were substantially more EU visitors (24.8 million) than non-EU passengers (16.0 million) to the UK. This implies an extension to EU residents would significantly increase the cost by up to an estimated £0.9 billion. This would result in a large amount of deadweight loss by subsidising spending from EU visitors which already happens without a refund mechanism in place, potentially taking the total cost up to around £1.4 billion per annum.

The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Edinburgh and Glasgow and smaller regional airports which have not been able to offer duty-free to the EU before.

HMRC estimate that around £150 million of VAT is not charged as a result of tax-free airside sales. As with the VAT RES, extending the relief to the EU would significantly increase the cost of the scheme and result in a large amount of deadweight loss by subsidising spending from EU-bound passengers which already happens.

The final costings will be subject to scrutiny by the independent Office for Budget Responsibility and will be set out at the next forecast.

The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.

Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:

- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.

- Personal allowances will apply to passengers entering Great Britain from a destination outside of the UK, with alcohol allowances significantly increased.

- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents and will be withdrawn for all passengers.

- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.

The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government is also continueing to meet and discuss with stakeholders following the announcement of these policies.

The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers.

HMRC estimate that VAT RES refunds cost around £0.5 billion in VAT in 2019 for around 1.2 million non-EU visitors. In 2019 the ONS estimate there were substantially more EU visitors (24.8 million) than non-EU passengers (16.0 million) to the UK. This implies an extension to EU residents would significantly increase the cost by up to an estimated £0.9 billion. This would result in a large amount of deadweight loss by subsidising spending from EU visitors which already happens without a refund mechanism in place, potentially taking the total cost up to around £1.4 billion per annum.

The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Edinburgh and Glasgow and smaller regional airports which have not been able to offer duty-free to the EU before.

HMRC estimate that around £150 million of VAT is not charged as a result of tax-free airside sales. As with the VAT RES, extending the relief to the EU would significantly increase the cost of the scheme and result in a large amount of deadweight loss by subsidising spending from EU-bound passengers which already happens.

The final costings will be subject to scrutiny by the independent Office for Budget Responsibility and will be set out at the next forecast.

The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.

The Government, through the Job Support Scheme, is targeting support on those businesses that are being impacted by Coronavirus and who can support their employees doing some work, but that need more time for demand to recover.

As the Chancellor said, it is clear we are living with Coronavirus for a while, and therefore, our economy is likely to undergo a period of adjustment and it is right that our approach to economic support evolves.

Treasury Ministers and officials meet with a wide range of stakeholders across sectors as part of ongoing policy development and implementation.

Ministers and officials from the Department for Transport are in regular contact with airlines, airports and unions to understand the impact that COVID-19 is having on the sector and its workers.

Treasury Ministers and officials meet with a wide range of stakeholders across sectors as part of ongoing policy development and implementation.

Ministers and officials from the Department for Transport are in regular contact with airlines, airports and unions to understand the impact that COVID-19 is having on the sector and its workers.

HM Treasury Ministers have regular discussion with the Secretary of State for Transport on a range of topics.

The Government has announced an unprecedented package of support for workers and businesses to protect against the current economic emergency.

Business rates are devolved in Scotland.

In England, the Government has provided enhanced support to the retail, hospitality and leisure sectors through business rates relief given the direct and acute impacts of the COVID-19 pandemic on those sectors.

A range of further measures to support all businesses, including those not eligible for the business rates holiday, such as veterinary practices, has also been made available. For example, the Government has launched the Coronavirus Job Retention Scheme to help firms continue to keep people in employment, the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank backed by an 80% Government guarantee, and the deferral of VAT payments for this quarter.

The Government will consider any further financial assistance necessary to help businesses get through this period.