Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to raise the High Income Child Benefit Charge (HICBC) threshold; and what recent assessment she has made of the impact of that threshold on families with one working parent on a low to average income.
Answered by Simon Clarke
The Government is committed to managing the public finances in a disciplined and responsible way by targeting support where it is most needed.
The adjusted net income threshold of £50,000 only affects a minority of individuals, with comparatively high incomes. Individuals claiming Child Benefit with average and low incomes are not liable to pay HICBC. If a claimant lives with a partner earning above £50,000, their partner will be liable to pay the charge.
The Government therefore believes that the current threshold for HICBC remains the best option at present. As with all elements of tax policy, the Government keeps this under review.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of extending the reduced rate of VAT on hospitality goods and services.
Answered by Jesse Norman - Shadow Leader of the House of Commons
In order to support the cash flow and viability of around 150,000 businesses and to protect over 2.4 million jobs, the Government has applied a temporary reduced rate of VAT (5 per cent) to goods and services supplied by the tourism and hospitality sectors, which will now end on 30 September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent will be introduced for these goods and services to help affected businesses manage the transition back to the standard rate. The new rate will end on 31 March 2022.
The Government has been clear that the reduced rate of VAT is a temporary measure. It is right that, as restrictions are lifted and demand for goods and services in the tourism and hospitality sectors increases, this relief is reduced and eventually removed in order to rebuild and strengthen the public finances. This policy will cost the Exchequer over £7 billion and, while the Government keeps all taxes under review, there are no plans to make the reduced rate of VAT permanent.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what impact assessment his Department has undertaken on the potential effect on electric car take-up of imposing a VAT levy on the charging of electric vehicles for private use.
Answered by Jesse Norman - Shadow Leader of the House of Commons
In order to keep costs down for families, the supply of electricity for domestic use, including charging electric vehicles at home, attracts the reduced rate of VAT (5 per cent).
Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (20 per cent). There has been no change to this policy and the Government has no plans to review these provisions.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions officials in his Department have had with representatives of HMRC on the classification of long-term and short-term vessels under the capital allowance scheme for commercial maritime vessels.
Answered by Jesse Norman - Shadow Leader of the House of Commons
Treasury officials are in regular contact with HMRC colleagues. In line with the practice of successive administrations, details of internal discussions are not normally disclosed.
HMRC do not classify which assets should be written down at the main or special rate of writing down allowances. Instead, businesses should identify whether an asset they have acquired has a useful economic life (UEL) of more or less than 25 years when new. This UEL test for plant and machinery should be applied on the asset as a whole, rather than individual components; since for tax purposes the asset is depreciated as a single unit.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions officials in his Department have had with relevant stakeholders on HMRC’s enforcement of classification of long-term and short-term assets for commercial maritime vessels.
Answered by Jesse Norman - Shadow Leader of the House of Commons
Treasury officials are in regular contact with HMRC colleagues. In line with the practice of successive administrations, details of internal discussions are not normally disclosed.
HMRC do not classify which assets should be written down at the main or special rate of writing down allowances. Instead, businesses should identify whether an asset they have acquired has a useful economic life (UEL) of more or less than 25 years when new. This UEL test for plant and machinery should be applied on the asset as a whole, rather than individual components; since for tax purposes the asset is depreciated as a single unit.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent steps his Department has taken to ensure that people can continue to access cash; and if he will publish the Government's timeframe for bringing forward legislative proposals to protect access to cash.
Answered by John Glen
The Government has committed to legislate to protect access to cash and ensure that the UK’s cash infrastructure is sustainable for the long term. To progress this work, the Government published a Call for Evidence on Access to Cash in October 2020. The Call for Evidence sought views on the key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance, and regulatory oversight of the cash system. The Government is considering responses to the Call for Evidence and will set out next steps in due course.
The Government created the Joint Authorities Cash Strategy Group in 2019, which has provided a forum for the public bodies to formally co-ordinate respective approaches to access to cash. This is chaired by HM Treasury and attended by the Bank of England, Payment Systems Regulator and Financial Conduct Authority. The members published an update on the actions of its members in July 2020. This included work led by the PSR and FCA to develop a comprehensive picture of cash access infrastructure across the UK.
During the COVID-19 pandemic, the Treasury has been working closely with regulators and industry to ensure customers continue to have access to essential banking services, including cash, while also protecting the safety of staff and customers. This has meant the vast majority of people have been able to access cash through the pandemic.
With regards to ATMs, LINK (the scheme that runs the UK’s largest ATM network) has existing arrangements in place to protect free-to-use ATMs that do not have another free-to-use ATM or Post Office within one kilometre. LINK’s members have also made £5 million available to fund ATMs at the request of communities with poor access to cash. The Payment Systems Regulator has powers to regulate LINK and is holding it to account over its commitment to protect the broad geographic spread of free-to-use ATMs.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of Which?’s recent research showing a nationwide reduction in free-to-use cashpoints; and if he will publish the Government's timeframe for bringing forward legislative proposals to protect access to cash.
Answered by John Glen
The Government has committed to legislate to protect access to cash and ensure that the UK’s cash infrastructure is sustainable for the long term. To progress this work, the Government published a Call for Evidence on Access to Cash in October 2020. The Call for Evidence sought views on the key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance, and regulatory oversight of the cash system. The Government is considering responses to the Call for Evidence and will set out next steps in due course.
The Government created the Joint Authorities Cash Strategy Group in 2019, which has provided a forum for the public bodies to formally co-ordinate respective approaches to access to cash. This is chaired by HM Treasury and attended by the Bank of England, Payment Systems Regulator and Financial Conduct Authority. The members published an update on the actions of its members in July 2020. This included work led by the PSR and FCA to develop a comprehensive picture of cash access infrastructure across the UK.
During the COVID-19 pandemic, the Treasury has been working closely with regulators and industry to ensure customers continue to have access to essential banking services, including cash, while also protecting the safety of staff and customers. This has meant the vast majority of people have been able to access cash through the pandemic.
With regards to ATMs, LINK (the scheme that runs the UK’s largest ATM network) has existing arrangements in place to protect free-to-use ATMs that do not have another free-to-use ATM or Post Office within one kilometre. LINK’s members have also made £5 million available to fund ATMs at the request of communities with poor access to cash. The Payment Systems Regulator has powers to regulate LINK and is holding it to account over its commitment to protect the broad geographic spread of free-to-use ATMs.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of bringing forward legislative proposals on protecting access to cash; if he will publish the Government's timeframe for bringing forward those proposals; and what plans the Government has to ensure that cash remains a viable payment method for people who are reliant on it.
Answered by John Glen
The Government has committed to legislate to protect access to cash and ensure that the UK’s cash infrastructure is sustainable for the long term. To progress this work, the Government published a Call for Evidence on Access to Cash in October 2020. The Call for Evidence sought views on the key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance, and regulatory oversight of the cash system. The Government is considering responses to the Call for Evidence and will set out next steps in due course.
The Government created the Joint Authorities Cash Strategy Group in 2019, which has provided a forum for the public bodies to formally co-ordinate respective approaches to access to cash. This is chaired by HM Treasury and attended by the Bank of England, Payment Systems Regulator and Financial Conduct Authority. The members published an update on the actions of its members in July 2020. This included work led by the PSR and FCA to develop a comprehensive picture of cash access infrastructure across the UK.
During the COVID-19 pandemic, the Treasury has been working closely with regulators and industry to ensure customers continue to have access to essential banking services, including cash, while also protecting the safety of staff and customers. This has meant the vast majority of people have been able to access cash through the pandemic.
With regards to ATMs, LINK (the scheme that runs the UK’s largest ATM network) has existing arrangements in place to protect free-to-use ATMs that do not have another free-to-use ATM or Post Office within one kilometre. LINK’s members have also made £5 million available to fund ATMs at the request of communities with poor access to cash. The Payment Systems Regulator has powers to regulate LINK and is holding it to account over its commitment to protect the broad geographic spread of free-to-use ATMs.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of aligning the retail price index with the consumer prices index on pensions for (a) women and (b) people on defined benefit pension schemes.
Answered by John Glen
On 25 November 2020, the Government and UK Statistics Authority (UKSA) published their response to the consultation on the timing of reform to the Retail Prices Index (RPI). Owing to shortcomings in its calculation, UKSA intends to bring the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI.
The Government and UKSA are mindful of the widespread use of RPI in the economy, and, as such, sought views in the consultation on the broader impacts of reform. The Government and UKSA received approximately 550 responses from members of defined benefit (DB) pension schemes whose benefits are linked to RPI.
It is apparent that some DB pension scheme members will be affected by UKSA’s reform. The effect of reform on the members of such schemes will depend on whether their benefits are linked to RPI under the trust deed and rules of the scheme. As noted in the consultation response document, the Pensions Policy Institute (PPI) estimates that the average reduction in lifetime income from an individual’s RPI-linked pension post-retirement could be 4 per cent for a woman and 5 per cent for a man. However, the PPI estimates that women will generally experience a greater lifetime reduction in overall pension benefit, as they live longer than men on average.
The announcement in the response by the Chancellor and UKSA Chair means that reform will not be implemented before 2030. The Government keeps the occupational pensions system under review and will continue to do so.
In making its decision (with regard to the timing of reform) the Government has had due regard to and complied with the requirements of the Public Sector Equality Duty as laid out in the Equality Act 2010
For further information please see the consultation response at: https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has had discussions with his Cabinet colleagues on extending the hospitality sector's temporary reduction of VAT from 20 to 5 per cent to the service sector.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and will run until 31 March 2021.
This policy will cost over £2 billion. The Government keeps all taxes under review, and any future decisions on tax policy will be made at Budget.