Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Dame Elizabeth Gloster's report entitled, Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc, published on 23 November 2020, what steps he has taken to implement the recommendations of that report and re-compensate bondholders.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that this has been a very difficult time for LCF bondholders. That is why on 23 May 2019, following a request from Charles Randell, Chair of the FCA, we formally directed the FCA to launch an independent investigation into the events at LCF, and approved the FCA’s appointment of Dame Elizabeth Gloster to lead it.
Dame Elizabeth’s independent investigation considered the events and circumstances surrounding the failure of LCF and whether, in its supervision of LCF, the FCA discharged its functions in a manner which enabled it to effectively fulfil its statutory objectives. Dame Elizabeth delivered her report to the FCA on 23 November 2020, and the report alongside the FCA’s response was published on 17 December 2020. A Written Ministerial Statement was made on the same day setting out the Government’s response. These documents are available online at gov.uk.
Dame Elizabeth makes nine recommendations for the FCA. The Government welcomes the FCA’s apology to LCF bondholders and their commitment to implement Dame Elizabeth’s recommendations.
HM Treasury has also accepted the four recommendations that Dame Elizabeth Gloster made for the government regarding the regulatory regime. The Written Statement set out the steps that the Government will be taking to implement them.
As set out in the Written Statement, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.
The Written Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the (a) potential effect on community benefit societies of the Social Investment Tax Relief ending in April 2021 and (b) potential merits of extending that tax relief.
Answered by Jesse Norman
The Social Investment Tax Relief (SITR) was introduced in 2014 to incentivise risk finance investments in qualifying social enterprises and charities. HMRC statistics show that up to 2018-19, about 110 enterprises have used the scheme to raise £11.2 million.
The Government keeps all taxes and reliefs under review in order to ensure they continue to meet policy objectives and represent value for money for taxpayers. The Government previously published a Call for Evidence on SITR’s use to date. A response to the consultation will be published in due course and a decision on SITR’s future will be announced at the Budget ahead of its sunset clause in April 2021.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the financial effect of the extended duration of the covid-19 lockdowns and restrictions put in place in response to the covid-19 outbreak on (a) limited company directors, (b) the self-employed, (c) hospitality staff substantially remunerated through tronc payments and (d) others who have received no or limited Government support during the covid-19 outbreak; and if he will make a statement.
Answered by Jesse Norman
The Government has provided substantial levels of support throughout this crisis to protect people’s jobs and livelihoods, and support businesses and public services across the UK. The Coronavirus Job Retention Scheme (CJRS) has helped to pay the wages of people in 9.9 million jobs across the country and the Self-Employment Income Support Scheme (SEISS) has received claims from 2.7 million self-employed workers.
The Government has acknowledged that it has not been possible to support everyone as they might want and that the past months have been very difficult for many people.
The Government has put in place a wide-ranging £280 billion package of support including over £65 billion in affordable finance to firms through business loan schemes, a temporary £8 billion increase to welfare, mortgage holidays, help with council tax payments, business loans, grants, a business rates holiday, and tax cuts and VAT deferrals.
The resurgence of the virus has required further action to protect people’s health, while preserving the capacity of people to work and businesses to trade. The Government keeps the economic response to the pandemic under review.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of setting up an equity finance scheme to support businesses through the covid-19 outbreak; and if he will make a statement.
Answered by Kemi Badenoch - President of the Board of Trade
As part of the government’s response to Covid-19, we developed the Future Fund, which provides equity finance for high growth, highly innovative companies. As of December, more than 900 firms have taken part in the scheme.Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of reducing the VAT rate to zero for existing dwellings when making energy efficient improvements as part of any climate change strategy.
Answered by Jesse Norman
The installation of various environmentally friendly home improvement materials, such as insulation and draft stripping, is already eligible for relief from VAT, subject to certain conditions.
Although the Government keeps all taxes under review, there are no plans to change the VAT treatment of home improvements at present.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of reducing the VAT rate on building refurbishment works to zero.
Answered by Jesse Norman
The Government already maintains a reduced rate of VAT at five per cent, subject to certain conditions, for residential renovations.
Introducing a zero rate of VAT would come at a significant cost to the Exchequer, estimated at about £4 billion per year, which would have to be balanced by a reduction in public spending, higher borrowing or increased taxation elsewhere. While the Government keeps all taxes under review, there are no plans to change the VAT treatment of the repair and renovation of buildings.A
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the outcome of the consultation on the Reform to Retail Prices Index (RPI), published on 25 November 2020. what steps the Government plans to take to (a) protect the lifetime value of people’s defined benefit pension savings which are RPI-linked from 2030 and (b) maintain confidence in defined benefit pension schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
On 25 November, 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 schemes 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.
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.
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: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to create a positive environment for investment in the UK after the end of the transition period on 31 December 2020.
Answered by Jesse Norman
The Government will maintain a competitive tax environment for business, ensuring the UK remains one of the most attractive places in the world to invest, start and grow a business.
As part of this, last month the Government announced a year-long extension to the £1 million temporary cap of the Annual Investment Allowance (AIA). The AIA provides firms 100% same year tax relief on qualifying capital expenditure, up to a fixed limit; and it responds to the needs of business, providing further upfront support for investment in 2021.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of moving the trigger point for the Stamp Duty holiday from the date of completion to the date of sale.
Answered by Jesse Norman
The Stamp Duty Land Tax temporary rates apply to transactions completed or substantially performed between 8 July 2020 and 31 March 2021. A transaction is substantially performed where the buyer has paid 90% of the purchase price, or where they have possession of the whole or substantially the whole of the property.
Completion and substantial performance are recognised legal concepts and using them as trigger points for Stamp Duty Land Tax provides certainty to consumers and to HMRC. There is no standard definition of a point of sale in a housing transaction and so moving the trigger point for a transaction to the date of sale would lead to uncertainty and confusion among home buyers. This lack of certainty would also mean that such a trigger point would be open to abuse.
As with all tax policy, the Government continues to monitor the impact of the SDLT temporary rates.
Asked by: Steve Baker (Conservative - Wycombe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will extend the stamp duty holiday for six to 12 months.
Answered by Jesse Norman
The temporary increase in the Stamp Duty Land Tax nil rate band was designed to create immediate momentum within the property market, where property transactions fell by as much as 50 per cent during the COVID-19 lockdown. The downturn in the market meant that the future was uncertain for many people whose jobs relied on custom from the property industry. There are already early signs that demand and transactions have increased, and are continuing to rise, since the increase to the SDLT nil rate band was announced in July.
As the relief was designed to provide an immediate stimulus to the property market, the Government does not plan to extend this relief and will continue to monitor the property market.