Sunscreen Products: VAT

Victoria Atkins Excerpts

Thursday 9th February 2023 Westminster Hall

[The Financial Secretary to the Treasury (Victoria Atkins)]

It is a pleasure to serve under your chairmanship, Mr Sharma, and I congratulate the hon. Member for East Dunbartonshire (Amy Callaghan) on securing the debate. We had a very interesting, helpful and detailed conversation in November, which was quite amicable, so I hope she will forgive me for saying that my recollection of our conversation is not that I said that people should wear a hat. I was merely pointing out to her that the NHS advice is that we should all wear appropriate clothing, particularly when we are in strong sunshine and in hot places. I think we all accept that sunscreen is but one part of our protection against the damage that the sun can do to us. If I remember correctly, she acknowledged that sunglasses, hats, appropriate clothing and, as my hon. Friend the Member for Erewash (Maggie Throup) said, staying inside during the hottest times of the year are all part of that jigsaw.

[Amy Callaghan]

I agree that we had a very amicable meeting, but I do not think it was necessarily helpful to my VAT Burn campaign. What the Minister said is correct, but there are some questions from our meeting that are still to be answered.

[Victoria Atkins]

I very much accept that, and I genuinely welcome the debate. I particularly thank her and my hon. Friend the Member of Erewash for bringing their personal examples into the debate. It is very important as part of our national conversation—not just on this topic, but on all sorts of topics that the House rightly debates. When we do so, it does not always get the attention it deserves, but it is important that people can bring their experiences to the debate. The hon. Member for Strangford (Jim Shannon) brought the experiences of his staff and their families into the debate, underlining the point that has been made fairly and effectively about how common melanoma is in the UK and the particular impact it can have on people under the age of 50.

As one would expect, the NHS advises people to wear suitable clothing, to spend time in the shade during the hottest times of the day, and to wear high factor sunscreen with at least a four-star UVA rating. The hon. Member for Reading East (Matt Rodda) made an interesting point when he said that this is the time of year when a lot of people start to book summer holidays, whether here in the UK—I would always recommend the coastline of Lincolnshire for a holiday, unsurprisingly—or overseas. There is some interesting research that I looked into as part of my preparation not just for today’s debate but for the meeting I had with the hon. Member for East Dunbartonshire in November. Increased exposure to intense sunlight is thought to have increased because more people can travel internationally and to go abroad, and there is some thinking that that may explain the increase in the rate of melanomas since the early 1990s. It is important to note that, as although sunscreen is an important part of our defence, where we go and what we do when we go abroad on holiday also has an impact.

I am sorry to fulfil hon. Members’ predictions about what I would say, but the truth is that any Treasury Minister worth their salt would make the point that VAT is a broad-based tax on consumption. The 20% standard rate applies to most goods and services, including sunscreen products purchased over the counter. A couple of misconceptions about that seem to have arisen, which I will correct.

We do not have categorisations of cosmetic products for the purposes of VAT, or the Canadian categorisations that the hon. Member for North Ayrshire and Arran (Patricia Gibson) described. Either products are bought over the counter, and will therefore have VAT charged on them, or they are prescribed by a doctor or other prescribing professional. Those are the categorisations. VAT applies to all products bought over the counter, including paracetamol and Calpol. In their examinations of patients, GPs carefully analyse whether families are able to buy products over the counter or need them to be prescribed.

The hon. Member for North Ayrshire and Arran is right that the NHS can provide sunscreen on prescription in certain restricted circumstances. Doctors can prescribe sunscreen, which will therefore be provided without incurring VAT, to people who suffer from certain skin conditions characterised by extreme sun sensitivity, including porphyria. In addition, it can be prescribed to patients who have an increased risk from UV radiation because of chronic disease, therapies or procedures. The hon. Member for Ealing North (James Murray) asked for numbers; I do not have the numbers from either the Department of Health and Social Care or the NHS to hand, but I will happily provide them to the House of Commons Library.

There are no plans to change the VAT rating on sunscreen.

[Amy Callaghan]

On that point, will the Minister give way?

[Victoria Atkins]

I will develop my argument, and then I will give way to the hon. Lady.

I know that hon. Members have said they suspect they know what I am going to say, but I cannot change the fact that VAT is one of the main forms of revenue for the UK Government. In the year 2022-23, VAT is predicted to raise some £157 billion. To put that into context, that it almost the entire cost of our NHS. That is how important it is as a revenue raiser for the Government so that we can fund the services we care so much about.

Against that VAT backdrop, we look at items that we want to zero-rate or exempt. The hon. Member for East Dunbartonshire mentioned period products; I am really proud that a Conservative Government removed VAT from period products. That is a definite benefit of our having left the EU. Starkly, evidence is emerging that such VAT cuts are not being passed on to customers by those who sell those products. I have asked for more details about that, because when Government change tax policy in order to try to help with the cost of living—

[Patricia Gibson]

On that point, will the Minister give way?

[Victoria Atkins]

In a moment. It is important that those changes are passed on to the consumer, as that is the purpose of the policy. Our raw concern is that if relief is provided, not just with VAT but on other taxable items, it may not be passed on to the customer.

Colleagues across the House have rightly commended Tesco for choosing to absorb the VAT on sunscreen products within its profit margins. I stand with those Members and encourage other retailers to do the same, if this is a matter they care deeply about. While I am delighted to hear that Morrisons will promise to pass on the cut to customers if this VAT policy is changed, I gently point out that we would expect it to do that anyway; perhaps Morrisons should be encouraged to follow the lead of its market competitor Tesco. I know not, and I had better not get involved in competition between supermarkets. However, I would very much hope that retailers—I am sure they take a close interest in their customers’ ability to pay—will follow Tesco’s lead.

[Amy Callaghan]

The Minister has made a number of points that I want to pick up on. While it is great that these larger businesses pick up and absorb the VAT, we cannot expect that of the small retailers, such as independent pharmacies, in our constituencies. I am thoroughly disappointed that the Minister’s response is living up to expectations, to be honest. Does she recognise that the Government previously committed to reviewing VAT on sunscreen products on the Floor of the House, when the right hon. Member for North West Hampshire (Kit Malthouse) committed to it?

[Victoria Atkins]

There were a number of points there. First, the hon. Lady asked about independent retailers, and I fully accept what she said. I do not pretend that this is an easy decision or an easy policy area. My duty as a Minister is to weigh up the trade-offs implicit in deciding tax policy. We have to ensure that when we make changes to the VAT system, we do so fully understanding the potential consequences for other aspects of that system.

The hon. Member for North Ayrshire and Arran said that this change would represent a very small sum. The truth is, since the 2016 referendum, the Treasury has been encouraged to make changes to the VAT system totalling some £50 billion. Many of those changes will be commendable, and we will have a great deal of sympathy with why a Member feels compelled to make that case on behalf of their constituents. However, we have to make these difficult decisions as to which items are VAT-exempted or VAT-free and which are not, and that is why those products are so small in number.

[Patricia Gibson]

The Minister is making a powerful case as to why VAT is an important source of revenue for the UK Government, and I do not think anybody would dispute that. But if she was to do as Members in the Chamber ask and remove VAT on sunscreen, can she tell us how much that one single measure would cost the Treasury?

[Victoria Atkins]

It is very difficult to calculate. Because of the way multinational companies such as Tesco conduct their VAT returns, it is difficult to break it down. Our concern is, as I say, a practical one about the impact. Each and every time I get asked to exempt a product from VAT—this is a regular occurrence, I promise, and I completely understand why Members of Parliament would wish for such matters to be exempted—I have to conduct this trade-off. It is incredibly difficult. I very much understand the intentions behind the campaign, but this is the thinking behind why we have thus far had to say no. Of course, we keep it under review.

[Maggie Throup]

I completely understand the point the Minister is making about trade-off and balance, but will she commit to looking at the cost to the NHS of melanoma as a condition? That, surely, should be balanced out against the loss of VAT. Obviously, she will have to go to the Department of Health and Social Care for that, but let us look at that trade-off and that balance in more detail.

[Victoria Atkins]

That is a very fair challenge. I keep talking about difficulties, but that is the reality of the decisions we have to make; while a lot of melanoma is caused by of exposure to the sun, even in this day and age, some melanoma will be due to sunbed use, which I know colleagues across the House will have great concerns about. Some melanoma will be from damage caused decades ago, when we were less aware of the risks of the sun, and some will have no link at all to sun damage. It will never be a straight swap.

[Jim Shannon]

I thank the Minister for her response, and I want to follow on from what the hon. Member for Erewash (Maggie Throup) said. In my contribution I referred to 200,000 surgical operations and 16,000 new melanoma cases every year, and the scale of that results in a significant cost for the NHS. We are not criticising the Minister; she is doing what a Treasury Minister has to do. We are saying, very respectfully, that there is a cost to the NHS every year. That has to be part of the mathematics of the process.

This is a very long intervention, and I apologise for that. Given that Australia and the United States of America have cut VAT on sunscreen, has there been any discussion with the relevant bodies about what those countries achieved by doing so?

[Victoria Atkins]

I do not know if there have been any discussions. I will ask, because it may be that my predecessors had them. In terms of comparisons with Australia and the United States, we have to tread a little bit carefully. With the horrendous damage that has been done to the ozone, Australia has a very particular problem with exposure to the sun, and we have to remember the strength of the sun there. I note what the hon. Member for East Dunbartonshire said about UVA and UVB being present in Scotland, but I do not think that anyone would suggest that Scotland has the same strength of sun exposure all year round as the sunnier parts of Australia.

[Amy Callaghan]

Will the Minister give way?

[Victoria Atkins]

I have been quite generous with the hon. Lady, so I will carry on. We have to tread carefully with international comparisons. On the broader point, I understand the argument, but we have a great deal of other extremely good causes that I have to look at carefully. It is the responsibility I have to bear. That is the thinking behind our approach to the VAT system.

[Amy Callaghan]

I thank the Minister very much for giving way. The point that she was getting to prior to the previous intervention hinted at the desperate need for an awareness campaign. If she will not commit to reforming the VAT on sunscreen products, will she consider an awareness campaign around exposure of our skin to the sun?

--- Later in debate ---

[Victoria Atkins]

I fear I may be treading on Health Ministers’ toes if I commit the Department to an awareness campaign. I have already written to the relevant Health Minister to ask what plans there are to help the public on this. Again, it should not just be the Government working on this. Any parent who has a baby nowadays will be told by medical professionals —I remember that I was with my little boy—how vital it is to protect infants, babies and young children with sunscreen, and, critically, to keep them indoors at the hottest times of the day.

There is work that schools can do to help with this, and, in fairness, an awful lot of them do. I do not know if the hon. Member for East Dunbartonshire is aware of this, but when there are hot days, such as during the heatwave we had last summer, schools encourage mums and dads to put sunscreen on their children before they go to school and to top it up. I think there is a greater awareness of the risks than there was 20 years ago—even than there was 10 years ago, dare I say.

On the point about the cost of sunscreen, one of the best things that the Government can do is, of course, to cut inflation. Inflation lies at the heart of many of the issues that we as a country are facing. It is precisely why in his new year speech, my right hon. Friend the Prime Minister made, as his very first pledge to the British public, the promise to halve inflation. We want to cut inflation, because if we cut inflation, prices across the board begin to fall. The poorest, who are the ones hurt most by inflation, will then begin to see their money going a little further, helping them with the cost of living. As well as cutting inflation, we have to get the economy growing and we need to continue on our path of fiscal prudence. That is why I have set out the Government’s responsibilities when it comes to the administration of VAT and its importance as a single revenue raiser towards the cost of the public services that we care so very much about.

The hon. Member for East Dunbartonshire asked about emergency workers. I will try to chase that one down. If I am completely honest, I was not at the urgent question, but I will get back to her on that issue. We take the point, of course, that people working in our emergency services are outside day in, day out. We absolutely accept that and we thank them for the services that they provide on behalf of us all. Whatever our disagreements in this Chamber, we can certainly agree on that.

In the fight against cancer, we are taking action to improve early diagnosis for all cancers. That is why the NHS long-term plan sets out the ambition for 75% of cancers to be diagnosed at stage 1 or 2 by 2028. A recent NHS campaign called Help Us Help You focuses on the barriers to earlier presentation across all cancer types and aims to address some of the underlying challenges to earlier diagnosis. That campaign ran during March and June of last year and in both months saw a 1,600% increase in the number of visits to the NHS website’s cancer symptoms landing page. In addition, the cancer programme has worked with the British Association of Dermatologists and NHS England’s out-patient recovery and transformation programme on a timed pathway for suspected skin cancers, as well as guidance on implementing teledermatology and community spot clinics. Both documents promote the use of technology and efficient pathways to prioritise and quickly diagnose suspected melanomas so that treatment can start as quickly as possible.

I conclude by thanking again the hon. Member for East Dunbartonshire for highlighting this important issue and by thanking hon. Members from across the House for their contributions and, in particular, for sharing their personal experiences. I know that we all continue to advise the public to buy sunscreen but also to follow the other guidelines presented by our NHS to help to tackle skin damage. There is a need to protect people’s health against the very real risks that have been presented in this Chamber today.