Asked by: Lisa Cameron (Conservative - East Kilbride, Strathaven and Lesmahagow)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the effect on the UK's fashion and textile sector of the decision to end the VAT Retail Export Scheme.
Answered by Kemi Badenoch - President of the Board of Trade
On 11 September 2020, the Government 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) following the transition period. The following rules were implemented on 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) can purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.
- Personal allowances apply to passengers entering Great Britain from any destination outside of the UK, with alcohol allowances significantly increased.
- The VAT Retail Export Scheme (RES) in Great Britain has not been extended to EU residents and has been withdrawn for all passengers.
- The concessionary treatment on tax-free sales for non-excise goods has been removed across the UK.
The Government published a consultation which ran from 11 March to 20 May 2020. During this time the Government held a number of virtual meetings with industry stakeholders to hear their views and received 73 responses to the consultation. The Government has also met and discussed these changes with many 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. A technical note has also been issued to stakeholders to expand on this document and to respond to issues raised by stakeholders.
On 25 November 2020 the independent Office for Budget Responsibility (OBR) set out their assessment of the fiscal impact of the withdrawal of the VAT RES.
Factoring in a higher-than-usual elasticity of 1.9 to account for spending on luxury goods, the OBR estimate that the withdrawal of the VAT RES will result in a significant direct Exchequer saving of around £400 million per year, once passenger numbers recover from the impacts of Covid-19. Based on the 1.2 million users of the scheme who received a refund in 2019, this includes an assumption that approximately 20,000 – 30,000 fewer tourists visit Great Britain a year. That is 0.07% of the 40 million visitors to the UK in 2019.
The OBR also looked at this package in the round when assessing the indirect impact on the economy – including the effects of extending duty-free sales – alongside the substantial support provided to the economy and retail industry.
Asked by: Lisa Cameron (Conservative - East Kilbride, Strathaven and Lesmahagow)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what discussions his Department has had with the British Retail Consortium on introducing a fit to trade licensing scheme to tackle labour exploitation in garment factories.
Answered by Paul Scully
BEIS and Home Office officials have had two meetings with representatives from the British Retail Consortium to understand more about their proposal to introduce a fit to trade licensing scheme for garment factories, and what action brands are taking to ensure compliance throughout their supply chain. I also regularly meet with the British Retail Consortium as part of his frequent engagement with the retail sector.
BEIS and the Home Office are also working in partnership with the industry through the Apparel and General Merchandise Public and Private Protocol, a partnership between enforcement bodies and industry partners, including, the British Retail Consortium, UK Fashion and the Textile Association. This is aimed at tackling all forms of labour exploitation in the garment industry.
The Government will continue to work closely with the multi-agency Taskforce, which has been established in Leicester to tackle allegations of exploitation in the sector, to consider the most appropriate measures to tackle labour exploitation.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps his Department is taking to encourage a more circular fashion and textile industry; and if he will make a statement.
Answered by Rebecca Pow - Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs)
In line with the Resources and Waste Strategy for England (2018) we are taking a range of actions to tackle environmental damage and promote greater circularity in the fashion and textiles sector.
Through the Waste and Resources Action Programme (WRAP) we are supporting an industry-led voluntary agreement - the Sustainable Clothing Action Plan (SCAP) 2020. This has seen SCAP signatories reduce their water and carbon footprints by 18.1% and 13.4% respectively per tonne of clothing between 2012 and 2018. Work is currently underway to develop an ambitious new phase of the voluntary agreement for the future, focussed on enhancing the circularity of the sector.
We have committed to consult on extended producer responsibility and other policy measures for five priority waste streams, including textiles, by 2025, with two of these to be completed by 2022. We are also exploring regulatory requirements on product design and consumer information in order to support durable, repairable, and recyclable clothing and textiles. The Environment Bill includes clauses that will enable resource efficient product design and information requirements to be set through secondary legislation.
In addition, we are supporting the textiles reuse and recycling sector, which has experienced particular challenges due to the Covid-19 pandemic, through the WRAP-administered Resource Action Fund.
Our detailed plans to promote sustainable practices in the textiles sector will be included in a new Waste Prevention Programme, to be published for comment in the next few months.
Asked by: Lisa Cameron (Conservative - East Kilbride, Strathaven and Lesmahagow)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what recent assessment she has made of the level of labour exploitation in garment factories in the UK; and if she will make a statement.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government is committed to tackling labour exploitation and protecting workers’ rights. We have taken a number of steps to deal with the issues in the textiles sector and take this issue very seriously. In light of the very concerning recent allegations of illegal and unsafe working conditions for garment workers in Leicester, a multi-agency Taskforce, led by the Gangmasters and Labour Abuse Authority (GLAA) has been established to enable the relevant enforcement bodies to work together at pace, to take appropriate action against unscrupulous employers and individuals who exploit workers.
We are also working in partnership with the industry through the Apparel and General Merchandise Public and Private Protocol, a partnership between enforcement bodies and industry partners - including, the British Retail Consortium, UK Fashion and the Textile Association – aimed at tackling all forms of labour exploitation in the garment industry. Given the serious nature of the allegations in Leicester and the spectrum of labour market non-compliance issues that have been raised, it is imperative that we have a strong evidence base to inform the options we are considering to protect vulnerable workers and drive up standards. The Government will continue to work closely with the taskforce to consider the most appropriate measures to tackle labour exploitation in this sector.
The Government is committed to improving enforcement of employment rights. We have announced the intention to introduce a Single Enforcement Body, which will provide a clearer route for workers to raise a complaint and get support, enabling more coordinated enforcement action and the use of pooled intelligence to better target proactive enforcement. The public consultation on the establishment of the new Single Enforcement Body included questions on extending licensing to other high-risk sectors. We will publish a response to this consultation in due course.
Asked by: Lisa Cameron (Conservative - East Kilbride, Strathaven and Lesmahagow)
Question to the Home Office:
To ask the Secretary of State for the Home Department, if she will introduce a fit to trade licensing scheme to tackle labour exploitation in garment factories.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government is committed to tackling labour exploitation and protecting workers’ rights. We have taken a number of steps to deal with the issues in the textiles sector and take this issue very seriously. In light of the very concerning recent allegations of illegal and unsafe working conditions for garment workers in Leicester, a multi-agency Taskforce, led by the Gangmasters and Labour Abuse Authority (GLAA) has been established to enable the relevant enforcement bodies to work together at pace, to take appropriate action against unscrupulous employers and individuals who exploit workers.
We are also working in partnership with the industry through the Apparel and General Merchandise Public and Private Protocol, a partnership between enforcement bodies and industry partners - including, the British Retail Consortium, UK Fashion and the Textile Association – aimed at tackling all forms of labour exploitation in the garment industry. Given the serious nature of the allegations in Leicester and the spectrum of labour market non-compliance issues that have been raised, it is imperative that we have a strong evidence base to inform the options we are considering to protect vulnerable workers and drive up standards. The Government will continue to work closely with the taskforce to consider the most appropriate measures to tackle labour exploitation in this sector.
The Government is committed to improving enforcement of employment rights. We have announced the intention to introduce a Single Enforcement Body, which will provide a clearer route for workers to raise a complaint and get support, enabling more coordinated enforcement action and the use of pooled intelligence to better target proactive enforcement. The public consultation on the establishment of the new Single Enforcement Body included questions on extending licensing to other high-risk sectors. We will publish a response to this consultation in due course.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he is taking to ensure that garment manufacturers in Leicester work with trade unions to set employee terms and conditions.
Answered by Paul Scully
We are deeply concerned by reports of illegal and unsafe working conditions for garment workers in Leicester.
Collective bargaining is largely a matter for individual employers, their employees and their trade unions. The Government encourages employers to engage with their workforce’s representatives, whether these be union or non-union representatives.
The Gangmasters and Labour Abuse Authority and Leicester City Council, both members of the Taskforce that has been established in response to the allegations of labour abuse in Leicester, have engaged with the TUC on the issues in the garment trade. We are also working with industry through the Apparel and General Merchandise Public and Private Protocol, a partnership between enforcement bodies and industry partners – including the British Retail Consortium, UK Fashion and the Textile Association – aimed at tackling all forms of labour exploitation in the garment trade
Asked by: Mark Hendrick (Labour (Co-op) - Preston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to prevent the exploitation of people working in UK garment factories.
Answered by Paul Scully
In light of the very serious recent allegations of illegal and unsafe working conditions for garment workers in Leicester, a multi-agency Taskforce, led by the Gangmasters and Labour Abuse Authority (GLAA) has been set up in Leicester to enable the relevant enforcement bodies to work together at pace to take appropriate action against unscrupulous employers and individuals who exploit workers. The taskforce includes: HMRC National Minimum Wage; Employment Agencies Standards Inspectorate (BEIS); Leicestershire Police; National Crime Agency; Leicester City Council; Department for Work and Pensions and Immigration Enforcement (Home Office). The Taskforce has identified around 200 businesses and premises for investigation and is conducting a programme of site visits.
We are also working with industry through the Apparel and General Merchandise Public and Private Protocol, a partnership between enforcement bodies and industry partner – including the British Retail Consortium, UK Fashion and the Textile Association – aimed at tackling all forms of labour exploitation in the garment trade.
The Government is committed to improving enforcement of employment rights. We have announced the intention to introduce a Single Enforcement Body, which will provide a clearer route for workers to raise a complaint and get support, enabling more coordinated enforcement action and the use of pooled intelligence to better target proactive enforcement.
Asked by: Gareth Bacon (Conservative - Orpington)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what steps are being taken to eradicate modern slavery in the fast fashion industry.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government is committed to tackling modern slavery in all sectors, including fashion, which is why in 2017 we expanded the remit of the Gangmasters and Labour Abuse Authority (GLAA), giving specially trained officers stronger powers under the Police and Criminal Evidence Act 1984 to investigate labour market offences across all sectors of the economy in England and Wales. We have also committed to creating a single enforcement body to crack down on employers abusing the law, to protect vulnerable workers and create a level playing field for the majority of employers that comply with the law.
To address risks in the fashion sector specifically, the former Prime Minister launched 'The Apparel and General Merchandise Public and Private Protocol' in 2018. The protocol is a partnership between enforcement bodies such as the GLAA and the Health and Safety Executive (HSE) and industry partners, including the British Retail Consortium, UK Fashion and the Textile Association, and commits its signatories to working together to eradicate slavery and exploitation in textile supply chains.
We are also committed to improving transparency in domestic and global supply chains. Under section 54 of the Modern Slavery Act 2015, the UK became the first country in the world to require large businesses in all sectors to report on how they are tackling modern slavery in their operations and supply chains. We are committed to continuously strengthening our approach and in July 2019 the Home Office launched a public consultation on an ambitious package of measures designed to enhance the impact of transparency, including mandating specific topics organisations must report on, introducing a single reporting deadline and extending transparency to the public sector. The Government response to the consultation will be published this summer.
We are also developing a new gov.uk registry for statements published under the Modern Slavery Act, to enable greater scrutiny from consumers, investors, civil society and others and drive a “race to the top".
Asked by: Andy McDonald (Labour - Middlesbrough)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he has taken in response to the recommendations set out in paragraph 50 of the Sixteenth Report of the 2017-19 Session of the Environmental Audit Committee entitled Fixing Fashion: clothing consumption and sustainability, HC1952, to (a) pursue a more proactive approach to the enforcement of the national minimum wage and (b) provide HMRC’s National Minimum Wage team with greater resourcing to increase their inspection and detection work with regard to workers in the garment industry receiving less than the minimum wage and suffering serious breaches of health and safety law in their workplace.
Answered by Paul Scully
The Government is deeply concerned by the reports of illegal and unsafe working conditions for textile workers in Leicester, especially in light of the recent increase in COVID-19 infections.
The main labour market enforcement bodies (the HMRC National Minimum Wage team and the Gangmasters Labour Abuse Authority), as well as the Police and the Health & Safety Executive, have been working closely with Leicester Council to set up the Leicester Compliance Task Force. The key aims of the taskforce is to address broader labour market and health and safety issues by using local knowledge to improve understanding of the exploitation risks, increase awareness, support victims and ensure compliance.
Since 2017, a number of operations have been undertaken in the Leicester area linked to potential exploitation, including underpayment of the minimum wage. Where breaches have been found appropriate enforcement action has been taken, including warning letters, recovery of unpaid wages, penalties, and director disqualifications.
The Government has more than doubled the budget for National Minimum Wage compliance and enforcement to £27.5 million for 2020/21, up from £13.2 million in 2015/16. Increasing the budget allows HMRC to focus on tackling the most serious cases of wilful non-compliance. It also increases the number of compliance officers available to investigate minimum wage complaints and conduct risk-based enforcement in sectors where non-compliance is most likely.
Asked by: Anthony Mangnall (Conservative - Totnes)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps his Department is taking to support environmental sustainability in the fashion and textile industries.
Answered by Rebecca Pow - Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs)
In the landmark Resources and Waste Strategy for England (2018), the Government committed to develop policy measures to promote sustainable practices in the clothing and textiles industries. We are continuing to work with industry through WRAP on the Sustainable Clothing Action Plan (SCAP), and are currently engaged in developing an ambitious new phase of the voluntary agreement for 2021-2030. The most recent figures show that between 2012 and 2018 signatories to the SCAP reduced their water and carbon footprints by 18.1% and 13.4% respectively.
We are seeking enabling powers in the Environment Bill to introduce ecodesign and product information requirements, subject to consultation. Through secondary legislation these requirements could be applied to support durable, repairable, and recyclable textiles. We also identified textiles in the Resources and Waste Strategy as a priority area on which to consult for an Extended Producer Responsibility scheme.
We are supporting the textiles reuse and recycling sector, which has experienced particular challenges due to the Covid-19 pandemic, through the WRAP-administered Resource Action Fund. The textiles fund makes a total of £1.5 million available, for small grants of £20 000 to £170 000. Our plans to promote sustainable practices in the textiles sector will be built on and enhanced in a new Waste Prevention Programme, which is currently in development.