Victoria Atkins
MP for Louth and Horncastle · Conservative · United Kingdom
“Oh dear. This may be the last time the Secretary of State gets to give such an inadequate answer to what is a reasonable question about her grip on her Department. But let us look at Labour’s wider chaos.”
“In recent weeks, DEFRA’s quangos have made headlines: the Environment Agency is failing to prosecute waste criminals, instead going after virtuous volunteers who are cleaning up the rivers for it; Natural England is demanding more madcap fish schemes at Hinkley Point C, on top of its recommended £700 million fish disco policy, all of whic…”
“There are many questions still left unanswered in this report, and I hope that the Secretary of State will try to answer them rather than deflect, because that has been noticed. The plan looks to double the funding for Environment Agency inspections. Why are this Government focusing on bureaucracy rather than helping farmers survive?”
“In another leap from reality, the Government’s negotiations with the EU get barely a mention in this document, despite the enormous consequences they will have for farming businesses. CropLife UK has estimated that this EU reset could drain £810 million from UK farms and sacrifice almost 9,000 jobs from our rural constituencies.”
“We Conservatives view DEFRA as a vital economic Department, so we agree with its efforts to recalculate farming and food producers’ contributions to the economy. By the way, I note that Reform calls itself the farmer’s friend, yet there is not a single Reform MP in the Chamber.”
“As Labour MPs and Ministers in the Department for Environment, Food and Rural Affairs voted repeatedly for the family farm and family business taxes, DEFRA Ministers shut down farming payments without notice, including the SFI. Sadly, the record of this Government is rising food prices and a record number of farms closing.”
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“The clarification has been made because the Home Office wanted to ensure that it defines that accurately, protects citizens’ rights and permits Government agencies, law enforcement agencies and other agencies to collect and review the data necessary to protect us all. We are tabling this amendment now at the first opportunity we have had, to ensure that that phrasing still permits HMRC to collect the vital data that we need to ensure that our taxes are collected properly. To sum up my point on new clause 5, the civil information powers allow HMRC to continue to collect vital revenue to fund our public services.”
“That gives me the opportunity to declare that I sat not only on the Joint Committee for that Bill but on the Select Committee. There was a great deal of concentration and discussion, as I recall—the House will have to forgive me as I am rolodexing back several years in my memory—about the meaning of communications data, because of the sensitivities in relation to some of the powers rightly given to our security services in order to safeguard national security and for other purposes. There has been some debate about how the General Data Protection Regulation and the Data Protection Act apply in the years that have fallen since.”
“I have genuinely enjoyed my hon. Friend’s contributions not just today but at earlier stages, and I enjoyed being grilled with the Committee’s very thoughtful questions last week. In the spirit of agreement and co-operation, would it meet with her and the Committee’s approval if I committed to write to the Committee once a tax year, including this tax year, on the subject of simplification? The Committee could look at that report, decide for itself how the Government of the day are doing and, of course, call Ministers to account before the Committee.”
“That includes opportunities to streamline customs declaration requirements and engage with traders on plans to rationalise and digitise HMRC’s authorisation processes, all of which is obviously essential with our bright new future out of the EU. The Chancellor has also set out that he is asking officials to consider tax simplification ahead of every fiscal event. Of course, hon. Members will have ample opportunity to scrutinise the Government’s progress on simplification through the finance Bill process each year. We also continue to publish tax information and impact notes, which set out the expected impact of tax policy changes on individuals and businesses, and HMRC’s annual customer experience surveys, which measure taxpayers’ overall experience of interacting with HMRC.”
“Friend the Member for South Northamptonshire (Dame Andrea Leadsom) said, these need to be practical simplification measures. I very much hope that the consultation on the cash basis will provide some of that practicality that she and others so wish for. We are also taking further action to simplify the tax system through the Bill. A great example of that is the permanent £1 million limit to the annual investment allowance, which provides 100% first-year relief for qualifying main and special-rate investments in plant and machinery, simplifying the tax treatment of capital expenditure for 99% of businesses. The Bill will also simplify the process of granting share options under an enterprise management incentive scheme. We also announced at spring Budget our efforts to simplify the customs import and export processes.”
“With regard to new clause 2, the Chancellor has set a clear mandate to Treasury and HMRC officials to focus on both the simplicity of new tax policy design and simplifying the existing tax rules and administration at all times. At spring Budget, the Chancellor announced the first steps of that work, including a range of improvements to make it easier for businesses, especially small businesses, to interact with the tax system. That includes—this is by no means an exhaustive list—a systematic review to transform HMRC guidance and key forms for small businesses, and a consultation on expanding the cash basis, which is a simplified way for over 4 million sole traders to calculate and pay their income tax. As my right hon.”
“I very much share the Chancellor’s ambition and determination to try to bring some simplicity to some of these reliefs and rules. We very much want to engage constructively with the Treasury Select Committee and, indeed, the whole House in our efforts to do so. If I may, I will just touch on amendment 7. We have introduced through this Finance Bill our determination to put simplification at the heart of the tax system and our consideration of it, which is why we will not be able to renege on our commitment to abolish the Office of Tax Simplification. We are going to stay the course with that policy, but we genuinely see the Bill as an opportunity to enable us to put simplification at the heart of the Treasury.”
“Again, I very much thank our Treasury Select Committee colleagues for their interest, their expertise and their commitment on this issue, and their scrutiny of opportunities for tax simplification. I have read the report already, which I hope shows my commitment to simplification. I hope my hon. Friend will understand if I do not respond in detail to the report now; we will of course respond formally to it in due course. My right hon. Friend the Chancellor and I remain deeply committed to simplifying the tax system. My right hon. Friend the Member for North West Hampshire (Kit Malthouse) intervened earlier on: he is a chartered accountant, so he knows with great expertise just how complicated some aspects of the tax system can be.”
“Friend the Member for West Worcestershire (Harriett Baldwin), in giving evidence last week, I said that VAT is the most complex part of tax law, which in itself is incredibly complex. I think I am about to prove that pillar 2 may be joining that very elevated rank. If I may, I shall concentrate on some of the amendments that have been the focus of the House this afternoon; I hope colleagues will understand if I do not address some amendments that have not been spoken to, or will not be pushed to a Division. First and foremost, I will deal with tax simplification—in new clause 2 and amendment 7, which have been tabled by my hon. Friend the Member for West Worcestershire.”
“I should have known by now that my hon. Friend the Member for Amber Valley (Nigel Mills) would put his points succinctly and with expertise. He has taken me a little by surprise in ending as he did, but I thank him greatly for his comments. May I conclude this stage of the scrutiny of the Bill by first of all genuinely thanking all right hon. and hon. Friends and Members for their contributions on Report? It has genuinely been the sort of scrutiny that shows this House in its best light: although there has been a certain amount of party politicking in certain parts of the Chamber, a very detailed set of questions and concerns has been raised about some of the most complex parts of the Bill. When I responded to the Chair of the Treasury Select Committee, my hon.”
“That is because pillar 2 is designed as an interlocking set of rules ensuring that low-taxed profits will be taxed even if the UK or other countries do not move ahead. This is why we are determined to introduce or implement pillar 2 from 31 December this year, along with other EU member states and with Australia, Canada, Japan and Switzerland, so that we are moving in lockstep with our international peers.”
“It is designed to protect against the risk of harmful tax planning by multinational groups and to promote fair and open competition on tax policy. It is really to prevent those large multinationals from shifting profit out of the UK to those parts of the world that charge far lower tax rates than us. This will help to ensure that profits generated here in the UK are taxed in the UK, and it will strengthen the UK’s international competitiveness through placing a floor on the low tax rates that have been available in some countries. A lot of questions have been asked about implementation, and I shall go into detail on them in a moment, but if we do not implement these rules, the tax will still be collected, but by another jurisdiction.”
“Friends have and, indeed, the level of scrutiny they have quite rightly given it as the Bill has made its journey through the House. First and foremost, if I may—I am very keen to get this on the record, because I know that my right hon. Friend the Member for Witham (Priti Patel) will rightly expect such commitments on the record—before I make the commitments that the Chancellor has made in his letter, I will set out the background to pillar 2. Although my right hon. Friend the Member for Witham clearly has a great deal of knowledge about this area, it is fair to say that not everybody in Parliament will have the same understanding. By way of an explainer, pillar 2 will ensure that large multinational groups with revenues of more than £750 million pay a minimum effective tax rate of 15% in every jurisdiction they operate in.”
“Friend the Member for West Worcestershire to commit today to reporting annually—that is, in each tax year—to the Committee to provide an overarching summary of the Government’s progress on the simplification. To be very clear, I intend that to start this tax year, because I take this very seriously and I very much hope that Committee members and others in the House will share my intentions in so doing. I therefore hope that my hon. Friend and Committee members will not feel the need to press their amendments and new clauses. I turn now to the subject of the global minimum tax legislation, which is again a complicated area. If I may, Madam Deputy Speaker, with your munificence, I will just spend a little bit of time on it, precisely because I understand the concerns that my hon.”
“I am not in a position to commit to those metrics at the moment, but I promise I will come back to her when we have a settled package that we think will address not only the concerns of the Committee but the wider concerns beyond simplification, such as fairness and encouraging growth. HMRC also reports annually in its reports on its objective to make it easy to get tax right. As I have just set out, we are actively considering how to develop a suite of metrics to measure progress on that. Precisely because we recognise the concerns and the thoughtful considerations of the Treasury Committee and others across the House, I was very pleased at being able to intervene on my hon.”
“That is a very interesting point. I hope the Chair will not mind my saying so, but when I gave evidence last week, quite rightly I was challenged about how we measure success. This is incredibly complex, as my right hon. Friend will appreciate. For example, with the corporation tax rises, we have introduced the tapering because we have the policy intent of trying to help businesses that are small or perhaps finding their feet, and we do not want to be charging them 25% corporation tax if they have not reached the levels of profit set out in the Bill. The metrics we will use are very much being considered.”
“They have worked extremely hard, particularly Holly, a member of my private office. I thank the Parliamentary Counsel; the Bill Committee Chairs on the Committee Corridor; the Doorkeepers; the Clerks; the Whips, of course; other Treasury Ministers who have helped in this; and, of course, you, Madam Deputy Speaker, for your consideration. I thank your fellow Deputy Speakers for their consideration, too. Finally, I thank all hon. and right hon. Friends and Members across the House who have contributed to the scrutiny of this important Bill. I hope that, at the end of this, we can be very proud of the measures that have been taken forward as part of our Budget for growth.”
“As the Bill has received such scrutiny, I do not propose to go into a detailed summary of the Bill. I just wish to thank the many people involved in bringing such a piece of legislation forward, because they work tirelessly behind the scenes and rarely receive the thanks they deserve. First and foremost, I thank officials across the Treasury and HMRC for all their help, advice and expertise in creating the Bill and the proposals within it. In particular, I thank the Bill manager, Mikael Shirazi, who has navigated the Bill with great aplomb, often managing teams of tens of officials on my screens as I was having briefings. I am extremely grateful to him and all the Bill team for their very hard work. I must also thank my private office—again, the unsung heroes of any ministerial office.”
“I beg to move, That the Bill be now read the Third time. My right hon. Friend the Chancellor delivered a Budget for growth. He was clear that this Government’s focus is not just growth from emerging out of a downturn, but long-term, fiscally sustainable, healthy growth. The Finance (No. 2) Bill, which Members of this House have had the opportunity to scrutinise and debate over the last three months, delivers on these commitments. It takes forward measures to support enterprise and grow the economy by encouraging business investment and helping to increase employment. It legislates for announcements made at previous fiscal events, which take advantage of our opportunities outside the EU, and it implements the tax measures needed to continue improving and simplifying our tax system to ensure that it is fit for purpose.”
“It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) on securing this debate, and I thank him sincerely for the personal experiences that he has brought into it. For what it is worth, I did not know that my right hon. Friend has lived with dyslexia. I have seen him so many times in the Chamber, both at the Dispatch Box and as am eminent Back Bencher. I am genuinely in awe of his ability to memorise the briefs that we get. Anyone who has had to stand at the Dispatch Box, whether in Government or in Opposition, will know how densely written and complex they can be.”
“I have had an excitable seven, eight, nine, 10 and then 11-year-old throughout my career in this place, and having an audiobook that really grips a young child’s attention can be a godsend to parents struggling on long journeys. I am veering into flippancy, but there is a much more serious point about what an audiobook can mean for an individual’s ability to read and enjoy reading. My right hon. Friend the Member for Hemel Hempstead gave the compelling example of his constituent who is losing her sight and with it, she fears, her ability to continue enjoying reading. I take that very seriously. I understand his point about the difference in timing and the implications of VAT. We believe that a love of reading should be ignited at a young age, which is why we have committed to ensuring that early reading is taught well in schools.”
“Ensuring that everybody is able to access books in all their forms is something that this Government take very seriously. Driving up standards in literacy has been our long-term priority in education, and our focus over the past decade has been on improving the teaching of reading for everybody. We have given students across the country a solid foundation in reading. That is not just to give young people the skills that are vital for their success in later life, but—as the hon. Member for Motherwell and Wishaw (Marion Fellows) put it so eloquently—to encourage a lifelong love and respect for one of life’s greatest pleasures. I very much understand the enormous pleasures that audiobooks can bring, as someone whose constituency is quite some distance from London—I know the hon. Lady’s is, too.”
“My right hon. Friend makes an important point more generally, if I may have your munificence for a moment, Mr Sharma. It is so important that people such as my right hon. Friend show that dyslexia or other learning conditions need not be a barrier in a person’s ability to achieve success nowadays. In many ways, he will have been at the forefront of that change. I was horrified to hear about the reaction he had at school. I hope and trust that nowadays, children with a similar condition would not have that reaction; it would be much better understood. The fact that he rather endearingly described that he thought it was a tropical disease shows just how far we have come. He and others have been at the forefront of that, and I am genuinely grateful to him for sharing his experiences with us.”
“Through the hub programme, literary specialists provide tailored support to schools, including by running events to showcase excellent practice in teaching and reading, and by working with local schools to develop their practice. So far, it has supported 1,600 schools intensively, and focuses on supporting the children who are making the slowest progress in reading, many of whom come from disadvantaged backgrounds.”
“Although this part of my speech focuses on children, I very much accept the point about people having a love of reading throughout their life. I want to mention the positive work, which I hope is welcomed across the House, in schools to improve literacy and give that love of reading to young people. The English hubs programme promotes a love of reading and spreads best practice in teaching pupils to read. It supports schools in England in providing excellent phonics and early language teaching. The hon. Lady will be able to help us with what happens in Scotland. The ability to teach reading, particularly through the use of phonics, is very much recognised.”
“We believe that the measures that we continue to take to support reading are the best way to target our resources to deliver this wonderful benefit to everyone. However, we do not rest on our laurels; that is why the reading framework guidance will also focus on the needs of children living with special educational needs. I thank my right hon. Friend for his debate, and I thank hon. Members from across the House for their contributions. I am sorry that I am not able to give quite the news that my right hon. Friend was hoping for, but I look forward to discussing the matter with him in future.”
“Some might say, “Hang on a minute; if the Government have imposed the VAT cut, why can’t they force businesses to pass on that cut?” We set the tax framework, and businesses must operate within it, but if a business chooses to absorb that tax relief as profit, rather than pass it on to consumers, that is a commercial decision taken by the business. That may be something that others outside this Chamber may wish to reflect on when considering the issue as a whole. In conclusion, we understand why my right hon. Friend the Member for Hemel Hempstead called for this debate. We agree that literacy is a vital issue, not just for our youngest citizens but throughout our lifetimes. We are confident that our record over the past 13 years shows that we are making the right decisions for children in school.”
“Also, I am obliged to mention, as in any debate on VAT, that it is the third largest tax in the UK in terms of yield, and it allows the Government and the state to provide public services. It is forecast to raise £161 billion this financial year alone. Many public services are supported from those funds, so we have to look very carefully at every request to change or tweak the VAT system, or to use it to meet the laudable aims and concerns of colleagues from across the House. There was a question about the VAT cut.”
“There is also no guarantee that the benefit of any VAT relief would be passed on to the consumer in the form of lower prices. That is quite an important point. We all assume that the VAT exemption announced in March 2020 was passed on to consumers by businesses, but it seems that that is not necessarily the case. It is not for me to advise either right hon. and hon. Members or charities, but where that benefit is not being passed on to consumers, perhaps publishers of e-books and so on should be asked why. Audiobooks are enjoyed by a wide range of consumers, so the majority of any relief would primarily be felt by those not living with disabilities that prevent them from accessing physical and digital books.”
“I do not have figures that I can give her today, because I need to satisfy myself that any figures I give are accurate, but I take her point, and I will write to her in due course, when I am in a position to do so, because that is a very fair question. As was noted by the hon. Member for Ealing North (James Murray), who spoke for the Opposition, there is a sense that the law has to try to keep pace with the speed of change in technology, which can be difficult; I think we all acknowledge that. For example, many audiobooks are now provided through subscription, along with other forms of media, such as podcasts, and trying to introduce distinctions between these different types of products would introduce additional complexity into the VAT system.”
“There will be categories of publication where, because the physical form does not have zero rating, the digital form does not either. I say that because audiobooks—and podcasts, which the hon. Member for Edinburgh West (Christine Jardine) mentioned—would not come under that approach, if one were to extend it to audio publications. We say that there is no such inconsistency in relation to audiobooks, but I appreciate that that is the point under discussion today. As colleagues know, any VAT relief would come at a cost to the Exchequer, and it would be very difficult to target. The hon. Member for Motherwell and Wishaw said that the RNIB has asked if this approach has been costed, both for people living with sight conditions and the public more generally. My answer to her is that there is ongoing work on that.”
“Although there are exceptions to the standard rate, these have always been strictly limited by both legal and fiscal considerations. We did indeed cut the VAT on certain digital publications in the March 2020 Budget to support literacy and reading in all its forms, and to make it clear that e-books, e-newspapers, e-magazines, and academic e-journals are entitled to the same VAT treatment as their physical counterparts. The extension of the zero rate of VAT to e-publications was introduced to address the inconsistency of approach between certain physical publications and their digital counterparts, so that there is a mirroring between the two; if a publication in physical form has a zero rating, then in digital form it now has the same exemption.”
“These cohorts may require extra support, so the next reading framework to be published will include guidance on supporting children who are struggling to read, including those with special educational needs. The Government speak regularly to experts, including SEND specialists, specialist schools and English hubs, about how we can support teachers to ensure that children with dyslexia and other learning difficulties can progress well in their reading, and meet the expectations on them by the time they leave primary school. If I may, I will now turn to the subject of VAT. Of course, as colleagues from across the House know, VAT is a broad-based tax on consumption, and the 20% standard rate applies to most goods and services.”
“England came fourth out of the 43 countries that tested children of the same age for primary reading proficiency in the Progress in International Reading Literacy Study, the results of which were published last month. That is a real success, and we know that it is down to the concentration on phonics and is driven by improvements for those pupils who have perhaps struggled in the past. I am very grateful, as I know my right hon. Friend the Member for Hemel Hempstead is, to ministerial colleagues whose efforts over the years have driven those changes. However, we also recognise the importance of provision for children with special educational needs and disabilities, including children who live with some of the conditions that we have heard about today, including partial sightedness and blindness, dyslexia and other learning conditions.”
“We have provided £8.7 million of funding this academic year to support schools in purchasing complete systematic synthetic phonics programmes for their curriculum—that is a good example of Department for Education jargon. By ensuring high-quality phonics teaching and improving literacy, we are giving children a solid base on which to build as they progress through school. We published the reading framework in 2021. Over 90% of schools have read that framework, which provides guidance on how to improve the teaching of reading. It focuses on the early stages of teaching reading, and on the contribution of talk, stories and systematic synthetic phonics. It also helps schools to meet expectations for teaching early reading. We very much appreciate the fact that these measures are paying off.”
“I hope my right hon. Friend will understand that this is not my area of expertise, and that I am here responding on VAT, but I will take away his observations on the hubs. Schools find their own ways of teaching their children. I recently had the pleasure of a Friday afternoon visit to a wonderful primary school in my constituency, Mareham Le Fen Primary School. They have “mystery reading”, where someone reads an extract of a book to the entire primary school to try to encourage pupils to finish that book. Schools across the country have programmes like that to encourage reading and to make it a real pleasure for children, and I very much support any efforts to bring that about.”
“However, not all social housing providers in receipt of the additional funding would benefit from those exemptions, so we are looking to correct that and to enable registered providers of social housing to benefit from the exemption when they use the new funding. It is a sensible clarification and I hope that the Committee will support the clause standing part of the Bill.”
“In December last year, the Government announced an additional £650 million for the Homes for Ukraine support package, which included giving local authorities in England an additional £0.5 billion to reduce homelessness by obtaining housing to reduce pressure on social housing and to help accommodate Ukrainian and Afghan refugees. On 28 March this year, the Government announced a further £250 million of funding, the majority of which will be used to house Afghan families in bridging accommodation. The rest will be used to ease existing homelessness pressures. The additional funding, as I said, is allocated under section 31 of the Local Government Act, and the existing stamp duty land tax system includes an exemption for social housing purchases.”
“It is a pleasure to serve under your chairmanship, Mr Stringer. As a matter of housekeeping, I should say that the shadow Minister, the hon. Member for Ealing North, asked me questions on Tuesday regarding the implementation of changes to the company share option plan, and I committed to write to him with those details. That letter has gone to him this morning, with copies deposited in the Libraries of the Houses. Indeed, I have also arranged for it to be sent to the other Committee members, for their convenience. The clause will amend existing stamp duty land tax rules to ensure that registered providers of social housing are exempt from the tax when purchasing property using funding allocated under section 31 of the Local Government Act 2003.”
“I can answer yes to the question that the hon. Member for Ealing North asked about the £250 million. On the question that the hon. Member for Wallasey asked about the number of houses, DLUHC has estimated that it will be about 1,300 homes. She will understand—indeed, we discussed this when I was Minister for Afghan Resettlement—that one of the complexities with Afghan families is that their larger family sizes mean that there is not the availability of housing stock that there is for slightly smaller families. That is why it is taking a bit of time. The hon. Member for Dunfermline and West Fife asked about Scotland, and I commit to write to him. This is across the board, so I imagine the scheme will be UK-wide, but I will get that confirmation for him by the end of the sitting.”
“Lady to speak to the Minister for Veterans’ Affairs, who is leading on the issue.”
“I must direct the hon. Lady to the Minister for Veterans’ Affairs, who is now leading on that. He has overall control of the programme of rehousing for Afghan refugees, and the Homes for Ukraine scheme—obviously that is a very separate system. The scheme is one of the tools available to the Government, which is why we are making the stamp duty changes to assist local authorities in their efforts to find homes for refugees. It will not be the only way in which we find accommodation for those families; there are other ways, including the military helping with accommodation for those who formerly served or helped the armed forces when they were in Afghanistan. It is one tool, and we want to make it as easy as possible for local authorities to use. I encourage the hon.”
“I am very happy to. The scheme is certainly not restricted to Ukrainian and Afghan refugees. It is designed to meet all local authority social housing needs. It is a measure to help alleviate overall social housing pressures on local authorities, precisely because we realise that the enormous generosity of the United Kingdom in helping Ukrainian and Afghan refugees has put increased pressures on local authorities when it comes to social housing. We want to ensure that this is sorted out for local authorities, as part of our humanitarian response to those crises—we are also long enough in the tooth to understand that there may be other humanitarian crises in the future. Question put and agreed to. Clause 313 accordingly ordered to stand part of the Bill.”
“On a point of order, Mr Stringer. Before we move on, in relation to the clarification that the hon. Member for Dunfermline and West Fife asked for, stamp duty applies only in England and Northern Ireland. Scotland and Wales have their own land transaction taxes. Obviously, we are very happy to work with the devolved authorities if there is a point of clarification that they need on that. Clause 314 Deposit schemes Question proposed , That the clause stand part of the Bill.”
“It will not touch them; they will get the money back that they put forward. Information on numbers of returned products will be collected and passed to the business that made the first sale of the product on which a deposit was charged.”
“The changes made by clause 314 will address that, by removing the need to account for VAT on the deposit amount when it is charged. The new rules will require VAT to be accounted for only on unreturned deposits. To avoid complexity for both consumers and businesses, only the business that makes the first sale of the drink with a deposit will be required to account for VAT on unreturned deposits. What that means in practice is that producers and importers will be the ones liable to account for it on their VAT returns. We have tried to protect both consumers and small shops—corner shops, newsagents and the like—from having to deal with any VAT complexity from the measure. When drinks containers are returned, they will be scanned, and the consumers will receive a refund of the deposit.”
“Clause 314 makes changes to the Value Added Tax Act 1994. Those changes will enable further secondary legislation designed to ensure that businesses only account for VAT on the price actually paid for bottles or drinks containers covered by deposit return schemes. Such schemes are being introduced across the UK to encourage the recycling of containers, and under existing law VAT is due on the full price paid for a drink, including any deposit. Existing rules do not permit VAT adjustments for deposit scheme refunds. That means that under the current law VAT would be collected on drink deposits, even though they have been refunded. We do not want that to happen, because we want to support the environmental aspirations of such measures.”
“I hope that the scheme will be an enormous success and that the producers will pay the VAT on returned bottles, but it will take us a bit of time to get used to it.”
“On the last point, I gently redirect the hon. Member’s observation about a piecemeal approach. That is probably more for the Scottish Government to answer because we would very much like to be acting in tandem. By the way, I am responsible for only the VAT elements, so questions about the wider design of the scheme, including whether glass is included, must be directed to the Department for Environment, Food and Rural Affairs. I have been holding that wet towel over my head at night thinking about this. For example, what happens if somebody buys their bottle of drink just north of the border, pops over to visit Newcastle for the day and wants to get rid of that bottle? There are practical considerations. With some of this—and the Scottish Government are in this position as well—we will have to see how consumers behave.”
“Clause 314 accordingly ordered to stand part of the Bill. Clause 315 Dumping, subsidisation and safeguarding remedies Question proposed , That the clause stand part of the Bill.”