Energy Charter Treaty
Those party to Energy Charter Treaty (ECT) are currently negotiating its modernisation to ensure it is aligned with common climate objectives. The Government supports the process to modernise the Treaty in a way that advances the global energy transition, such as the right for states to regulate to reach emissions reduction targets and ensuring a stronger focus on climate security.
I note that you would rather the UK withdraw from the Treaty entirely but I know that the Government considers it important to remain party to the ECT and support its modernisation. Ministers believe a renegotiated Treaty will remain valuable in supporting clean energy investment in the future.
The clean energy transition requires significant investment. The ECT plays an important role in protecting British and global investments of this kind and thus facilitating progress toward net zero. As such, I think the Government is right to remain committed to the Treaty, whilst working to bring about its modernisation in the interests of all.
It is worth noting that there has never been a successful investor-state dispute settlement (ISDS) claim against the UK. Nor has the threat of potential disputes ever affected the Government’s legislative programme.
Energy Profits Levy
Oil and gas companies are currently seeing extraordinary windfall profits due to global spikes in commodity prices, driven in part by surging demand after the pandemic and Russia’s war. As a result of high energy prices, millions of households across the UK are struggling to make their incomes stretch to cover the rising cost of living. That is why the Government has introduced a Levy which will be charged on profits of oil and gas companies at a rate of 25 per cent, on top of the existing 40 per cent headline rate of corporation tax, raising around £5 billion over the next year to support households. It will be temporary, and as the oil and gas price decreases to normal levels, the Levy will be automatically phased out.
The Government is sympathetic to the argument to tax these profits fairly, as well as incentivising investment which is critical to growing our economy. This is why significant investment incentives will be built into the new Levy. A new Investment Allowance will double the overall investment relief for oil and gas companies, so companies will have a significant incentive to reinvest their profits. For every £1 an oil or gas company invests, they will pay 91 per cent less tax – so the more a company invests, the less tax they will pay. This relief will be available straight away, rather than waiting for profits which is normal for existing investment reliefs.
As I understand it, the Government will also examine the scale of large profits made by the electricity generation sector and consider the appropriate steps to take.
There is no doubt that communities are key to decarbonising the UK economy, and I am glad that the Government is supportive of community energy.
Ofgem has existing flexibility to award supply licences that are restricted to specified geographies and/or specified types of premises. Furthermore, following a consultation process, since February this year, Ofgem is welcoming applications from community interest groups, co-operative societies and community benefit societies to the industry voluntary redress scheme. This is enabling groups to apply for funds to deliver energy related projects that support energy consumers in vulnerable situations, support decarbonisation and will benefit people in England, Scotland and Wales.
To support community energy projects, the Government has funded the Rural Community Energy Fund. This £10 million funding scheme was delivered through the Local Energy Hubs which support rural communities in England to develop renewable energy projects, which provide economic and social benefits to the community. Since its launch in 2019, the fund received 1,668 enquiries, 203 applications and awarded millions of pounds worth of grants to projects focusing on a variety of technologies, including solar, wind, low-carbon heating and electric vehicle charging.
The Government has also introduced other UK wide growth funding schemes, such as the Community Renewal Fund and the Towns Fund, through which it is enabling local areas to tackle net zero goals in ways that best suit their needs. In addition, I know the Government encourages community energy groups to work closely with their local authority to support the development of community energy projects within these schemes and plans to reintroduce the Community Energy Contact Group to strengthen engagement with the sector.
The Energy White Paper, published in December 2020, also committed government to review the overall retail market regulatory framework and, through this review, the Government will assess what changes may be needed to allow for new supply propositions to come forward. I understand the Government will engage with community stakeholders as part of the review and I will follow any developments closely.
Energy Price Cap
As the UK economy continues its recovery from the pandemic, we must confront the global inflationary pressures caused by the world economy coming swiftly back to life. Much of this inflation is being driven by the rising cost of energy due to increased demand worldwide, and that feeds through into pressures on the cost of living.
We must be honest that there are limited levers the Government has to deal with these global problems. The Government has already taken steps which include reducing the Universal Credit taper rate, increasing the National Living Wage, freezing fuel duty for the twelfth year in a row and launching a £500 million Household Support Fund to help the lowest-income households with their bills.
However, the Government recognises that it must go further to help families with pressures on the cost of living. We must also be honest that over time, households will need to adjust to higher energy costs, but the Government can help ensure the adjustment to higher prices is smaller initially and spread over a longer period.
Following Ofgem’s confirmation that the energy price cap will rise by £700 from April, the Government have announced a three-part plan to help with household fuel bills immediately and protect people against half of this increase, worth £350 per household, in a total package of support worth £8.6 billion. This package consists of a £200 ‘smoothing’ rebate on energy bills for all households, to be paid back over the next five years at £40 per year, starting from April 2023, a non-repayable £150 cash rebate for homes in Council Tax bands A-D, equivalent to 80% of all households, helping both lower and middle-income families and £144 million of discretionary funding for local authorities to support households not eligible for the council tax rebate.
The Government is also continuing with plans to increase the Warm Homes Discount and extend eligibility by one-third to 3 million vulnerable households which is worth £150.
I appreciate you are disappointed that Ofgem raised the cap in April which will affect around 22 million customers. I understand that the increase is driven by a record rise in global gas prices over the last 6 months, with wholesale prices quadrupling in the last year. I am encouraged that Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.
Although those protected by the Energy Price Cap are paying a fair price, these customers may also be able to reduce their energy bills further by shopping around for a better deal. Changing energy provider has never been easier and switching energy can be done online or over the phone. Comparison sites provide useful information on which providers can give customers the best deal and, as a result, changing energy provider is likely to save households money on their energy bills. Almost 500,000 energy customers switched to a new supplier each month in 2020, according to figures from the industry group Energy UK.
I understand anxiety over rising prices and inflation. I want to assure you that the Government will continue to listen and to ensure that the policies in place do help those who need it most. I have made my ministerial colleagues aware of my constituents' concerns and I strongly welcome the range of measures put in place, including the new three-part plan to help households with their energy bills during this challenging period.
A rise in the National Living Wage will mean an extra £1,000 in the pockets of millions of people. The Government has also cut the Universal Credit taper rate and increased work allowances, which represent an effective tax cut for low income working households in receipt of UC worth £2.2 billion in 2022-23. Furthermore, broad changes to the tax system are benefitting 31 million workers and mean that the first £12,500 a person earns will be completely tax-free and money has been made available to councils to distribute as hardship funds.
I will be working with my Parliamentary colleagues to ensure the Government continues to help ordinary households up and down the country as our economy continues to recover from the shock of Coronavirus.
Business, Human Rights and Environment Act
Please be reassured that HM Government is committed to promoting the protection and respect of human rights in business, both at home and abroad.
The UK was the first country to create a National Action Plan to implement the UN’s Guiding Principles on Business and Human Rights (UNGPs), widely regarded as the authoritative international framework to steer practical action by governments and businesses worldwide on this important and pressing agenda.
This plan sets out what is expected in regard to the conduct of UK businesses, including compliance with relevant laws and respect for human rights, treating the risk of causing human rights abuses as a legal compliance issue, adopting appropriate due diligence policies and consulting those who could potentially be affected. HMG expects all UK businesses to respect human rights throughout their operations, in line with the UNGPs, including in regard to their supply chains.
HMG is also taking a number of steps, through the Modern Slavery Act 2015, to ensure no British organisation, public or private, unwittingly or otherwise, is complicit, through their supply chains, in human rights violations. Section 54 of the Act established the UK as the first country in the world to require businesses (with a turnover of £36m or more) to report annually on steps taken to prevent modern slavery in their operations and supply chains.
I am assured that HMG will continue to develop its approach in line with the 2015 Act.
The Foreign, Commonwealth and Development Office and Department of International Trade also produce guidance to assist businesses in exercising such due diligence in countries where particular concerns around human rights exist.
As President and host of COP26, the UK has taken a leading role in efforts to protect our environment. At COP26, the UK led the way on securing agreement from 141 world leaders to work together to halt and reverse forest loss by 2030 under the Glasgow Leader's Declaration on Forests and Land Use. Signatory countries account for over 90% of the world’s forests, including first-time commitments from Brazil and China. At home, HMG has introduced world-leading due diligence legislation through the Environment Act to tackle illegal deforestation in UK supply chains.
Alcohol Duty and Support for Pubs
The Autumn Budget 2021 confirmed that duty rates on beer, cider, wine and spirits will be frozen for another year, a move which will save consumers £3 billion over the next five years, and provide further support to the hospitality industry and its suppliers as they recover from the pandemic. Duty rates on draught beer and cider will be cut by 5%, taking 3p off a pint and further supporting pubs.
I was glad to see the announcement in the Autumn Budget 2021 that, following a review, the alcohol duty regime is to undergo a major simplification. The old system was outdated system that set rates based on historical anomalies, and a new regime will be fairer to both consumers and producers, and promote product innovation in response to evolving consumer tastes.
This radical simplification of the duty system will reduce the number of main rates from 15 to 6, and tax products in proportion to their alcohol content.
All tax categories, such as beer and wine, will be moved to a standardised set of bands, with rates for products between 1.2-3.4% alcohol by volume (ABV), 3.5-8.4% ABV, 8.5-22% ABV, and above 22% ABV. Above 8.5% ABV, all products across all categories will pay the same rate of duty if they have the same proportion of alcohol content. Registration and payment will also be simplified, and the practice where individual products have different administrative rules will end.
The new progressive manner in which alcohol is taxed will ensure higher strength products incur proportionately more duty, and these rates will be the same across all product categories. This change will address the problem of harmful high-strength products being sold too cheaply, and the new rates for low strength drinks below 3.5% ABV will encourage manufacturers to develop new products at lower ABVs, giving consumers greater choice and greater options to drink responsibly.
I welcome the introduction of a new small producer relief which will build on the previous success of the Small Brewers Relief, which will benefit cidermakers and other producers of lower ABV drinks. This will allow small producers to diversify their product range to other products below 8.5% ABV while still benefitting from reduced rates.
I am acutely aware that pubs have faced considerable challenges during the coronavirus pandemic, and that the economic effects of fighting the virus will last longer for businesses than the duration of any restrictions. I am therefore encouraged that they have been provided with significant financial support and relief.
In response to the rise of the Omicron variant, the Government is providing businesses in the hospitality and leisure sectors with one-off grants of up to £6,000 per premises. Businesses most in need will be eligible for further support through the Additional Restrictions Grant, which local authorities have discretion to allocate within their areas. The Statutory Sick Pay Rebate Scheme has also been reintroduced to help support businesses through what is often their most profitable time of year.
Throughout the pandemic, pubs have benefitted from a range of grants such as the one-off Restart Grants which were made available to help businesses reopen safely, worth up to £18,000 for hospitality, leisure, accommodation, personal care and gym businesses. The reduced VAT rate of 12.5% and option to defer some VAT payments until March 2022 are continuing to support businesses, as is the UK-wide Recovery Loan Scheme which has been extended until June 2022.
Announcements made in the 2021 Spending Review will directly help to support pubs as they adapt and recover from the pandemic, with a five per cent cut to duty rates on beer and cider. I am told that this is the biggest cut to these duties in 50 years and almost 100 years, respectively. The hospitality industry will also benefit from frozen alcohol duty rates which will continue from 2021-22 into 2022-23.
Expanding on the business rates holiday introduced in response the pandemic and the 66 per cent relief which remains in place for 2021-22, a new relief will be introduced for eligible retail, hospitality and leisure properties. This will see over 90 per cent of retail, hospitality and leisure businesses receive at least 50% off their business rates bills in 2022-23.
Looking to the future, I welcome the fact that the Government’s long-term strategy for the hospitality sector includes an extension to pavement licences, making it easier and cheaper for pubs, restaurants and cafes to continue to make outdoor dining a reality with seating, tables and street stalls to serve food and drinks. There is also an intention to make these licences permanent. On top of this, pubs will be given more flexibility through a 12-month extension of temporary permissions for the off-sale of alcohol.
Evidence continues to be collected on the impact of the pandemic on the hospitality sector and I am confident that the Government’s ongoing support will help pubs, which are the lifeblood of our communities, to recover and build back better.
Coronavirus: Night Time Economy
I appreciate that it has been a particularly challenging time for many sectors of our economy, including those operating within the night time economy, as a result of the Covid-19 outbreak. I sympathise with anyone who is currently facing redundancy during this difficult time. Throughout the pandemic I know that the Government has been working with local leaders to target outbreaks, and to put in place comprehensive support during national restrictions.
Recent developments have put pressure on businesses across the country. That is why I welcome that businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000. Further, more than £100 million discretionary funding for local authorities to support other businesses. The Government will also cover the cost of Statutory Sick Pay for absences due to Covid for small and medium-sized employers across the UK.
It is important that as economy begins to recover, and it is safe for businesses reopen and staff to return to work, that there is a welcoming and safe night time economy. The night time economy is hugely important to entertainment and culture in the UK, and it is the British economy's fifth largest sector.
The Coronavirus Job Retention Scheme was a temporary, economy-wide measure designed to support businesses while widespread restrictions were in place. I welcomed the several extensions to the CJRS, including the final extension to the end of September, which achieved the right balance between supporting the economy as it opened up, and continuing to provide support and protect incomes. This ensured that incentives were in place to get people back to work as demand returned.
Businesses can continue to benefit from financial support through the Recovery Loan Scheme which enables eligible businesses to apply for loans between £25,000 and £10 million with an 80% Government guarantee. Once received, the finance can be used for any legitimate business purpose, including growth and investment. I was encouraged that the Chancellor extended this scheme in the Autumn Budget and Spending Review 2021 until 30 June 2022.
From 1 January 2022, the scheme will only be open to small and medium sized enterprises, with the maximum amount of finance available set at £2 million per business and the guarantee coverage that the Government will provide to lenders will be reduced to 70%.
Further support has included one-off top up grants for retail, hospitality and leisure businesses forced to close worth up to £9,000 per property, Local Restriction Support Grants for closed businesses worth up to £3,000 a month per property, a £594 million discretionary fund to support other impacted businesses, a £1.1 billion further discretionary grant funding for Local Authorities, and one-off Restart Grants of up to £6,000 in the non-essential retail sector and up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses.
All retail, hospitality and leisure businesses also paid no business rates for the 2020-21 financial year, regardless of their rateable value. This relief applied to over 350,000 properties and is worth almost £10 billion.
I will continue to raise industry-specific concerns at the highest level to make sure that the Government is aware, and I will follow any developments closely.
Hospitality and VAT
The temporary reduction in VAT to 5% instead of 20% for hospitality and tourism businesses, which was previously been extended until 31 March 2021 and subsequently place until 30 September 2021 is changing to 12.5% and will remain so until 31 March 2022. The scope of the relief will remain unchanged over this period.
I welcomed the Chancellor’s announcement that businesses will be able to spread their deferred VAT repayments over 11 smaller, interest-free repayments. This will benefit almost half a million businesses who have deferred £30 billion worth of VAT this year.
I recognise that in the past some EU member states had implemented a lower rate of VAT on tourism and hospitality to the UK. However, comparisons with these countries tended not to take into account the significant VAT reliefs the UK provided for cultural attractions and public transport, or other tourist taxes that some member states choose to levy. Additionally, the UK’s VAT registration threshold is high when compared to EU member states, so many tourist attractions did not have to charge any VAT to their customers.
Before the pandemic I was very keen to see a permanent reduction in VAT for hospitality, I still see this as a long term goal and will continue to lobby behind the scenes for support for hospitality and tourism.
Energy Efficiency in Homes
Buildings are responsible for around 30% of our national emissions, and I know the Government recognises that upgrading home energy performance is crucial if we are to meet net zero greenhouse gas emissions across the UK economy by 2050.
I welcome the publication of the Heat and Buildings Strategy, which signals a step change in improving the energy efficiency of our buildings and how we heat them, while also supporting 240,000 green skilled jobs by 2035 and delivering £6 billion additional GVA by 2030.
The strategy announced the Government's ambition that by 2035, no new gas boilers will be sold. All new heating systems installed in UK homes will either use low-carbon technologies, such as electric heat pumps, or will support new technologies like hydrogen-ready boilers, in line with the natural replacement cycle, and once costs of low carbon alternatives have come down.
Furthermore, the Government will invest over £4 billion of new funding for decarbonising heat and buildings from 2022 to 2025. This includes a new £450 million three-year Boiler Upgrade Scheme which will see households offered grants of up to £5,000 for low-carbon heating systems, such as a heat pump, so they cost the same as a gas boiler now. I am encouraged that £1.75 billion will be provided for the Social Housing Decarbonisation Scheme and Home Upgrade Grants, with £1.425 billion for Public Sector Decarbonisation which has the aim of reducing emissions from public sector buildings by 75% by 2037.
In addition, as included in the Clean Growth Strategy, the Government set out its aspiration for as many homes as possible to be Energy Performance Certificate Band C by 2035 where cost effective, affordable and practical, and to reach this standard by 2030 for fuel poor homes. To achieve this, it will need to mobilise up to £65 billion for upgrades, which will put us on a path to net zero, significantly reduce household energy bills, and improve our health and wellbeing. It will also create new opportunities for the energy efficiency sector, currently the largest part of the low carbon and renewable energy economy.
Work is underway to build a vibrant and sustainable market through introducing a suite of policies and measures that will drive uptake of energy efficiency:
- Through the Energy Company Obligation, over 2 million homes have had energy efficiency improvements since 2013. The Government is committed to extending this support to 2028, driving more than £6 billion of investment in domestic energy efficiency.
- Energy suppliers are required to provide low income and vulnerable households with energy efficiency and heating upgrades under the ECO.
- Investing a further £6.3 billion over the next 10 years to upgrade the worst homes and improve the energy performance of social housing.
- A commitment to publish consultations on a long-term trajectory to improve the energy performance standards of privately rented homes, and on setting requirements for lenders to improve the energy performance of homes they lend to.
New homes are now expected to emit 31% less CO2 and, in addition, a Future Homes Standard will be introduced in 2025. This will see new build homes future-proofed with low carbon heating and world leading standards of energy efficiency to produce 75% less CO2 emissions.
Households struggling with their bills are eligible for insulation measures, including solid wall insulation, through the Energy Company Obligation (ECO) scheme. Homeowners and those in privately rented homes who are on specific benefits may also be eligible for support towards heating improvements, including oil-fired boiler replacements, through ECO Affordable Warmth.
Holiday lets contribute to the economy, create jobs and increase tourism, which is especially vital here in North Devon where tourism contributes widely to our economy. Nonetheless, there are concerns that owners of some properties that are not genuine businesses reduce their tax liability unfairly by declaring that a property is available to let, while making no sincere effort to let it out.
The Government has announced that it will legislate to strengthen the self-catering accommodation criteria for business rates to rectify this issue. This follows a consultation on a proposal to make holiday lets only liable for business rates rather than council tax if the property is available as a commercial holiday let for short periods totalling at least 140 days.
This would also apply if during the year prior to the year being considered, the property was available for letting commercially as self-catering accommodation for short periods totalling at least 140 days. If during the year immediately prior to the year being considered, the property was actually commercially let as self-catering accommodation for short periods totalling at least 70 days it would also benefit from the proposed changes.
I have also written to the Government about making further changes to both tax rules and the planning system, to ensure that holiday lets pay their fair share of taxes, but also that the strain upon the local housing situation is taken into consideration and that a potential licencing system be introduced for all holiday lets.
Save Our Pubs (CAMRA)
I am acutely aware that pubs have faced considerable challenges during the coronavirus pandemic, and I am therefore encouraged that they have been provided with significant financial support and relief.
To help businesses reopen safely, one-off Restart Grants were made available worth up to £18,000 for hospitality, leisure, accommodation, personal care and gym businesses. Building on this, 66% business rates relief and a reduced 12.5% VAT rate are in place until the end of March 2022, with alcohol duty also frozen for 2021-22.
These measures come on top of the previous grants, reliefs and loans made available since the start of the pandemic. For example, as we entered a national lockdown in January, the Chancellor unveiled further economic support for retail, hospitality and leisure businesses, including pubs, in light of the restrictions. New one-off top-up grants were announced, worth up to £9,000 per property, to help businesses through to the spring.
I am pleased that the Government has announced that pavement licences will be extended, making it easier and cheaper for pubs, restaurants and cafes to continue to make outdoor dining a reality with seating, tables and street stalls to serve food and drinks. There is also an intention to make them permanent. On top of this, pubs will be given more flexibility through a 12 month extension of temporary permissions for the off-sale of alcohol.
I understand that pubs were subject to debilitating restrictions for a long time, and I hear requests for a longer-term sector-specific package of support. That is why I am assured that the Government has provided unprecedented levels of support throughout the pandemic and published long-term strategies to help the hospitality sector and our high streets to recover with more resilience.
Evidence continues to be collected on the impact of the pandemic on the hospitality sector and I am glad that the Government’s support is helping pubs, which are the lifeblood of our communities, to recover and build back better.
Cambo Oil Field
I understand that the original licensing consent for the Cambo oil field dates back to 2001 and the project is going through normal regulatory processes. The decision on whether to grant consent to Cambo oil field will be taken by the Oil and Gas Authority, who are ultimately responsible, rather than the Secretary of State.
While I am pleased that the Government is working hard to drive down demand for fossil fuels, I believe it is important to appreciate that there will continue to be ongoing demand for oil and gas over the coming years, as recognised by the independent Climate Change Committee as we are currently in a period of transition, and we cannot simply turn off one energy supply until an alternative is fully ready to replace it I remain fully committed to the race to net zero, but I also recognise that we need to remain commercially and economically viable as we move as quickly as we can towards the net zero goal.
Electronic Communications Code
I sympathise with the situation that some landowners are in regarding mast rent and the Electronic Communications Code (ECC). I would however stress that I am not able to offer legal advice and would suggest that anyone who is in a situation where they require legal assistance should contact a solicitor so that an appropriate resolution to the situation can be reached.
As Chair of the All Party Parliamentary Group on Broadband and Digital Communication, I am leading an inquiry on how the ECC could be practically reformed to make it easier to deploy full fibre broadband in both urban and rural areas, while respecting residents’ and landowners’ rights.
While the ECC provides the statutory framework underpinning the rights to install and maintain electronic communications apparatus on public and private land, I understand that it has long been considered a barrier to deploying fixed and mobile networks, and is preventing North Devon residents from getting the fast internet speeds that they deserve.
The ECC was recently reformed as part of the Digital Economy Act 2017. These reforms were intended to reduce the costs of providing communications infrastructure and make it easier for operators to deploy such infrastructure, ultimately saving consumers their money.
Furthermore, I am encouraged that the Department for Digital, Culture, Media and Sport recently ran a consultation on further legislative changes to the Electronic Communications Code. If the Government decide that changes to the Code are needed, these will be focused on supporting the UK's digital networks and ensuring the aims of the 2017 reforms are realised. However, I will await the outcome of the inquiry I am leading as Chair of the APPG before I make any judgements.
If we are to hit the Government’s target of 85% gigabit capable coverage by 2025, then it is vital that further reforms to the ECC are considered, and that views such as those you have expressed to me are considered.
‘Save Our Books’ Campaign
I take the protection of Intellectual Property (IP) seriously and I am pleased that a range of initiatives have been designed to reduce IP theft.
I understand that the principle of exhaustion sets a limit on the ability of IP rights holders to control the distribution of goods protected by those rights. When the UK was in the EU single market, the UK has considered first sale within the European Economic Area to be the point at which the control of a rights holder expires. This approach allowed the trade of goods on the secondary market to flourish between EEA countries, while retaining the ability of rights holders to prevent imports into the EEA of goods that they have sold elsewhere in the world. Now we have left the EU, and therefore no longer bound by its framework nor a member of the single market, the Intellectual Property Office (ICO) is re-examining how the principle of exhaustion should work for the UK as a standalone sovereign nation.
The IPO has launched a consultation and is seeking views on a range of options from all interested parties, including businesses and consumers. The consultation will help government assess the feasibility and potential impact of the different exhaustion of IP rights regimes. This will include consideration of impacts on the publishing industry and cross-border trade of goods in the secondary market, including goods from the creative industries.
I share concerns about the future of pubs and the hardship caused by the coronavirus pandemic. It is clear the economic effects of fighting the virus last longer for businesses than the duration of any given restrictions, and we need to go further with our support. I understand the role of pubs to their local community, especially here in North Devon where we have so many rural pubs. The Prime Minister expressed regret in announcing the current national lockdown, but I agree with him that robust action is needed to bring the virus back under control.
While I appreciate that closures are unwelcome news for publicans, it is reassuring that the Chancellor has unveiled further economic support for retail, hospitality and leisure businesses, including pubs. One-off top-up grants have been announced for the third lockdown, worth up to £9,000 per property, to help businesses through to the spring. For those businesses not eligible for the grants, a £594 million discretionary fund is being made available by the Government as a matter of urgency. The one-off grants come in addition to billions of pounds of existing business support, including grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.
I am pleased that a robust package of support has been introduced since the start of the pandemic. No pub or other business in the hospitality sector will be required to pay business rates in 2020-21, and HMRC has made it easier to claim back the duty on any beer thrown away as a result of pub closures. I also welcome that the temporary reduction of VAT to 5% has been extended by a further 3 months to the end of March 2021. Additionally, the Chancellor will defer VAT repayments through a new scheme until March 2022.
We await the budget on 3rd March to see what additional support will be made available to the hospitality sector as we move through the unlock roadmap.
Amazon holds close to one third of the market share of e-commerce in this country and operating online does not mean a company’s responsibilities to society are lessened.
The Health and Safety Executive (HSE) is the independent regulator for work-related health, safety and wellbeing. HSE has published guidance on warehouse safety which employers such as Amazon must follow. With the additional safety risks posed by Covid-19, I am pleased that the HSE is conducting spot checks and inspections on businesses to ensure they are adhering to Covid-secure guidance and keeping employees safe. If an employee feels their workplace is not safe due to health and safety issues or Covid-19 measures, they can report it to their local authority for the HSE to investigate.
Regarding taxation, it would not be appropriate for me to comment on individual taxpayers. However, it is right that companies pay the tax that they owe to the Exchequer so that the Government can fund the public services that we all rely on. The Digital Services Tax for online companies was introduced to ensure that search engines, social media platforms and online marketplaces pay UK tax that reflects the value they derive from UK users.
In response to concerns over privacy, the Government expects Amazon, like all organisations who process personal data, to comply with the UK’s Data Protection legislation, including the Data Protection Act 2018 and the Privacy and Electronic Communications Regulations 2003.
Finally, I am hopeful that the steps that Amazon has taken so far in the effort to decarbonise, and I encourage the company to continue with its Science-Based Target commitments in order to move quickly towards Net Zero.
Hospitality Supply Chain Support
I do understand that many businesses feel that they have not had the same level of support as others, it is not just those in the hospitality supply chain. While the Government had tried to be as fair as possible where it can with its financial support, there are some areas where more could be done. Please be assured this matter has been raised with ministers and will continue to be so.
With hospitality, while the support has been relatively generous there is still a strong feeling among businesses that it may not be enough. In supporting hospitality directly, it is hoped that they will still be able to pay their bills to their suppliers in the support chain and be ready to buy again as soon as possible. In essence, the Government is supporting the supply chains customers, so they can in turn support the entire system. Likewise, where we have seen schemes like ‘Eat out to Help out’, this may well have been seen as a scheme to support bars and restaurants but the knock on effect within the entire supply chain will have been noticeable.
I personally hope to see other such innovative schemes for the spring as well as some extended support when it comes to business rates or indeed VAT.
Minister for Hospitality
The outbreak of Covid-19 had a significant impact on the economy and I recognise that the hospitality sector has been particularly affected. Limitations on opening hours, household mixing and social distancing requirements have been difficult for many businesses and I understand that restricting the spread of the virus in a sector which exists to bring people together is challenging.
I have quite rightly spent a considerable amount of time lobbying on behalf of the hospitality and tourism businesses of North Devon.
My ministerial colleagues have worked hard to support restaurants, bars and hotels throughout the outbreak. The includes the introduction of the Coronavirus Job Retention Scheme, the Coronavirus Business Interruption Loan scheme, the £3 billion reduction in VAT for hospitality businesses, the 100 per cent business rates relief for hospitality, retail and leisure businesses, the Retail, Hospitality and Leisure Business Grants Fund, the Small Business Grants Fund, the Bounce Back Loan scheme, the Job Support Scheme, the Local Restrictions Support Grant and the Eat Out to Help Out Scheme.
Government support for the hospitality sector involves several departments such as Business, Energy and Industrial Strategy, HM Treasury, the Ministry for Housing, Communities and Local Government, as well as the Department for Digital, Culture, Media and Sport. The legal maximum number of paid ministers is 109 and this is set out in statute. A new position would require the elimination of another position and it is not clear which the petition proposes to remove.
We do have a Minister for Sport, Tourism and Heritage in Nigel Huddleston MP, somebody who I have a great deal of confidence in and have worked with closely over the last nine months as well as Paul Scully MP, who is the Minister for Small Business with responsibility for pubs, who I again meet with regularly to discuss the plight of North Devon pubs.
The concerns of the hospitality sector are well recognised by both ministers but many of the decisions at present are linked to the Department for Health and Social Care whilst we fight a deadly virus and the huge response to support businesses through the pandemic, I have no doubt, and indeed will continue to fight for extra support for the hospitality sector once the vaccination programme is advanced. Many of the asks from the hospitality sector at this time relate to the future, and with so much uncertainty with the course of this pandemic, ministers in all departments are not able to give the long term information that businesses, understandably crave.
I do understand the motivations behind the petition in highlighting the importance of the sector, and indeed hope to speak in the debate, but I believe that the current approach has provided and continues to offer substantial support for the sector during these difficult times.
Electrical safety and online marketplaces
I am familiar with Electrical Safety First's campaign for better regulation of online marketplaces. As you will know, the UK has a strong product safety system to ensure products are safe before they can enter the market, and this includes products sold online.
I understand your concerns regarding this issue, and I take the problem of counterfeit electrical goods seriously. It is therefore welcome that the Government is working across the industry and with law enforcement colleagues on a number of initiatives to tackle this issue. You may also welcome the fact that officials in government are working with representatives from online platforms to discuss the availability of counterfeits on their platforms. Action is also underway to ensure a co-ordinated law enforcement response against the sellers of these counterfeits.
In addition, the Office for Product Safety and Standards (OPSS) is reviewing product safety legislation to make sure the existing legislative framework is adequate. This is due to changes to traditional supply and distribution chains as a result of e-commerce.
I will continue to follow the developments in this area and in particular the OPSS review into the current product safety legislative framework. This is an important issue and the Coronavirus pandemic highlights how more and more consumers are relying on e-commerce.
Night Time Economy
I know that it has been a particularly challenging time for those operating within the night time industry. I sympathise with anyone who is currently facing redundancy during this difficult time.
It is important that as our economy begins to recover, with more businesses reopening and staff returning to work, that there is a welcoming and safe night time economy. The night time economy is hugely important to our entertainment and culture in the UK, and it is the UK's fifth largest sector. To help the smallest businesses operating in the night time economy, the Government has put in place grants which have been distributed through North Devon Council. Further, all businesses operating in the retail, hospitality and leisure sector can benefit for a business rates holiday for 2020-21 as the Chancellor removed the previous threshold on eligibility for this support.
To support jobs, both the Coronavirus Job Retention Scheme (CJRS) and the Coronavirus Self-employed Income Support Scheme (SEISS) provided a taxable grants worth 80 per cent of an employees’ wages, or a self-employed person’s average monthly profits over the last three years, up to £2,500 a month. I welcome the extension of SEISS which means that self-employed individuals can qualify for a second and final taxable grant, when the scheme reopens for applications this month. This second grant will be worth 70 per cent of average monthly trading profits, capped at £6,570 in total, and according to the same eligibility criteria as the first grant. This extension matches the support available under the CJRS as the Chancellor announced that the CJRS will continue until the end of October, with new flexibility having been introduced from August to also help get employees back to work. This includes furloughed workers being able to return to work on a part-time basis, with employers being asked to pay a percentage towards the salaries of furloughed staff.
Temporary new measures have been introduced to protect tenants renting commercial property from aggressive forms of rent recovery. To achieve this, the Government has legislated to enact a moratorium on commercial forfeitures due to non-payment of rent, due to end on 30 June; temporarily voided statutory demands and winding up petitions issued to commercial tenants; and changes have been made to the use of Commercial Rent Arrears Recovery.
As you may know, bars may reopen provided their premises are Covid-19 Secure. The full details of the guidance can be found online at: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/restaurants-offering-takeaway-or-delivery. Unfortunately, nightclubs, casinos, bowling alleys, indoor skating rinks, and some other venues must remain closed until it can be proven that their premises can be made Covid-19 Secure. I know that the evidence is being kept under review and Ministers are working with industry representatives to draw up further guidance. The full list of businesses which can reopen is available online at: https://www.gov.uk/guidance/opening-certain-businesses-and-venues-in-england-from-4-july-2020.
I will continue to raise your industry-specific concerns at the highest level to make sure that the Government is aware and I will follow any developments closely.
Support for the Aerospace Industry
Aerospace is an important strategic sector of the UK economy and I am concerned about the impact of Covid-19 on the industry. The Government have put support in place, which is on top of the longer-term assistance delivered through the Aerospace Growth Partnership.
The Government is providing targeted assistance to firms, in addition to the £2.16 billion of loans that have been paid to airlines and aerospace companies through the Bank of England’s Covid Corporate Finance Facility to support businesses affected by loss of funding. Current sector-specific assistance includes the provision of £450 million research and development funding through the Aerospace Technology Institute, as well as the establishment of the Jet Zero Council to oversee the UK’s mission to produce the first zero carbon transatlantic passenger jet. In total, over £6 billion of support has gone to the aviation and aerospace sector, which I hope will protect the industry and jobs. I will continue to monitor the situation closely.
However, I know that there is still a high level of concern about the future of the aerospace sector. I will continue to raise those concerns with Ministers to ensure that the Government is doing everything it can.
I have received a number of emails from constituents concerned about reports that there may be a temporary relaxation of Sunday trading legislation. I strongly believe that it is important for Sunday to remain special, and I do not want to see workers lose the extra time they get to spend with their families. I am therefore instinctively nervous about the media reports. However, as with all media reports of this kind, we must be careful to remember that there actually may not be any plans to relax Sunday trading legislation.
If such proposals were put before the House of Commons, I would want to be absolutely certain that such a change was temporary, and that it would provide a meaningful economic benefit which would support our post-pandemic economic recovery. I would need to both of those conditions to be fulfilled before considering supporting such proposals.