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Support for Businesses: Covid-19

Volume 685: debated on Tuesday 1 December 2020

What fiscal steps his Department is taking to support businesses affected by the covid-19 outbreak. (909598)

The Government recognise the extreme disruption that the pandemic has caused to business, employment and the nation’s economy, and our goal remains to protect people’s jobs and livelihoods. That is why we have provided one of the most comprehensive and generous packages of support, worth £280 billion.

I commend the Treasury on what it is doing at the moment to support businesses across the UK. Is the Treasury willing to extend the VAT cut to the hospitality, leisure and personal care sectors, and will it perhaps encourage businesses to pass on that VAT saving to consumers?

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of more than 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and it will run now until 31 March next year. This obviously comes at a considerable cost to the Exchequer, and while we keep all taxes under review, there are no plans to extend it further. Although the Government want businesses to pass on the benefit to customers if they can, obviously decisions on prices are ultimately for businesses rather than the Government.