Written questions by Murphy.

What assessment she has made of the potential impact of the exclusion of Further Education Colleges from section 33 of the VAT Act 1994 on social mobility for students at those colleges.

Further Education (FE) funding is vital to ensure people are being trained in the skills they need to thrive in the modern labour market. The 2025 Spending Review provided an additional £1.2 billion per year by 2028-29 for skills and £1.7 billion of capital funding to help colleges maintain the condition of their estate. In addition, the Government is providing £375 million of capital investment to support the FE system to accommodate increasing student numbers.        For their non-business activity, FE colleges are unable to reclaim VAT incurred. We operate several VAT refund schemes for schools and academies which are designed variously to ensure that VAT is not a burden on local taxation, and that academies are not disincentivised from leaving local authority control. FE colleges do not meet the criteria for either scheme.         In relation to business activity, FE colleges enjoy an exemption from VAT which means that they do not have to charge VAT to students, but cannot recover it either.

What assessment she has made of the potential impact of the inability of Further Education colleges to reclaim VAT on their financial sustainability.

Further Education (FE) funding is vital to ensure people are being trained in the skills they need to thrive in the modern labour market. The 2025 Spending Review provided an additional £1.2 billion per year by 2028-29 for skills and £1.7 billion of capital funding to help colleges maintain the condition of their estate. In addition, the Government is providing £375 million of capital investment to support the FE system to accommodate increasing student numbers.        For their non-business activity, FE colleges are unable to reclaim VAT incurred. We operate several VAT refund schemes for schools and academies which are designed variously to ensure that VAT is not a burden on local taxation, and that academies are not disincentivised from leaving local authority control. FE colleges do not meet the criteria for either scheme.         In relation to business activity, FE colleges enjoy an exemption from VAT which means that they do not have to charge VAT to students, but cannot recover it either.

Whether she has considered extending Section 33 of the VAT Act 1994 to Further Education colleges.

Further Education (FE) funding is vital to ensure people are being trained in the skills they need to thrive in the modern labour market. The 2025 Spending Review provided an additional £1.2 billion per year by 2028-29 for skills and £1.7 billion of capital funding to help colleges maintain the condition of their estate. In addition, the Government is providing £375 million of capital investment to support the FE system to accommodate increasing student numbers.        For their non-business activity, FE colleges are unable to reclaim VAT incurred. We operate several VAT refund schemes for schools and academies which are designed variously to ensure that VAT is not a burden on local taxation, and that academies are not disincentivised from leaving local authority control. FE colleges do not meet the criteria for either scheme.         In relation to business activity, FE colleges enjoy an exemption from VAT which means that they do not have to charge VAT to students, but cannot recover it either.

What assessment she has made of the potential impact of the exclusion of Further Education Colleges from section 33 of the VAT Act 1994 on economic growth.

Further Education (FE) funding is vital to ensure people are being trained in the skills they need to thrive in the modern labour market. The 2025 Spending Review provided an additional £1.2 billion per year by 2028-29 for skills and £1.7 billion of capital funding to help colleges maintain the condition of their estate. In addition, the Government is providing £375 million of capital investment to support the FE system to accommodate increasing student numbers.        For their non-business activity, FE colleges are unable to reclaim VAT incurred. We operate several VAT refund schemes for schools and academies which are designed variously to ensure that VAT is not a burden on local taxation, and that academies are not disincentivised from leaving local authority control. FE colleges do not meet the criteria for either scheme.         In relation to business activity, FE colleges enjoy an exemption from VAT which means that they do not have to charge VAT to students, but cannot recover it either.

Whether she plans to take steps to stop joint ventures using corporation tax reliefs through the purchase or transfer of trading losses.

Group relief allows the transfer of allowable losses from one company to another in the same group. Consortium relief is a type of group relief which allows companies that jointly own another company (a consortium company) to obtain relief for their share of that company’s tax losses, so that they are taxed on a measure of profits that reflects losses they may make from their participation in a joint venture. For these reliefs to apply, groups and consortia must meet certain eligibility criteria. For example, both types of relief are available to companies that have specific shareholding ownership relationships and are subject to UK Corporation tax. Joint ventures must meet the eligibility criteria to claim relief which is limited by reference to the proportion of member’s economic interest in the consortium company. Existing legislation already contains targeted anti‑avoidance provisions designed to prevent the exploitation of losses, and the Government keeps these rules under review.

What steps she is taking to ensure mortgage availability for people wishing to purchase residential properties that were converted from office space.

The availability and pricing of mortgages is a commercial decision for firms in which the Government does not intervene. However, the UK benefits from a competitive mortgage market; prospective buyers are encouraged to shop around and speak to a mortgage broker to find the best possible product for their circumstances. We are also helping buyers who may struggle to save for a large deposit by delivering on our manifesto commitment to a permanent mortgage guarantee scheme. The scheme is permanently available and will help to ensure mortgages are available for first-time buyers and home movers with small deposits across the UK, supporting our mission to boost economic growth across the country and make sure people are better off. More broadly, in response to the Prime Minister’s and Chancellor’s request for reforms to support growth, the Financial Conduct Authority have launched a major programme of work to refresh its mortgage lending rules, including to support first-time buyers’ access to mortgages. We welcome the actions that the Financial Conduct Authority have already taken as part of this work, including reminding firms of the flexibility available within the stress testing rules which allows lender to offer larger loans to customers, and its Discussion Paper, which is an important step towards putting home ownership within reach of many more. The Government also welcomes the recent decision of the Financial Policy Committee of the Bank of England to reform the flow limit, enabling lenders to offer more mortgages at over 4.5 times buyers’ income - helping up to 36,000 more first-time buyers own their own home in the first year.

What steps she is taking to recognise the economic contributions of small and mid-sized quoted companies.

We have already delivered an ambitious set of reforms to boost the competitiveness of UK markets, including for small and mid-sized quoted companies. This includes overhauling the Listing Rules, reforming the Prospectus regime to provide more flexibility to firms and founders raising capital and reducing reporting requirements for the smallest companies. The government also maintains generous tax reliefs for small and mid-sized quoted companies including the Growth Market Exemption which provides relief from Stamp Taxes on Shares for companies on Recognised Growth Markets. To create a stable regulatory environment, and complementing these reforms, the government is also establishing a 10-year strategy for financial services, which will be published at Mansion House on 15 July 2025.

What steps her Department is taking to increase public and investor confidence in small and mid-sized quoted companies listed in the UK.

We have already delivered an ambitious set of reforms to boost the competitiveness of UK markets, including for small and mid-sized quoted companies. This includes overhauling the Listing Rules, reforming the Prospectus regime to provide more flexibility to firms and founders raising capital and reducing reporting requirements for the smallest companies. The government also maintains generous tax reliefs for small and mid-sized quoted companies including the Growth Market Exemption which provides relief from Stamp Taxes on Shares for companies on Recognised Growth Markets. To create a stable regulatory environment, and complementing these reforms, the government is also establishing a 10-year strategy for financial services, which will be published at Mansion House on 15 July 2025.

What steps her Department is taking to help prevent companies de-listing in London.

We have already delivered an ambitious set of reforms to boost the competitiveness of UK markets including overhauling the Listing Rules, providing more flexibility to firms and founders raising capital. To create a stable regulatory environment, and complementing these reforms, the government is also establishing a 10-year strategy for financial services, with capital markets as a core pillar, which will be published at Mansion House on 15 July 2025.

What steps she is taking to increase liquidity for small and mid-sized companies.

This Government believes that small businesses are vital to the UK’s high streets and communities, and essential to the success of the government’s growth mission. To support small businesses, the Government announced generous tax reforms at Autumn Budget 2024 including, most notably, more than doubling the employment allowance to £10,500; commitments in the Corporate Tax Roadmap to maintain the Small Profits Rate and marginal relief at their current rates and thresholds; and freezing the small businesses multiplier for 2025/26. At the Spending Review, we have increased the financial capacity of the British Business Bank to £25.6bn, which will enable a two-thirds increase in support for SMEs across the UK. This investment is expected to crowd in tens of billions of pounds of private capital and will support innovative businesses to start, scale and stay in the UK. We are also continuing to take measures to tackle late payments, which severely impact the cash flow of small businesses. This year we will be laying requirements for large companies to include information about their payment performance in their Annual Reports and launched the Fair Payment Code. We will also soon be launching a consultation on additional legislative measures to address late payments and long payment terms.

What steps she is taking to implement regulation that increases risk appetite among investors.

We have already delivered an ambitious set of reforms to boost the competitiveness of UK markets, including for small and mid-sized quoted companies. This includes overhauling the Listing Rules, reforming the Prospectus regime to provide more flexibility to firms and founders raising capital and reducing reporting requirements for the smallest companies. The government also maintains generous tax reliefs for small and mid-sized quoted companies including the Growth Market Exemption which provides relief from Stamp Taxes on Shares for companies on Recognised Growth Markets. To create a stable regulatory environment, and complementing these reforms, the government is also establishing a 10-year strategy for financial services, which will be published at Mansion House on 15 July 2025.

What steps she is taking to incentivise investment in small and mid-sized companies.

This Government believes that small businesses are vital to the UK’s high streets and communities, and essential to the success of the government’s growth mission. To support small businesses, the Government announced generous tax reforms at Autumn Budget 2024 including, most notably, more than doubling the employment allowance to £10,500; commitments in the Corporate Tax Roadmap to maintain the Small Profits Rate and marginal relief at their current rates and thresholds; and freezing the small businesses multiplier for 2025/26. At the Spending Review, we have increased the financial capacity of the British Business Bank to £25.6bn, which will enable a two-thirds increase in support for SMEs across the UK. This investment is expected to crowd in tens of billions of pounds of private capital and will support innovative businesses to start, scale and stay in the UK. We are also continuing to take measures to tackle late payments, which severely impact the cash flow of small businesses. This year we will be laying requirements for large companies to include information about their payment performance in their Annual Reports and launched the Fair Payment Code. We will also soon be launching a consultation on additional legislative measures to address late payments and long payment terms.

With reference to the consultation entitled Boiler Upgrade Scheme and certification requirements for clean heat schemes, published on 30 April 2025, whether her Department plans to update the list of Energy Saving Materials to include heat batteries for space heating.

This Government is committed to improving the quality and sustainability of our housing stock. This will be vital to making the UK more energy resilient and meeting our 2050 Net Zero commitment. Between 30 April and 11 June 2025, the Department for Energy Security and Net Zero (DESNZ) consulted on changes to the Boiler Upgrade Scheme and proposals to mandate the Microgeneration Certification Scheme as the sole certification scheme for all DESNZ clean heat schemes. DESNZ will respond to the consultation in due course. Installations of qualifying energy-saving materials (ESMs) in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027, after which they will revert to the reduced rate of VAT at five per cent. This support – worth over £1 billion – will aid households and charities in improving the energy efficiency of their buildings.

What steps her Department is taking to support consumers who have experienced potential (a) mis-selling and (b) fraud on fractional timeshare finance products.

The government takes the issue of fraud very seriously and is dedicated to protecting the public from this devastating crime. Tackling fraud requires a unified and coordinated response from government, regulators, law enforcement and the private sector to better protect the public and businesses from fraud. The legislation surrounding the sale of timeshares and credit agreements relating to timeshares provide routes of redress where consumers have been misled. Firstly, it is an offence under the Digital Markets, Competition and Consumers Act 2024 for traders to engage in unfair commercial practices which mislead consumers, and it is punishable by a fine or imprisonment for up to two years. The Act will also afford rights of redress for consumers. Regarding the timeshare market specifically, the Timeshare, Holiday Products, Resale and Exchange Regulations 2010 provide protections for consumers buying and selling timeshares and other long-term “holiday club” memberships, including provision for consumers to withdraw from their contract. Consumers are protected from fraud in consumer law. Consumers that believe they have been fraudulently sold timeshare products should raise their concerns with the relevant enforcement authorities. In cases where a consumer took out a regulated financial product to purchase a timeshare, they may have recourse to the Financial Ombudsman Service (FOS) if that product was mis-sold. When complaints are made to the FOS, these should be dealt with in a timely manner. The Financial Conduct Authority (FCA) Handbook, which sets out the rules on how the FOS should handle complaints, states that ‘the ombudsman will attempt to resolve complaints at the earliest possible stage’.  Ensuring timely outcomes is one of the FOS’s main priorities for 2025-26 and it has set itself a target to resolve 85 per cent of cases received in the year within 6 months.

What assessment her Department has made of the potential impact of the time taken for the Financial Ombudsman Service to make final decisions on fractional timeshare finance products on consumers.

The government takes the issue of fraud very seriously and is dedicated to protecting the public from this devastating crime. Tackling fraud requires a unified and coordinated response from government, regulators, law enforcement and the private sector to better protect the public and businesses from fraud. The legislation surrounding the sale of timeshares and credit agreements relating to timeshares provide routes of redress where consumers have been misled. Firstly, it is an offence under the Digital Markets, Competition and Consumers Act 2024 for traders to engage in unfair commercial practices which mislead consumers, and it is punishable by a fine or imprisonment for up to two years. The Act will also afford rights of redress for consumers. Regarding the timeshare market specifically, the Timeshare, Holiday Products, Resale and Exchange Regulations 2010 provide protections for consumers buying and selling timeshares and other long-term “holiday club” memberships, including provision for consumers to withdraw from their contract. Consumers are protected from fraud in consumer law. Consumers that believe they have been fraudulently sold timeshare products should raise their concerns with the relevant enforcement authorities. In cases where a consumer took out a regulated financial product to purchase a timeshare, they may have recourse to the Financial Ombudsman Service (FOS) if that product was mis-sold. When complaints are made to the FOS, these should be dealt with in a timely manner. The Financial Conduct Authority (FCA) Handbook, which sets out the rules on how the FOS should handle complaints, states that ‘the ombudsman will attempt to resolve complaints at the earliest possible stage’.  Ensuring timely outcomes is one of the FOS’s main priorities for 2025-26 and it has set itself a target to resolve 85 per cent of cases received in the year within 6 months.

What assessment she has made of the potential impact of the introduction of low benefit-in-kind rates for electric vehicles on GDP since 2020-21.

Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition. In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024. Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation. At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.

What assessment she has made of the impact of the introduction of low benefit-in-kind rates for electric vehicles on supply chain security since 2020-21.

Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition. In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024. Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation. At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.

What assessment she has made of the potential impact of the introduction of low benefit-in-kind rates for electric vehicles on job creation since 2020-21.

Company cars in the UK are subject to an emissions-based regime, which taxes vehicles based on their list price as well as their CO2 emission level. The Government recognises that this regime plays an important role in the electric vehicle transition. In July 2019, the Government announced new company car tax rates for the tax years 2020 to 2025, which included generous incentives for electric vehicles. These were legislated for as part of the Finance Act 2020. The Government subsequently announced rates for 2025 to 2028 at Autumn Statement 2022, and rates for 2028 to 2030 at Autumn Budget 2024. Alongside each fiscal event where the changes were announced, an accompanying Tax Information and Impact Note was published setting out expected economic, equalities and other impacts of the new rates. In each of these notes, the rates were not expected to have any significant macroeconomic impacts, such as impacts on GDP and job creation. At Budget 2024, the Chancellor announced £2 billion of funding to 2030 to support the zero emissions vehicle manufacturing base and supply chain, recognising the value that the industry delivers for the UK and its ongoing transition.

What assessment she has made of the potential impact of benefit-in-kind rates for electric vehicles on the annual uptake of electric vehicles.

HMRC publishes annual statistics which provide information about the company cars provided as benefits in kind to employees by employers, including the proportion of the company car stock which is electric. The most recent statistics were published in June 2024 for the tax year 2022-23, which showed that 220,000 company cars were fully electric, or 29% of the total company car stock, an increase from 50,000 in 2020-21. The Government is committed to supporting the transition to electric vehicles, and generous company car tax rates for electric cars have been a key incentive for increasing their number on the road. Electric company cars also play a significant role in supporting the used EV markets. At the end of their lease company cars are sold into the used markets, which is where the majority of car sales take place in the UK. There were 314,000 zero emission cars registered for the first time in 2023, an increase of 18 per cent from 2022.

If she will make an assessment of the potential merits of bringing forward legislative proposals to allow public sector employees to sacrifice salary to lease an electric vehicle.

I refer the Honourable Member to the answer I gave to PQ UIN 25529.