Written questions by Hodgson.

How many public sector workers have received an above-inflation pay rise in Washington and Gateshead South constituency since 5 July 2024.

We value all our public sector workers, and pay awards reflect the important work that our nurses, teachers, doctors, prison officers and soldiers do to keep the country running.The overwhelming majority of awards announced in 2025/26, including for all of the above workforces, announced are above the OBR’s forecast for CPI inflation over the 2025/26 pay year. Whilst I cannot confirm the number of public sector workers in the Washington and Gateshead South constituency in receipt of those pay awards, all those workers set out above will benefit from the above inflation pay uplift.

What assessment she had made of the potential implications for her policies that heat batteries do not qualify for VAT relief through the Energy Saving Materials framework, while being MCS-certified and eligible for support under the Boiler Upgrade Scheme in the same way as heat pumps.

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. The list of qualifying ESMs, which includes but is not limited to heat pumps, can be found here: https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086.The Government assesses whether to add ESMs to this relief by evaluating them against the following tests: the primary purpose of the technology must be to improve energy efficiency and reduce carbon emissions; relieving the technology of VAT must be a cost effective lever for encouraging installations; and it must be practical for business to operate and for HMRC to administer.

Whether she has considered adding heat batteries to the list of Energy Saving Materials.

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. The list of qualifying ESMs, which includes but is not limited to heat pumps, can be found here: https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086.The Government assesses whether to add ESMs to this relief by evaluating them against the following tests: the primary purpose of the technology must be to improve energy efficiency and reduce carbon emissions; relieving the technology of VAT must be a cost effective lever for encouraging installations; and it must be practical for business to operate and for HMRC to administer.

What assessment she has made of the potential impact of planned business rates reforms on the wholesale sector; and if she will consider extending retail-equivalent reliefs to wholesalers.

The Government currently provides a 40 per cent business rates relief for eligible retail, hospitality, and leisure (RHL) properties, up to a cash cap of £110,0000 per business, in 2025-26. Eligibility for the RHL relief scheme is outlined in guidance published by the Ministry of Housing, Communities & Local Government, and is focused on RHL properties that are wholly or mainly open to visiting members of the public. This is to ensure that support is targeted at in-person RHL, thereby helping to rebalance the burden between online and high-street retailers. There are no plans to expand the scope of this relief. From 2026/27, the Government is introducing permanently lower business rates multipliers for RHL properties with rateable values (RVs) below £500,000. Details on which RHL properties will qualify for these lower multipliers can be found online here:https://www.gov.uk/guidance/business-rates-multipliers-qualifying-retail-hospitality-or-leisure. To fund these lower RHL multipliers sustainably, from 2026/27, the Government is also introducing a higher multiplier on properties with RVs of £500,000 and above.

What assessment she made of the role of wholesalers in maintaining supply chain resilience when determining eligibility for business rates reliefs.

The Government currently provides a 40 per cent business rates relief for eligible retail, hospitality, and leisure (RHL) properties, up to a cash cap of £110,0000 per business, in 2025-26. Eligibility for the RHL relief scheme is outlined in guidance published by the Ministry of Housing, Communities & Local Government, and is focused on RHL properties that are wholly or mainly open to visiting members of the public. This is to ensure that support is targeted at in-person RHL, thereby helping to rebalance the burden between online and high-street retailers. There are no plans to expand the scope of this relief. From 2026/27, the Government is introducing permanently lower business rates multipliers for RHL properties with rateable values (RVs) below £500,000. Details on which RHL properties will qualify for these lower multipliers can be found online here:https://www.gov.uk/guidance/business-rates-multipliers-qualifying-retail-hospitality-or-leisure. To fund these lower RHL multipliers sustainably, from 2026/27, the Government is also introducing a higher multiplier on properties with RVs of £500,000 and above.

Whether she has considered the potential merits of (a) tax and (b) subsidy incentives in reducing the cost of alcohol-free drinks.

Alcohol-free drinks are already tax advantaged compared to alcoholic drinks because they do not attract alcohol duty, which is charged only on products containing 1.2% alcohol by volume (ABV) or more. This reflects the Government’s intentions to encourage healthier lifestyle choices. VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations. Soft drinks and non-alcoholic drinks are subject to the standard 20 per cent rate of VAT. Further information about the VAT treatment of soft drinks and non-alcoholic drinks can be found here: https://www.gov.uk/guidance/food-products-and-vat-notice-70114 The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances. The Government welcomes representations from relevant stakeholders in advance of the Budget.

Whether her Department has made an assessment of the potential impact of (a) VAT rates and (b) other fiscal measures on the relative pricing of (i) alcohol-free and (ii) alcoholic drinks.

Alcohol-free drinks are already tax advantaged compared to alcoholic drinks because they do not attract alcohol duty, which is charged only on products containing 1.2% alcohol by volume (ABV) or more. This reflects the Government’s intentions to encourage healthier lifestyle choices. VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations. Soft drinks and non-alcoholic drinks are subject to the standard 20 per cent rate of VAT. Further information about the VAT treatment of soft drinks and non-alcoholic drinks can be found here: https://www.gov.uk/guidance/food-products-and-vat-notice-70114 The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances. The Government welcomes representations from relevant stakeholders in advance of the Budget.

What assessment her Department has made of the potential merits of extending exemptions to the proposed lactose allowance for milk-based drinks to equivalent milk-substitute drinks as part of the Soft Drinks Industry Levy.

At Autumn Budget 2024 the Chancellor announced her intention to review the Soft Drinks Industry levy (SDIL) – which has incentivised producers to remove almost half (46%) the sugar in relevant drinks – to further drive product reformulation. The ‘Strengthening the Soft Drinks Industry Levy’ consultation, published on 28 April 2025 , therefore sets out proposals to reduce the minimum sugar content threshold at which the levy applies, and to remove the current exemptions for milk-based drinks and milk substitute drinks with added sugar. To account for the naturally occurring sugar in the milk component of these milk-based drinks, the consultation proposes the introduction of a lactose allowance. This will be calculated based upon the milk content of each drink. The Government is also consulting on the treatment of milk substitute drinks, and proposes only to extend the SDIL to milk substitutes with added sugar. In a similar fashion to the lactose allowance, drinks with sugars only released from their principal, or ‘core’ ingredient will be out of scope of the levy. This is to maintain consistency of treatment between milk substitute drinks and plain animal milk-based drinks, whilst bringing into SDIL milk substitutes with added sugar, including the flavoured varieties that could be consumed as alternatives to flavoured milk-based drinks. Under these proposals, if any sugars other than those from the principal ingredient are added to a milk substitute drink the SDIL thresholds will apply, based on total sugar content (g) per 100ml.

Pursuant to the Answer of 4 March to Question 33256 on Revenue and Customs: Telephone Services, (a) what steps her department is taking to decrease the average wait time for calls to be answered by HMRC and (b) what plans she has to prevent customers being directed to digital services and the HMRC app when their case requires an over-the-phone conversation.

HMRC received additional funding last year to recruit more customer service advisers to help improve telephony performance. HMRC recognise the real difficulties that delays on phones cause customers. At the end of last year, performance on helplines had improved and HMRC met their telephony service standard in Quarter Three of 2024-25. They continue to aim to answer calls as quickly as possible but wait times may be longer than usual during busy periods. HMRC publish monthly performance data, including information on their telephony service, which can be found here: https://www.gov.uk/government/collections/hmrc-monthly-performance-reports. HMRC’s online services and the HMRC app consistently receive high customer satisfaction ratings. However, HMRC know that not all tasks can currently be completed online. The HMRC transformation roadmap, which will be published later this year, will include details about additional digital services that will mean a better experience for taxpayers, agents, and businesses. In the meantime, HMRC’s helplines remain available to support taxpayers with any queries which cannot be resolved online. HMRC are committed to providing efficient and accessible services to all their customers.

If she will take steps to exempt training provided by the Music and Dance Scheme from VAT.

Performing arts schools that offer full-time education to children of compulsory school age and/or 16-19 year olds for a charge will remain in scope of the policy to apply VAT to their fees and this includes the Music and Dance Scheme. This is to ensure fairness and consistency across all schools that provide education services and vocational training for a charge. The Government has no plans to exempt further schools from this policy. However, the Department for Education has decided to adjust its Music and Dance Scheme bursary contribution for families with a relevant income below £45,000 to account for the VAT that will be applied on fees, ensuring that the total parental fee contributions for families with below average relevant incomes remain unchanged for the rest of the 2024/25 academic year.

Whether she has had recent discussions with the food and drink wholesale sector on the classification of wholesale premises as online retail warehouses in the Transforming Business Rates Policy Paper; and what assessment she has made of the potential impact of this classification on the sector.

HM Treasury releases a quarterly record of Ministers’ meetings with external individuals and organisations. This can be found online: https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel. The Transforming Business Rates Discussion Paper, published by the Government at the Autumn Budget, set out that we are creating a fairer business rates system that protects the high-street, supports investment, and is fit for the 21st century. To deliver our manifesto pledge, we intend to introduce permanently lower tax rates for high street retail, hospitality, and leisure (RHL) properties, with rateable values below £500,000, from 2026-27. This tax cut must be sustainably funded, and so the Government intends to apply a higher rate from 2026-27 on the most valuable properties - those with a Rateable Value of £500,000 and above. These represent less than one per cent of all properties, but include the majority of large distribution warehouses, including those used by online giants. The rates for any new business rate multipliers will be set at Budget 2025 so that the Government can take into account the upcoming revaluation outcomes as well as the economic and fiscal context. The statutory definition for qualifying RHL properties will be set out in regulations ahead of implementation in the 2026-27 financial year.