Local Authority Finances
Debate between Baroness Penn and Lord Bird(2 months, 3 weeks ago)
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Baroness Penn (Con)
My Lords, in recent years we have tried to give more clarity around elements of the settlement on a multi-year basis. We will continue to do this for the next spending review and beyond.
Lord Bird (CB)
My Lords, one of the big problems that local authorities have is dealing with more and more homeless people. Section 21 on no-fault evictions is still on the statute book and causing more problems for the local authorities that have to deal with a mass increase in homelessness.
Baroness Penn (Con)
I reassure the noble Lord that the Government are committed to abolishing Section 21 evictions. That is what the Renters (Reform) Bill, currently being considered by the House of Commons, will do. Additionally, we have put wider support in place to tackle housing pressures, through building more affordable homes and, for example, increasing the level of the local housing allowance.
Homelessness
Debate between Baroness Penn and Lord Bird(4 months, 2 weeks ago)
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Lord Bird (CB)
Are the Government aware that for every person who falls homeless—they are not all out on the streets—the cost of running that homeless family or individual is two or three times higher than if you keep them in their homes? Has the Treasury done any serious work looking at how to keep the costs of homelessness down by keeping people in their homes?
Baroness Penn (Con)
The noble Lord is absolutely right. That is why we passed the Homelessness Reduction Act and why more than half the support we have put directly into tackling homelessness is around prevention. That is funding to local authorities to work with landlords to prevent evictions, for example, before people find themselves in the position of needing to seek out temporary accommodation.
Levelling Up: North-east England
Debate between Baroness Penn and Lord Bird(4 months, 2 weeks ago)
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Baroness Penn (Con)
My Lords, I believe that the north-east devolution deal will help deliver that overall approach but put its delivery in the hands of local leaders and an elected mayor. When it comes to competitive bids, we have heard feedback from many local areas and that is why the third round of the levelling up fund was not allocated using competitive bids. We have also set out principles, going forward, in our local government funding simplification plan. Finally, on which areas have benefited from funding from this Government, under the levelling up funds the north-east has received the highest allocation per capita—quite rightly, as it reflects the need in the north-east.
Lord Bird (CB)
Is the Minister aware that, in spite of all the Government’s levelling-up efforts, over Christmas there will be 140,000 children and 300,000 people in temporary accommodation? This has gone up by 14% in the last year, according to Shelter and the Big Issue. What can the Minister say about that?
Baroness Penn (Con)
I am aware of the figures that the noble Lord cites, and I think it is a tragedy. The Government are committed to doing all we can to address it. We have seen a real increase in pressure on the private rented sector over the past year, which leads to increases in people in temporary accommodation. At the Autumn Statement, we announced further funding towards tackling homelessness to help address this. We also announced that the local housing allowance will be increased to the 30th percentile, which will help address those cost pressures in the private rented sector, so we are doing a lot to try to address this issue.
Gross Domestic Product: Wales and the UK
Debate between Baroness Penn and Lord Bird(10 months ago)
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Lord Bird (CB)
My Lords, as long as there is a situation in government where most of the money spent is on emergency situations and coping with poverty and very little is spent on prevention of poverty and skilling people away from poverty, we will continue arguing about GDP and whether it is high or low in Wales or England. We do not spend money on dismantling poverty—we spend it on making the poor as comfortable as possible.
Baroness Penn (Con)
My Lords, I agree with the noble Lord about the importance of investing in prevention. That is why we have invested in our education system, and we have seen our educational outputs improve under this Government. It is why we are investing in prevention in our NHS. We also need to capture the importance of other aspects that contribute to our country when we look at these matters. That is why we are looking at incorporating measures when it comes to well-being, for example, and not just looking at the narrow measures of GDP.
Cross-Government Cost Cutting
Debate between Baroness Penn and Lord Bird(1 year, 4 months ago)
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The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, the Government announced the efficiency and savings review in the Autumn Statement to keep spending focused on government priorities and to help departments manage the inflationary and other pressures on their budgets; all savings will be reinvested in departments’ budgets. We need to be ambitious as a Government in finding ways of working more efficiently and focusing spending on where it delivers the greatest value for the taxpayer. The Government will report on progress in the spring.
Lord Bird (CB)
Does the Treasury also measure the costs of cost-cutting, because that is the important thing, is it not? It is all well and good to cut something, but if the damage is greater than the savings, surely it is not wise government to do that.
Baroness Penn (Con)
I put it to the noble Lord that there is a cost to not having efficiency and value for money in our services. That means we can deliver less for people for the money that we are putting into them. We want to see it the other way around, and that is the aim of this review.
Primary Care: Quality and Access Improvements
Debate between Baroness Penn and Lord Bird
Baroness Penn (Con)
My understanding is that the establishment of Select Committees is a question for Parliament, not the Government.
Lord Bird (CB)
Is it possible to look at the fact that 50% of the people who present in the NHS are suffering from food poverty? Of those suffering from cardiac arrest, for example, 50% are to do with food poverty. When are we going to address the long-term overriding problem of poverty, which destroys our NHS?
Baroness Penn (Con)
I am not aware of the specific statistic that the noble Lord refers to but we are doing a huge amount to support people, particularly during this difficult economic time. People are facing increased costs, which is why we have put in £37 billion worth of support this year, focused on the most vulnerable and those on the lowest incomes.
Financial Inclusion
Debate between Baroness Penn and Lord Bird
Baroness Penn (Con)
I say to the noble Lord that the £37 billion of financial support offered to people this year to support them with the high costs of living has been targeted at those on the lowest incomes and those least able to pay. So the Government have taken progressive measures to help protect people against rising costs of living.
Lord Bird (CB)
Does the Minister agree that if you fail 35% of our children at school, then you are going to have a lot of financial exclusion?
Baroness Penn (Con)
My Lords, I agree that school is a very important place to start for people’s life chances, and also their financial understanding. I am pleased to say that under this Government, the achievement gap for children at school between those in the poorest households and those in the wealthiest households has narrowed. That is something that we need to continue to make progress on.
Economy: Spring Statement
Debate between Baroness Penn and Lord Bird
Baroness Penn (Con)
My Lords, I make two points. One is that we have been increasing the value of the state pension, as I just said. Secondly, for those who rely solely on the state pension for their income, there is pension credit in addition. We are doing a lot of work to drive an increase in the take-up of pension credit so that people who are entitled to that extra support access it.
On food insecurity, the latest statistics from the DWP on households with below-average income, which came out today, show that the percentage of individuals in food-insecure households fell from 8% in 2019-20 to 6% in 2020-21. I completely acknowledge that that is still too many and that, of course, the nature of those statistics means that they lag behind by a year. I have already mentioned the household support fund that the Government have put in place but, beyond that, we have increased the value of Healthy Start food vouchers and are investing more than £200 million a year from 2022 to continue our holiday activities and food programme, which already provides enriching activities and healthy meals to children in all English local authorities.
The noble Baroness, Lady Boycott, asked about BOGOF promotions. We recognise that there will be costs to businesses associated with implementing this policy. However, the cost of obesity to individuals, society and the NHS is significant; the benefits of reducing calorie intake across the population are therefore substantial and outweigh the costs of that policy.
In the longer term, we can best support people to cope with the rising cost of living by helping them into work—not just into jobs but into better-paid jobs. The noble Lord, Lord Bird, talked about long-term investment in social programmes. In July 2020, the Government launched their plan for jobs, which is one of the most comprehensive and ambitious plans in the world, to protect, support and create jobs across our country. That plan is working, as demonstrated by unemployment falling for 12 consecutive months back to below pre-pandemic rates.
The Government have been building on the measures announced in the 2021 spending review to support people in finding work and increasing their earnings. We will spend more than £6 billion on labour market support over the next three years. That includes extending for a further 12 months the Department for Work and Pensions’ train and progress programme, whereby those on universal credit can spend up to 12 weeks in training, or up to 16 weeks in training in subjects with skills at boot camps, instead of eight weeks. That will allow those who have recently become unemployed or are at risk of unemployment to retrain into priority sectors.
Further, we have doubled the number of work coaches in the system to 27,000 and we have the KickStart scheme, which has supported 130,000 young people into KickStart jobs. We have also announced more than £1.1 billion of funding over the next three years for programmes that enable people with disabilities or long-term health conditions to find and sustain employment. This includes continuing the Access to Work scheme, which offers financial and practical assistance in making workplace adaptions, and the work and health programme, which provides tailored support for individuals to overcome their specific obstacles to employment.
Beyond this, in terms of support for wages, the Government have introduced the national living wage. As I said, this will increase in April by 6.6%. There is also a new in-work progression offer. This means that, for the first time, people who are on universal credit and are already in work can access individualised work coach support that focuses on helping them to increase their earnings and progress in their jobs. The other element to support that progression is investment in skills. We will invest £3.8 billion in skills in England by 2024-25.
The point about investment in skills allows me to touch on another point made by the noble Lord, Lord Bird, about the importance of education. It is absolutely essential. In the House, we dealt with the skills Bill as part of the Government’s plans to ensure that technical and further education get the support in this country that they rightly deserve. This week, we published the schools White Paper and the SEND Green Paper, which focus on improving educational outcomes for children. We have narrowed the attainment gap for children in the poorest households but there is so much more to do. The noble Lord, Lord Macpherson, talked about the need for long-term action in this area, building cross-party alliances. I do not pretend that there is agreement on all aspects of our plans but, on skills and education, the policies we have designed and the Government’s approach are definitely in that spirit.
This brings me to the question of public sector spending and the comments of the noble Lord, Lord Hain, who talked about cuts to public spending. I have to disagree with the noble Lord. The spending review in 2021 set departmental budgets up to 2024-25 and, based on these plans, total departmental spending is set to grow in real terms by 3.7% a year on average over this Parliament; that is £150 billion in cash terms and an increase of £88 billion in real terms.
I will address the point made by the noble Lord, Lord Davies, about the GDP deflator. Of course, the GDP deflator is a broader measure of inflation than CPI, which just measures the inflation felt by consumers. Government operates across the whole of the economy and therefore it is appropriate to use the wider measure of inflation. This is the measure that is always used to look at these questions.
The noble Lord, Lord Hain, also questioned whether, as we meet our fiscal rules, we should use the additional headroom to allow people to keep more of the money they earn, and suggested that we might have set our priorities in the wrong place. I disagree with the noble Lord; I think his own Front Bench may disagree with the noble Lord also. It is partly for this reason: the size of the state is expected to grow to 41.3% of the economy in 2024-25—up from 39.9% in 2007-08. So, when we are in a position to do so, we should look at cutting taxes for ordinary working people to put more money back into their pockets.
On the subject of spending, the noble Lord, Lord Macpherson, raised defence spending. He will know that defence spending has been prioritised by this Government. In the spending review 2020, the MoD was awarded the largest sustained spending increase since the end of the Cold War. Underpinning that spending review decision was The Integrated Review of Security, Defence, Development and Foreign Policy, which recognised that Russia remained
“the most acute threat to our security”
and that:
“NATO will remain the foundation of collective security in … the Euro-Atlantic”.
I was previously accused of being complacent on this subject, and I reassure noble Lords that I and the Government are not. All I would say to the noble Lord, Lord Macpherson, is that we are only five weeks into the conflict in Ukraine. I think it is something that will develop and unfold over a longer time period, so I caution against changing long-term plans and decisions based on the length of experience so far.
I turn to a subject where I agree with many noble Lords: the question of growth. The noble Lords, Lord Desai, Lord Horam, Lord Macpherson, Lord Hain, and others all pointed to the fundamental need to get more growth into our economy. That is why the second part of our tax plan is focused on exactly that.
On infrastructure, we have launched the UK Infra- structure Bank and confirmed a total of £100 billion of investment in economic infrastructure over the spending review period. On skills, I have already referred to the important investment we have made, including things such as the lifelong learning entitlement and the development of skills bootcamps. On innovation, we are increasing public investment in R&D to £20 billion by 2024-25 and we are focused on boosting small and medium enterprise productivity through the help to grow scheme. I could go on, but I am conscious of time.
Many noble Lords asked about the 1p cut to income tax in 2024. We have had a wider debate in this Committee about the merits of taxing earned versus unearned income. As the Government’s tax plan made clear, we want to spread the proceeds of growth. That is why the tax cut applies to a broad set of taxpayers. I am very aware of the concerns about how we are treating earned versus unearned growth. As I assured noble Lords yesterday, the tax cut does not apply to dividend income. Dividend tax rates will rise as planned this April and not reduce in 2024.
The Government have also taken significant steps to ensure that rental income is taxed fairly, including restricting the finance cost relief so that landlords can no longer get relief at the marginal rate if they are a higher or additional taxpayer. Purchases of additional properties are also subject to higher additional rates of stamp duty.
The noble Lord, Lord Sikka, raised the question of charging national insurance on capital gains. He will be well aware of the history of national insurance contributions as part of the UK’s social security system. That system is based on a long-standing contributory principle around paid employment and self-employment, with employers, employees and the self-employed paying towards the protection of those who have been in the labour market. That is why NICs focus on the tax base that they do.
The noble Lord, Lord Turnbull, talked about housing wealth funding social care, while the noble Lord, Lord Davies of Brixton, asked me yesterday whether there are any plans to change NICs treatment for the self-employed. I was clear to him then that the Government do not have any plans in this area. The proposal to use housing wealth to fund social care was included in the Conservative Party manifesto but was not welcomed by any party—perhaps including the Conservative Party—in that election. I do not make that point flippantly; it is important that policies put forward to be delivered, particularly as we discuss them in the unelected House, have the consent of the public. If we want to enact change, ultimately, we need people’s support for those changes. Some of the debates that we have today ultimately translate into broader debates across the country.
I heard the points that the noble Baroness, Lady Kramer, made. I hope she will forgive me for pointing to the fact that it was a Lib Dem policy to raise the income tax threshold to £10,000 while adding a penny to national insurance to pay for the NHS. I might be out of date on their approach now but that is worth bearing in mind.
Underlying a lot of this debate are the choices that the Government have made.
Lord Bird (CB)
Would it not be true to say that what we are experiencing here is that it is very expensive to keep people poor?
Baroness Penn (Con)
I absolutely agree with the noble Lord. That is why I tried in my speech to point to all the investment that the Government are making in helping people to move out of poverty and have a better life than they otherwise would.
In fact, the noble Lord’s point about the choices we have made in this Spring Statement and overall as a Government is a good one. I pointed to the distributional analysis published with the 2022 Spring Statement. Our modelling shows that the poorest 66% of houses receive more in public spending than they contribute in tax and, on average, households in the lowest income decile will receive more than £4 in public spending for every £1 that they pay in tax. The impact of government policy since the 2019 spending round on the bottom four deciles is expected to be worth more than £1,000 a year, while there has been a net benefit on average for the poorest 80% of households.
Build Back Better Business Council
Debate between Baroness Penn and Lord Bird(3 years, 2 months ago)
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Baroness Penn (Con)
The noble Lord is right in the points that he makes. The Prime Minister and Chancellor’s business council is in addition to regular and ongoing engagement with trade unions, businesses and business representative groups across government to ensure that they continue to play an important role to feed in to the Government about economic recovery, future growth and clean growth.
Lord Bird (CB)
Is the Minister aware of the Ride Out Recession Alliance, which has been going since July, and has brought together very large businesses, such as Unilever and Nationwide, with trade unions, SMEs and social enterprises? It is driven by the SDGs and by the idea that we need jobs and training, and not to allow people to fall into Covid-19 poverty so that they end up homeless. I would like to know whether the Ride Out Recession Alliance could be incorporated into the wonderful Build Back Better Council.
Baroness Penn (Con)
I am aware of the work of the alliance, thanks to the noble Lord bringing it to my attention in previous Questions. I have also highlighted it to a range of government departments, so that they can look at the work that it is doing and integrate it into their own.
Adult Learning: Union Learning Fund
Debate between Baroness Penn and Lord Bird
Baroness Penn (Con)
My Lords, I was not party to those conversations. However, on taking forward the national skills fund and the lifetime skills guarantee, we are obviously consulting with businesses and with people across the sector about their effective operation, and we will continue to take that approach.
Lord Bird (CB)
I declare my interest in the Big Issue. We have started something called the Ride Out Recession Alliance, which is working with unions, businesses, local authorities and politicians. This is the time for solidarity. May I suggest that it would be a waste of money to cut this fund at the moment, because the unions—Unite and all the other unions—are getting behind the whole idea that we all have to have solidarity in the workplace and in training over the next 20 years, if not more?
Baroness Penn (Con)
My Lords, on the delivery of skills provision, the Government have taken the decision not to continue this funding, but that does not represent a cut to the funding of skills provision overall. In fact, this is being increased and we are making sure that it is available to a wider group of people.
Covid-19: Social and Economic Inequalities
Debate between Baroness Penn and Lord Bird
Baroness Penn (Con)
The Government are conscious of this. We distinguish between short-term help during the pandemic—where the extra support we are putting into families and livelihoods will prevent the worst outcomes that could occur during this recession—and the medium term, when we will need to get the public finances back on to a sustainable footing.
Lord Bird (CB)
My Lords, I declare my interests as in the register. Does the Treasury know about the Ride Out Recession Alliance? This is bringing businesses, communities and individuals together to try to stop the mass arrival of homelessness in this country by creating jobs and training. Is it also aware that the cost of preventing people falling into homelessness is about half that of allowing them to do so?
Baroness Penn (Con)
I will certainly ensure that the Treasury finds out about the Ride Out Recession Alliance, if it is not aware of its work already. I agree with the noble Lord about the benefits of preventing homelessness and many other issues. During the pandemic we have increased the value of the local housing allowance to help people stay in their own homes, even if they have suffered adverse economic effects from the pandemic.
Economic Outlook and Furlough Scheme Changes
Debate between Baroness Penn and Lord Bird
Baroness Penn
My noble friend is right that there is a balance to be struck with such schemes. The pathway that we have set out for the gradual contribution of businesses to the costs of furloughed employees, and the ability to bring them back to work flexibly and for as many hours as they need, strikes the right balance in that scheme.
Lord Bird (CB) [V]
I suggest that one of the big issues today is not simply removing the homeless from the streets—as this Government valiantly did, and we should back them for that—but preventing homelessness. That is the real big issue. I call on the Government to have a moratorium on evictions, provide work through jobs training and invest in businesses to keep people in work. Importantly, if people slip into the treacle of homelessness, they will be there for decades, children will be hurt and there will be a knock-on effect on the NHS and the well-being of our whole society. We have to concentrate on preventing people falling into homelessness.
Baroness Penn
I completely agree with the noble Lord that we need to take preventive action on homelessness as well as dealing with the problem where it arises. The Government have put in place a three-month moratorium on evictions, which can be extended. We have also increased the generosity of the local housing allowance to help those who are renting but may have lost their job or income due to coronavirus. A couple of noble Lords have now raised the question of investing in businesses; most of our support is of course given through loans to businesses, but the Future Fund makes equity investments in early start-ups that have been unable to access other finance.