Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Baroness Sherlock on 18 June (HL7933), what would be the anticipated net revenue gain from maintaining the Winter Fuel Payment for all citizens of age except higher-rate taxpayers.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government has been clear that it wants more pensioners to benefit from Winter Fuel Payments. More than three quarters - the vast majority of pensioners - will benefit from a Winter Fuel Payment. The threshold is also broadly in line with average earnings and ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty.
Taxing the Winter Fuel Payment would go against the general rule that income replacement benefits are taxable but those such as Winter Fuel Payments, which are designed for specific costs, generally are not.
The Winter Fuel Payment remains tax free, ensuring those pensioners on lower and middle incomes receive the full benefit of the Winter Fuel Payment, which would not be the case if it was a taxable payment. The new £35,000 threshold ensures those pensioners with the highest incomes do not benefit from the payment and ensures fairness for both pensioners and taxpayers.
There are about 2 million pensioners with an income above £35,000. Based on 2023-24 data, the last publicly available estimates of this data, about 750,000 pensioners were higher rate tax payer and around 90,000 were additional rate tax payers.
Our Winter Fuel Payment policy is in line with our wider welfare reforms – ensuring support is targeted and that it is a responsible use of taxpayers’ money.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Baroness Sherlock on 18 June (HL7933), what would be the anticipated net revenue gain from taxing the Winter Fuel Payment.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government has been clear that it wants more pensioners to benefit from Winter Fuel Payments. More than three quarters - the vast majority of pensioners - will benefit from a Winter Fuel Payment. The threshold is also broadly in line with average earnings and ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty.
Taxing the Winter Fuel Payment would go against the general rule that income replacement benefits are taxable but those such as Winter Fuel Payments, which are designed for specific costs, generally are not.
The Winter Fuel Payment remains tax free, ensuring those pensioners on lower and middle incomes receive the full benefit of the Winter Fuel Payment, which would not be the case if it was a taxable payment. The new £35,000 threshold ensures those pensioners with the highest incomes do not benefit from the payment and ensures fairness for both pensioners and taxpayers.
There are about 2 million pensioners with an income above £35,000. Based on 2023-24 data, the last publicly available estimates of this data, about 750,000 pensioners were higher rate tax payer and around 90,000 were additional rate tax payers.
Our Winter Fuel Payment policy is in line with our wider welfare reforms – ensuring support is targeted and that it is a responsible use of taxpayers’ money.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the Barnett consequential as a result of funding allocated to the new Oxford–Cambridge railway line for (1) Scotland and (2) Northern Ireland.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
At the Spending Review 2025, the Barnett formula was applied at department level using departmental comparability factors. This means that Barnett consequentials generated in relation to specific programmes cannot be determined.
The UK Government is responsible for heavy rail infrastructure across England and Wales and so directly spends money on this in Wales rather than funding the Welsh Government to do so through the Barnett formula.
This approach applies to our investment in rail in England and is consistent with the funding arrangements for all other policy areas reserved in Wales as set out in the Statement of Funding Policy.
As part of the Spending Review, the Chancellor announced at least £445m for railways in Wales over ten years, including new funding for Burns Review stations, North Wales Level Crossing, Padeswood Sidings and Cardiff West Junction.
The UK Government continues to work closely with the Welsh Government, including open discussions with HM Treasury to provide clarity on changes that have an impact on their funding, and to ensure the smooth delivery of funding arrangements.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the Barnett consequential that would have been allocated to Wales if the new Oxford–Cambridge railway line had been classified as an England project, rather than an England and Wales project.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
At the Spending Review 2025, the Barnett formula was applied at department level using departmental comparability factors. This means that Barnett consequentials generated in relation to specific programmes cannot be determined.
The UK Government is responsible for heavy rail infrastructure across England and Wales and so directly spends money on this in Wales rather than funding the Welsh Government to do so through the Barnett formula.
This approach applies to our investment in rail in England and is consistent with the funding arrangements for all other policy areas reserved in Wales as set out in the Statement of Funding Policy.
As part of the Spending Review, the Chancellor announced at least £445m for railways in Wales over ten years, including new funding for Burns Review stations, North Wales Level Crossing, Padeswood Sidings and Cardiff West Junction.
The UK Government continues to work closely with the Welsh Government, including open discussions with HM Treasury to provide clarity on changes that have an impact on their funding, and to ensure the smooth delivery of funding arrangements.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Lord Livermore on 11 November, why is HS2 defined as an England and Wales project attracting no Barnett consequential.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Heavy rail infrastructure is not devolved in Wales, hence the UK Government is responsible for spending on heavy rail infrastructure across England and Wales. The Government is committed to rail schemes in Wales, by providing funding for operations, maintenance and infrastructure, and enhancement schemes such as modernising Cardiff Central Station.
The approach to heavy rail infrastructure is consistent with the funding arrangements for other policy areas, such as the construction of prisons, where the UK Government is responsible for spending in Wales, as Justice is Reserved.
The Welsh Government is receiving at least 20% more funding per person than equivalent UK Government spending in England. That translates into over £4 billion more in 2025-26.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Lord Livermore on 7 November (HL1982), whether they will provide a more precise answer to the question of how much funding under the Barnett formula they estimate will go to (1) Scotland, (2) Wales, and (3) Northern Ireland as a result of the latest total for public investment in HS2.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
At spending reviews, the Barnett formula is applied to changes in a department’s overall budget (at department-level) rather than to specific programmes like HS2 (at programme-level). It is for the devolved governments to allocate their funding in devolved areas as they see fit and they are accountable to the devolved legislatures for their decisions.
The Block Grant Transparency publication breaks down all changes in the devolved governments’ block grant funding since the 2015 Spending Review up to and including Main Estimates 2023-24. The most recent report was published in July 2023.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government as a result of the latest total for public investment in HS2 how much funding under the Barnett formula they estimate will go to (1) Scotland, (2) Wales, and (3) Northern Ireland.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Barnett formula will continue to apply as set out in the published Statement of Funding Policy.
The UK Government is responsible for much of the rail infrastructure in Wales, and therefore spends money on this infrastructure rather than funding the Welsh Government to do so through the Barnett formula. In line with this responsibility, the UK Government is currently delivering an ambitious programme to upgrade Welsh railways.
In Scotland and Northern Ireland, rail infrastructure is a devolved responsibility, so the Scottish Government and Northern Ireland Executive receive funding through Barnett formula. The Barnett formula is applied at fiscal events when UK Government departmental budgets are set rather than being applied when departments announce how they are spending their budgets.
The Block Grant Transparency publication breaks down all changes in the devolved governments’ block grant funding from the 2015 Spending Review up to and including Main Estimates 2023-24. The most recent report was published in July 2023.
Overall, the devolved governments’ funding is at least 20% more per person than equivalent UK Government spending in other parts of the UK and the devolved governments can allocate their funding in devolved areas as they see fit.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the change in UK GDP since December 2019; and what assessment they have made of how this compares to (1) the US, (2) France, and (3) Canada, in the same period.
Answered by Baroness Penn
According to data from the independent Office for National Statistics (ONS), the change in real GDP from the three months to December 2019 to the three months to December 2021 (the latest available quarterly data) was -0.4%. This leaves the UK in the middle of the pack compared to other G7. The below table depicts this using publicly available data in the same period for real GDP in the rest of the G7.
3m to Dec 2021 relative to 3m to Dec 2019 | Real GDP change (%) |
US | 3.2 |
France | 0.9 |
Canada | 0.1 |
Italy | -0.3 |
UK | -0.4 |
Japan | -0.4 |
Germany | -1.1 |
However, the ONS has also advised that it is difficult to compare real GDP during the pandemic, due to differences in measurement of output in health and education. The ONS has noted that estimates of nominal GDP are more comparable. In nominal GDP terms, for the same period the UK is ranked 3rd compared to others in the G7 (see the below table).
3m to Dec 2021 relative to 3m to Dec 2019 | Nominal GDP change (%) |
US | 10.7 |
Canada | 10.7 |
UK | 4.9 |
France | 4.3 |
Germany | 4.3 |
Italy | 0.9 |
Japan | -1.7 |
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether UK GDP was lower at the end of 2021 than at the end of December 2019.
Answered by Baroness Penn
The independent Office for National Statistics (ONS) is responsible for measuring UK GDP. In the three months to December 2021 UK real GDP was 0.4% below its level in the three months to December 2019, where the economy was affected by restrictions necessitated by the Omicron wave at the end of the year. The ONS also produce monthly GDP figures, which show that in January 2022 real GDP was 0.8% above the level prior to the pandemic in February 2020.
Asked by: Lord Hain (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the UK's total GDP in December 2021 compared to February 2020, relative to the other G7 nations.
Answered by Baroness Penn
Her Majesty’s government regularly looks at UK economic growth in the context of growth in other advanced economies, including those in the G7. The Office for National Statistics publishes UK figures monthly, quarterly, and annually.
There are different metrics by which international GDP growth rates can be compared, varying by the time and reference period used. In the case of our G7 peers, as well as the UK, only Canada produces monthly GDP data. Monthly comparisons are therefore not possible for all members of the G7. International comparisons of economic growth are possible for all G7 members at both quarterly and yearly frequencies. This information is presented below.
Real GDP growth | Monthly | Quarterly | Quarterly | Quarterly | Annually |
Country | February 2020 to November 2021 | Q3 2021 Quarter on Year % growth | Q4 2021 Quarter on Year % growth | Q4 2019 to Q4 2021 | 2021 |
Canada | 0.2% | 4.0% | 3.4% | 0.2% | 4.7% |
France | N/A | 3.5% | 5.4% | 0.9% | 7.0% |
Germany | N/A | 2.9% | 1.4% | -1.5% | 2.8% |
Italy | N/A | 4.0% | 6.4% | -0.5% | 6.4% |
Japan | N/A | 1.2% | 0.7% | -1.9% | 1.7% |
UK | 0.2% | 7.0% | 6.5% | -0.5% | 7.5% |
US | N/A | 4.9% | 5.5% | 3.1% | 5.7% |
Source: Refinitv DataStream, HMT Calculations
Comparing monthly to the latest data available in both countries, November, the ratio of monthly real (seasonally adjusted) GDP between February 2020 and December 2021 was 0.2, in both the UK and Canada. Canada is yet to release December monthly data.
The UK’s 2021 Q3 quarter-on-year growth rate was 7.0%, compared to the US (4.9%), Italy and Canada (both 4%), France (3.5%), Germany (2.9%) and Japan (1.1%).
The ratio of real GDP from Q4 2019 to Q4 2021 in the UK was -0.5%, compared to the US (3.1%), France (0.9%), Canada (0.2%), Italy (-0.5%), Germany (-1.5%) and Japan (-1.9%).
Annually, the UK’s growth rate in 2021 was 7.5%, compared to France (7.0%), Italy (6.4%), the US (5.7%), Canada (4.7%), Germany (2.8%) and Japan (1.7%).