(7 years, 9 months ago)
Written StatementsThe Treasury has concluded its annual evaluation of Departments’ compliance with the rules governing off-payroll appointments in central Government for 2014-15. Specific rules implemented in 2012 require Departments’ most senior staff to be on payroll, and Departments now have stronger powers to seek assurance in relation to the tax arrangements of their long-term, high-paid contractors who are off-payroll. These rules do not cover other off-payroll engagements, which will include a broader category of staff and public sector organisations.
Below board-level off-payroll engagements
These rules apply where a new off-payroll engagement is for more than six months with a daily rate above £220. All engagements from 23 August 2012 meeting these criteria must include contractual provisions that allow the Department to seek assurance that the worker is either not a disguised employee, or, if they are, that they are paying the right amount of tax and national insurance contributions. If assurance is not provided the contract must be terminated. For any individuals where their engagement has either been terminated, ended as a result of the assurance process, or ended after assurance was sought but before it was received, Departments have been asked to provide personal details of the worker to HMRC for further investigation.
In accordance with the guidance, Departments adopt a risk-based approach in deciding which contractors to seek formal assurance from. In 2014-15, Departments sought assurance on the tax affairs of 3,034 of their contractors and informed the Treasury that they received satisfactory assurances from 2,530 of these engagements. In the remaining 504 cases, contracts were either terminated or came to an end before assurance was received. Referrals to HMRC occurred in all relevant cases across Government.
The review found that not all relevant contracts contained the clause required to allow Departments to seek assurance. At the time of the review period the rules had been in place for over two years, and it is reasonable to expect Departments to have these clauses in place. Departments can expect to be fined if breaches of this nature are found in the next review.
Board-level and senior appointments
The rules also specify that board-level appointments and those with significant financial responsibility should be on the payroll of the Department or other employing body, unless there are genuinely exceptional circumstances. Any such exceptions should not exist for longer than six months.
The review has uncovered two cases where there have been breaches of these rules. The Ministry of Defence and Department for Communities and Local Government have brought to my attention instances where a board member or senior official with significant financial responsibility at their arm’s length bodies remained off-payroll for longer than six months. Steps have been taken to resolve these breaches and, as the value of the salaries in question was considerably below the £58,200 annual rate at which Treasury monitors non-board level appointments, I have decided not to impose sanctions this time.
As in previous years, the review found instances where off-payroll workers at board level or with significant financial responsibility have been seconded to the Department from another organisation. Where the full value of payments from the Department to the individual are put through the payroll of the seconding organisation this has not been treated as a breach of the Treasury rules.
Next steps
The Treasury will continue to monitor Department’s compliance with these rules and will conduct a similar review for the 2015-16 financial year. The Treasury is keen to increase compliance both with the Treasury rules, and also with the ‘intermediaries legislation’—the tax rules for disguised employees.
While not directly covered by this review, the ‘intermediaries legislation’ will apply to some of the engagements covered by the Treasury rules, and the Government’s overall assessment is that compliance with this legislation, across the contractor population as a whole, is only one in 10. A separate consultation published on 26 May 2016 proposed moving the responsibility and liability for applying the intermediaries rules from the individual to the public sector engager or agency. The government will announce the outcome of that consultation shortly.
The statement and attachments can be viewed online at:
http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2016-11-14/HCWS252/.
[HCWS252]
(7 years, 9 months ago)
Written StatementsA meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 8 November 2016. EU Finance Ministers are due to discuss the following items:
Ministerial dialogue with the European Free Trade Association
ECOFIN will be preceded by a meeting of EU and EFTA Finance Ministers at which they will discuss issues of investment and economic growth.
Early morning briefing
Ministers will be briefed on outcomes of the 7 November meeting of the Eurogroup and the Commission will present an update on the current economic situation.
Commissioner Margrethe Vestager has been invited to the session to discuss state aid and taxation. Vestager has responsibility for enforcing competition rules in the areas of antitrust, cartels, mergers and state aid.
Building a fair, competitive and stable corporate tax system for the EU
Proposals on: a common corporate tax base; a common consolidated corporate tax base; double taxation dispute resolution mechanisms in the EU; and hybrid mismatches with third countries were published on 25 October 2016. The Commission will give a presentation on its proposals which will be followed by an exchange of views.
Anti-money laundering directive
The presidency will present on the current state of play on the fourth anti-money laundering directive. That will be followed by a ministerial discussion on this topic.
Current financial services legislative proposals
The Council presidency will provide an update on current legislative proposals in the field of financial services.
Statistics
Ministers will be briefed on EU statistics including the 2016 statistical package, the progress made on strengthening co-operation with Eurostat, and the European Statistical Governance Advisory Board report on the implementation of the European statistics code of practice.
Council conclusions will be presented for endorsement by Ministers.
European Court of Auditors’ annual report on the implementation of the 2015 budget
The European Court of Auditors will give a presentation on their annual report on the implementation of the 2015 budget.
Implementation of the banking union
Ministers are to discuss the current state of play on the implementation of the banking union.
Packaged retail and insurance-based investment products (PRIIPs) regulation
The Commission will provide an update on the current state of play in relation to the entry into force of the PRIIPS regulation.
Criteria and process leading to the establishment of the EU list of non-cooperative jurisdictions for tax purposes
Ministers will discuss draft Council conclusions on the criteria and process leading to the establishment of the EU list of non-co-operative jurisdictions for tax purposes.
[HCWS243]
(7 years, 9 months ago)
General CommitteesIt is a great pleasure to serve under your chairmanship for the first time, Ms Buck. I am delighted to have the opportunity to discuss the 2017 annual budget proposal. The debate this year takes place within a context different from those of previous years, given the decision made by the British people to leave the European Union. None the less, today’s motion focuses on the proposed EU annual budget for 2017. The Government are clear that until the UK leaves the EU it remains a full member and is subject to the same rights and responsibilities as other member states. That includes paying into the budget, participating in budgetary discussions and ensuring the best possible deal for the UK taxpayer.
The 2017 payments ceiling is the lowest annual ceiling in the 2014 to 2020 multiannual financial framework deal, showing how the 2013 deal continues to restrict the EU budget. The Commission’s draft proposal was fully consistent with the MFF, with €157.7 billion in commitments and €134.9 billion in payments—a 6.2% reduction in payments on the 2016 budget. The Government have long argued for bigger margins in the annual budget to ensure that the Commission can be responsive to unforeseen events without having to request further funds from member states. The proposal aligns with that aim.
The 2016 deal achieved a margin of €800 million; this year, the Commission proposed a margin of more than €8 billion. The Commission’s 2017 budget proposal includes some notable elements. First, it proposes an overall larger heading “1a” within an overall smaller budget. The increased appropriations go towards a top-up of the European fund for strategic investments, which the UK supports as a way of leveraging EU budget resources effectively, and increases in other programmes.
Secondly, the proposal focuses firmly on supporting measures intended to tackle the migration crisis. Those include a number of internal measures, such as a European border force and coast guard and strengthened border management, and external measures, such as increased assistance to host countries dealing with migration outside the EU and actions to address the root causes of migration.
The Commission’s proposal is, of course, just one part of the overall negotiation. The Council set out its position in September. In Council discussions, the Government continued to argue for budgetary discipline. Working with our like-minded budget disciplinarian allies, we influenced the Council position to agree a further cut of €1.3 billion in commitments and €1.1 billion in payments on top of the Commission’s proposal.
The Commission’s amending letter, published on 17 October, makes some regular adjustments to take account of the most recent information about expenditure and revenue in headings 2 and 5, and takes account of some of the mid-term review proposals. The main changes include commitments for additional measures on migration, such as kick-starting a new partnership framework process with third countries and developing a guarantee fund as part of the external investment plan.
There are several additional commitments in the flagship heading 1a programmes. The Commission proposes borrowing commitments from future years in the MFF in order to fund those commitments, consistent with the overall seven-year MFF ceiling. Proposed payments are still almost 6% lower than in the 2016 budget, and margins of €7.5 billion have been achieved—much higher than what has been achieved in previous years. Moreover, there remains much to negotiate. We will argue that, where relevant, the Council’s suggested cuts in September also apply to the new proposal.
The European Parliament set out its position on 26 October, arguing for a principled reversal of the Council’s cuts and the increasing of the Commission position by €4.8 billion in commitments and €3.1 billion in payments. That is not surprising. Every year, the European Parliament exceeds the Commission’s position, and particularly the Council’s position, by several billion euros. Some member states may support elements of this, but, typically, negotiations conclude with more realism, and often below the Commission’s proposal. The conciliation period for an agreement between the Council, Commission and the European Parliament began on 28 October, with the budget ECOFIN expected on 16 November.
As well as the Commission’s draft budget 2017, a number of related documents have been listed for debate. I shall address them in turn. First, the proposal for the mobilisation of the flexibility instrument, which exists to respond to events and financing needs not foreseen at the start of the seven-year budget period. In the draft 2017 budget, heading 3 was short on commitments to finance measures to manage the migration, refugee and security crisis. The use of the flexibility instrument and contingency margin allows heading 3 to accommodate such extra requirements, while still retaining an overall commitments margin.
The mobilisation of the contingency margin is also appended in the draft budget and amending letter to meet the challenges. The Commission’s proposed mobilisation of the contingency margin this year provides additional commitments totalling €1.1 billion through redeployments from unallocated margin in heading 2 and heading 5, and in addition borrows under €800 million from the following two years. It is therefore simply a mechanism to move money around the seven-year budget.
As we have said in the past, the Government support EU-wide efforts to tackle the migration and refugee crisis from within existing MFF ceilings, and in this case these instruments provide a means of meeting emergency funding requirements without calling on member states for additional resources outside of the MFF ceilings.
A separate document proposes that €50 million in commitments and payments of the European Union solidarity fund, the EUSF, be included as part of the 2017 annual budget. This is standard practice, in accordance with the EUSF regulation as amended in 2014. We support the principles of the EU solidarity fund in providing support when an EU country is seriously affected by a major natural disaster. Mobilisations of the EUSF for specific instances of natural disaster in individual member states require a qualified majority voting decision in Council.
The final position on the annual budget is dependent, as I described earlier, on negotiations, and the outcome will ultimately be decided by qualified majority voting in the Council in agreement with the European Parliament. Today I hope the Committee will support the passing of today’s motion, which gives the Government a mandate to continue to work with like-minded member states in pressing for necessary restraint in the final stages of the 2017 budget negotiations this autumn.
We now have until 5.34 pm for questions to the Minister, should the Committee wish to avail itself of that opportunity. I remind Members that brevity is to be commended.
I see. I thought the Minister preferred them all at once.
I welcome the hon. Gentleman to his position on the Front Bench. I will deal with regional funding and assessments and also his point on the European Union solidarity fund. We are supportive of the principles of the European Union solidarity fund in providing support when an EU country is seriously affected by a major natural disaster. I make the point— it is a general point that may apply to several of his questions—that it is right that the EU prioritises its expenditure in the way that provides the most value for money and achieves the most for the people of the European Union. It is therefore right that through sound financial management, the EU frees up resources so that it can respond to natural disasters, and the solidarity fund is a means by which it is capable of responding.
The hon. Gentleman asked about the impact of Brexit and in particular the applications to regional funding. At this stage, I cannot say much more than the points we have already made about the support that we have provided for measures that have been announced. Essentially, the Government have agreed to guarantee projects entered into before the autumn statement. Anything that is entered into subsequent to the autumn statement but before we leave the European Union will be supported to the extent that it provides value for money and is consistent with the Government’s priorities. On regional assessments, all I can say at this point is that we will take into account the regional impacts when looking at our future position and determining our future priorities.
I have just one more question. In preparing the Government’s statement to the Committee, what conversations have Ministers had with the devolved Administrations—in particular those in Scotland, Northern Ireland and Wales, where issues relating to the EU budget are particularly sensitive?
I am sure that it will not have escaped the hon. Gentleman’s notice that there were several meetings this time last week between the First Ministers of all the devolved Administrations, the Prime Minister and several colleagues, and I met the Finance Ministers on Monday afternoon. There is obviously significant interest from the devolved Administrations in these matters, which were discussed. Where the devolved Administrations sign up to structural investment projects under their current EU budget allocation prior to Brexit, we will ensure that they are funded to meet those commitments. It will be for the devolved Administrations to decide what criteria they use to assess projects, in line with the devolution settlements.
I have three questions, which I will ask together and allow the Minister to deal with together. First, following up on the answer that he has just given about consultation with the devolved Administrations, I did not hear him say specifically what discussion there has been about the EU budget. He has indicated what will happen once the EU budget has been agreed and allocated, but can he clarify what discussions, if any, there were with the devolved Administrations prior to the Government beginning the process of agreeing the 2017 budget?
Secondly, in his explanatory memorandum of 11 July, the Minister did not tell us whether the Government supported the Commission’s proposals. What he has said today implies that the Government supported them at that early stage. Can he confirm that and tell us when the Government came to that position? It seems to me that if it was the Government’s position before 11 July that they would support the Commission’s proposals at the first reading stage, they should have told the European Scrutiny Committee that, so I am interested to know when they reached that position.
Finally, the budget still has to go through a number of further processes. The Minister reminded us that, as often happens, the Council and the European Parliament have different views about what they want in the final budget. It appears from the Minister’s comments that the Government are looking for the Commission’s proposals or less—certainly not any more. Given that there is disagreement with the directly elected European Parliament, will the Minister give a commitment that this will be brought back again and will go through the full scrutiny process, and that any requests of the European Scrutiny Committee will be complied with before the Government commit to supporting either the European Parliament’s proposals or some compromise thereon?
I thank the hon. Gentleman for his questions. The EU budget as a whole is a matter for the United Kingdom and, as I say, there is regular communication. This time last week, I was in discussions with the Finance Ministers of Scotland, Wales and Northern Ireland, and issues relating to EU funding were relevant to those discussions. The position of the United Kingdom in respect of the EU budget is determined by the United Kingdom Government.
On our position on this year’s proposal, let me make it clear that what the Commission proposed is consistent with the seven-year multiannual financial framework, which was agreed in 2013. That was a significant achievement, because it reduced the EU budget for the first time. Some felt that the previous Prime Minister, David Cameron, would not be able to achieve that, but he did. That was consistent with this proposal.
The negotiations are live, so it would not be appropriate for me to give away our position prematurely, because that might reduce our chances of achieving the outcome that we want. The Government’s approach will be the one we have always taken in such circumstances: we will continue to push for maximum budget restraint and value for money to minimise costs for taxpayers. I hope that will have the support of all Committee members.
Scrutiny of the annual budget takes place on the Commission’s proposals. The proposals move very quickly and frequently, so timescales do not allow for a further round of scrutiny. The motion sets out the Government’s overall approach of seeking the best possible value for money, and I hope it has the support of all members of the Committee.
It is a pleasure to serve under your chairmanship, Ms Buck.
I want to follow up on consultation. The Minister outlined the way that the Government are interacting with the Scottish and Welsh Governments, but will he outline what the formal mechanisms are for consultation with the Mayor of London? Clearly, a range of issues relating to our impending departure from the European Union will have a huge consequence for London and, as a direct result of that, will reach right across the United Kingdom. It is only right and proper that the Mayor of London or a suitable representative has a seat at the table.
I suspect that the hon. Gentleman is touching on issues wider than this debate. I suspect that he is not specifically asking about consultations with the Mayor of London on the EU budget proposal for 2017, about which, as far as I am aware, the Mayor of London has not expressed an opinion, but I may be wrong—perhaps I should check that.
On the wider issue of the EU, Brexit and the position of London and its Mayor, all I can say today is that there are regular conversations between the Treasury and the Mayor. Without revealing too much about the diaries of the individuals concerned without their permission, meetings occur, and there is one in the not-too-distant future.
I am grateful for the reply. To bring us back firmly within the scope of the budget, my hon. Friend the Member for Stalybridge and Hyde talked about analysis of the EU budget’s regional impact. Obviously, there are longer-term questions about replacing expenditure that currently benefits the regions and nations of the UK. What plans do the Government have to publish their analysis of the regional benefits and risks presented by Britain’s membership of the European Union, and of the risks presented by leaving the European Union, so that we can have an informed debate? A seemingly endless number of Government debates have been scheduled, but we will have those debates in the dark, as the Government seem reticent about publishing any relevant information about the benefits or risks of the negotiations.
I point out that the Government published a lot of information during the referendum debate. That information was made available to the British people, and I do not want a repeat of that debate. The British people made a decision, though it might not have been the decision that the hon. Gentleman or I campaigned for, and we have to respect that. The Government are looking at various options, so that we can make a success of the decision that the British people have made. There will be different regional implications, one assumes, of the United Kingdom leaving the European Union, but the Government are determined to ensure that this is a success for every part of the United Kingdom, and I am sure that the hon. Gentleman and every member of this Committee supports that.
This is my final question, I promise. I suspect that like me, the Chief Secretary campaigned to remain in the European Union, but accepts the result and now wants to get the best possible deal. As parliamentarians and the general public determine the best possible deal, can we take it that all Treasury documents published prior to the referendum—including all their figures and assumptions—are ones that we should stand by and use to inform the debate?
I fear that the hon. Gentleman wants to take me down a path that is a little way away from the motion in front of us. We are in new circumstances. The determination of the Government is to ensure that we deliver the best possible outcome for the British people in the negotiations with the European Union and in our relationship with the EU and other parts of the world, post-Brexit. That is our focus.
I was going to sit quietly for once, but the questioning has gone along a certain line. May I remind the Chief Secretary to the Treasury that the Chancellor, in front of the Treasury Committee, said that the reports before 23 June no longer applied, because their assumptions were out of date already? We therefore do not have to work on the maxim of gloom and nonsense that came from the Treasury at that point, and can look to the broad sunlit uplands. One thing we can be certain of is that once we leave, we will no longer have to pay into the budget, will not be part of the multiannual financial framework, and will not have to have these debates any more.
As one who was on a different side of the debate earlier this year, let me say that if there was a cloud, there is certainly a silver lining.
Motion made, and Question proposed,
That the Committee takes note of European Union Document No. 10763/16, a Proposed Decision on the mobilisation of the European Union Solidarity Fund to provide for the payment of advances in the general budget of the Union for 2017; No. 10764/16, a Proposed Decision on the mobilisation of the Flexibility Instrument to finance immediate budgetary measures to address the on-going migration, refugee and security crisis; No. 10765/16, a Proposed Decision on the mobilisation of the Contingency Margin in 2017; unnumbered European Document, Statement of estimates of the European Commission for the financial year 2017; supports the Government’s efforts to limit the size of the EU Budget in order to get the best deal for UK taxpayers; welcomes the fact that the 2017 Draft Budget respects the Multi-Annual Financial Framework agreement; further welcomes the reduction in payments in the 2017 Draft Budget compared to the 2016 Budget; and notes that the 2017 Draft Budget achieves a greater margin in payments than in 2016.—(Mr Gauke.)
I thank members of the European Scrutiny Committee for selecting the documents for debate. EU budget negotiations are a challenging process. The budget will ultimately be decided by a qualified majority in the European Council, in agreement with the European Parliament. That said, I am pleased to say that the Commission’s proposals are fully consistent with the multiannual financial framework, and achieve a much higher payment margin than they did in previous years.
I disagree with the hon. Member for Glenrothes, who characterised the debate as us siding with the Commission as opposed to the Parliament, and says that that is somehow undemocratic. The true democratic voice in the European Union is that of the European Council; it is made up of member states’ Governments, which are, after all, the institutions responsible for collecting taxes, and which are held to account by their public.
I am pleased to say that the Council has, in recent years, looked for greater fiscal discipline, and has supported measures that have resulted in the MFF being lower in this seven-year period than in the previous one. The British Government have made it clear that we support that, and we look to ensure fiscal constraint. The fact that the European Parliament takes a different view does not give it a greater mandate and allow it to overrule the position of member states’ Governments, and the British Government’s position has been made clear to Parliament.
We are committed to keeping the European Scrutiny Committee updated as the proposals evolve. In my opening speech, I highlighted the European Parliament’s position, which is publicly available, and we will shortly submit a further explanatory memorandum on the updated Commission proposal. A deal is often struck at short notice. It has been known to be done rather late at night—I have personal experience of that. As I said earlier, the budget ECOFIN is scheduled for 16 November.
As for our priorities for future spending, I have made clear what we are doing about providing guarantees for future funding. However, we will want to take our own decisions on spending once we have left the European Union. We are consulting closely with interested parties in considering what future spending priorities will look like, but the British people have made a decision and, on this spending, we are taking back control, to coin a phrase.
While we remain in the European Union, we will continue to champion the need for an efficient EU budget that provides good value for the UK taxpayer, and press firmly to ensure fiscal discipline by limiting budget size to deliver the MFF deal. In doing so we will work with like-minded allies to deliver the best EU budget deal possible within the parameters of the negotiation. We will, of course, keep members of the Committee updated, as I said. I welcome their continued interest in this important issue.
Question put and agreed to.
(7 years, 10 months ago)
Written StatementsA meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg on 11 October 2016. The Government are committed to leaving the European Union; in the interim, they continue to participate fully in ECOFIN meetings. EU Finance Ministers discussed the following items:
Opening session
Ministers were briefed on the outcomes of the 10 October meeting of the Eurogroup and the Commission presented an update on the current economic situation. Ministers also discussed issues relating to the improvement and implementation of the stability and growth pact and Commission proposals for a European fund for sustainable development.
Current financial services legislative proposals
The Council presidency provided an update on current legislative proposals in the field of financial services.
Fight against fraud
The Council presidency and Commission delivered information on VAT-related aspects of the draft directive on the fight against fraud affecting the Union’s financial interests by means of criminal law (PIF directive).
Banking union
Ministers discussed the current state of play regarding implementation of banking union within the eurozone.
G20 and IMF meetings
Council followed up on the G20 and IMF meetings which took place in Washington on 6 to 9 October 2016. The presidency and Commission provided information on the outcomes including; continuing the work on resilience and sustainability, continuing the work on tax avoidance and tax evasion and considering issues around the digitalisation of financial services.
Climate finance
Ministers discussed preparations for the 22nd conference of parties to the United Nations framework convention on climate change (UNFCCC) (Marrakesh, 7 to 18 November 2016), and agreed draft European Council conclusions.
European semester 2016—lessons learnt
Ministers exchanged views on key challenges, lessons learnt and the way forward for the European semester.
Joint report on health systems and fiscal sustainability
A presentation was given by the Commission on the joint Commission-EPC report of the health systems and fiscal sustainability. This was followed by an exchange of views.
Other business—the Basel Committee’s banking reform agenda
The Commission provided an update on the state of play in ongoing Basel negotiations.
[HCWS222]
(7 years, 10 months ago)
Written StatementsThe UK Guarantees scheme was announced in July 2012 with spending cover provided through the Infrastructure (Financial Assistance) Act 2012, receiving Royal Assent on 31 October 2012. The scheme provides a sovereign-backed guarantee to help infrastructure projects raise debt finance. Guarantees for up to £40 billion in aggregate can be offered under the initiative.
As part of the Hinkley Point C negotiations, EDF sought a Government guarantee to assist in bringing forward investment. The Government are confirming that they have approved the provision of a guarantee for up to £2 billion to the project for the construction of its new EPR nuclear plant in Somerset, backed by commitments from the shareholders. The guarantee will be available from 2018 to 2020 if necessary conditions are met and is at Government’s discretion. Even if made available, and EDF have indicated to the Secretary of State for Business, Energy and Industrial Strategy that it is not their current intention to take up the guarantee, I judge the likelihood of any call under the guarantee to be very low.
The Government will report to Parliament on the financial assistance given in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012.
[HCWS216]
(7 years, 10 months ago)
Commons ChamberThe Government have taken steps to maintain a world-class business environment that helps UK manufacturers to thrive. That is why we have cut corporation tax from 28% to 20%— it will fall further, to 17%—and why we have supported £22 billion of research and development through tax credits for UK companies. This environment helps our manufacturers to grow as innovative, competitive companies.
I welcome the Minister’s response, but what message is he sending to international manufacturing companies with operations in Britain about this country’s future international competitiveness as we leave the European Union?
Manufacturing depends on long-term investment. What assessment has the Minister made of the impact of our potentially leaving the European Investment Bank, and what progress has there been in any discussions about us maintaining our stake?
Does my right hon. Friend agree that reducing anti-competitive market distortions is both a great fiscal way to promote manufacturing and a way of ensuring our country is best placed for new trade deals?
Apart from lowering corporation tax what other steps will the Chancellor and his ministerial team take to incentivise manufacturing industry in Northern Ireland?
The freedom for Northern Ireland to set its corporation tax rate is an important measure in itself. We look forward to further progress on that. Of course, there will be an autumn statement next month in which the Government will set out their economic policy. I have mentioned corporation tax and R and D tax credits, which we have made more generous. Those measures will have helped manufacturing businesses in Northern Ireland and elsewhere.
I welcome the Government’s ongoing commitment to the northern powerhouse given the impact that that can have on manufacturing, in particular in my constituency, and the allocated funds for the A64 at Hopgrove. Does the Minister agree that such investments must seek maximum economic benefit? The current proposal from Highways England will simply kick an existing pinch point down the road if we do not see the dualling of that carriageway on the A64.
Last month, the Chancellor proudly dismissed his predecessor’s plans to cut corporation tax to 15%. This week, however, we hear of plans hatched by senior Government figures to cut corporation tax as low as 10% as part of a so-called Brexit nuclear option, despite the fact that both the British Chambers of Commerce and the Institute of Directors have stated that cutting corporation tax would not be at the top of their wishlist. Will the Minister put an end to his Government’s reign of chaos and confirm his long-term position on corporation tax, so that businesses have the stability they deserve?
I am not sure whether I would use the phrase “reign of chaos” if I was a Labour Front Bencher. Let me be very clear. The UK Government have rightly reduced corporation tax from 28% to 20%. We have legislated for it to go down to 17%. If there are any further announcements they will be at a fiscal event, whether an autumn statement or a Budget.
I am afraid that the Government chaos we have seen on corporation tax is sadly replicated on investment. The Chancellor promised to tear up his predecessor’s Budget and develop an industrial strategy, before denying he was planning a spending splurge. A recent Ipsos MORI poll showed that almost two thirds of Britons agree that the country is not doing enough to meet its infrastructure needs, and the Opposition agree. Will the Minister end his Government’s chaotic record on investment and confirm how much he plans to invest in infrastructure, on what, and where he will get the money from?
On the subject of corporation tax, I point out that it was not that many months ago that on one day the shadow Chancellor condemned the reduction to 17% while in Committee the Labour party voted for it. I will be clear that it is no good coming forward with incredible plans to spend £500 billion on infrastructure without any idea of how those plans will be paid for. The Chancellor will make a statement on 23 November on our policy on this issue. The Labour party really needs to change track if it is to have some credibility.
The £4.4 billion priority school building programme was established to rebuild or refurbish those school buildings in the very worst condition across the country. The programme’s second phase was announced in May 2014 and feasibility studies are now being carried out. In addition, we are allocating £4.2 billion across 2015 to 2018 to schools, local authorities, academy trusts and voluntary aided partnerships to maintain and improve their schools.
I thank my right hon. Friend for his reply. For many years now, Todmorden High School in Calder Valley has been the top priority for a rebuild. It is currently taking a good chunk of maintenance money from other schools just to stay open. Will my right hon. Friend look at this carefully, so that we can finally give the pupils of Todmorden high school the school they deserve?
I understand my hon. Friend’s disappointment, and that of his constituents, that Todmorden was not successful in its application to the priority school building programme. We need to prioritise schools with blocks in the very worst condition. I understand that Todmorden’s buildings are now receiving some investment through the local authority, which will have competing priorities for capital resources, but I am sure my hon. Friend will continue to make the case for the school.
Given the £180 million overrun on phase one, will the Government be tempted to backfill with second-rate private finance initiative buildings? What role will PFI have in the programme?
Let me address our record. We have spent £18 billion since 2010 on the school estate and we are committed to a further £23 billion so that pupils can be taught in facilities that are fit for the 21st century. We of course want to ensure that that is funded in the most appropriate, value for money and sustainable way.
The Office for Budget Responsibility is responsible for forecasting contributions to the European Union. It will update its forecast in this year’s autumn statement, but the forecast for the UK’s gross contribution in 2017-18 was £12.6 billion at the time of the Budget.
Notwithstanding all the spending pledges that have been made today and recently, hospitals, schools, police and roads in my constituency certainly need a spending boost. Does the Minister agree that the sooner we leave the European Union, the sooner that money will be available to them?
The amount of any money saved will depend on the overall fiscal situation and the broader economic environment. Decisions on spending will be made in the round in autumn statements and Budgets, but while we remain members of the European Union, we must of course comply with the requirements to pay into it.
May I press the Chief Secretary on this point? On the day of the referendum, I met an NHS worker who had voted to leave the European Union precisely because she thought that more money would be available for the NHS, thanks to the “£350 million a week” that was emblazoned on the Vote Leave bus. When we leave the European Union, will we get that money?
I appreciate that getting back some of our EU contribution was a factor in the decision to leave the European Union, but will my right hon. Friend confirm that the Government are, at least at this stage, open to the idea of making some contribution in the future if we are to secure some sort of access to the single market for financial services, or, indeed, making some contribution in relation to passporting and equivalence?
What is important is for the United Kingdom to secure the best possible deal in our negotiations with the European Union. I do not think that it makes sense to bind our hands and close down options at this point; nor do I think it right for us to provide a running commentary on the matter.
Wales will continue to receive convergence funding while we are in the EU, but will the Treasury nevertheless honour the Prime Minister’s pledge to electrify the Great Western Railway line all the way to Swansea in order to make it part of the pan-European network and stimulate manufacturing and exports?
No UK taxpayers’ money has been used in the EU’s lending to other member states. Only in the event of default would the UK be asked to pay its share.
What impact has the Secretary of State made of his predecessor’s austerity economics on the nation’s prosperity and would he like to apologise for that divisive and discredited ideology?
In light of the upcoming report of the RBS’s Global Restructuring Group and given that past systems of redress for small businesses have been ad hoc and have failed, will the Chancellor meet the all-party group for fair business banking to see whether we can involve a permanent and effective system of redress?
(7 years, 10 months ago)
Written StatementsHM Treasury has today provided a further report to Parliament in relation to the bilateral loan to Ireland as required under the Loans to Ireland Act 2010. The report relates to the period from 1 April 2016 to 30 September 2016.
A written ministerial statement on the previous statutory report regarding the loan to Ireland was issued to Parliament on 26 April 2016, Official Report, column 36WS.
[HCWS188]
(7 years, 10 months ago)
Written StatementsA meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Luxembourg on 11 October 2016. The Government are committed to leaving the European Union; in the interim, they continue to participate fully in ECOFIN meetings. EU Finance Ministers are due to discuss the following items:
Opening session
Ministers will be briefed on outcomes of the 10 October meeting of the Eurogroup and the Commission will present an update on the current economic situation. Ministers will also discuss issues relating to the improvement and implementation of the stability and growth pact (SGP), hold an exchange of views on proposals for a European fund for sustainable development (EFSD), and hear a presentation from the European systemic risk board (ESRB) on the residential real estate sector.
Current financial services legislative proposals
The Council presidency will provide an update on current legislative proposals in the field of financial services.
Fight against fraud
The Council presidency and Commission will provide information on VAT-related aspects of the draft directive on the fight against fraud affecting the Union’s financial interests by means of criminal law—PIF directive.
Banking union
Ministers are to discuss the current state of play on the implementation of banking union within the eurozone.
G20 and IMF meetings
Council will follow up on the G20 and IMF meetings which took place in Washington on 6-9 October 2016. The presidency and Commission will provide information on the outcomes.
Climate finance
Ministers will discuss preparations for the 22nd conference of parties to the United Nations framework convention on climate change—UNFCCC—in Marrakesh, 7-18 November 2016, including adoption of draft European Council conclusions.
European semester 2016—lessons learnt
Ministers will exchange views on key challenges and lessons learnt and the way forward for the European semester.
Joint report on health systems and fiscal sustainability
A presentation will be given by the Commission on the joint Commission-EPC report of the health systems and fiscal sustainability. This will be followed by an exchange of views.
Other business—the Basel Committee’s banking reform agenda
The Commission will provide an update on the state of play in ongoing Basel negotiations.
[HCWS177]
(7 years, 10 months ago)
Written StatementsToday, the UK completed the signing of a new bilateral loan commitment to the International Monetary Fund (IMF), valued at 9,178.2 million SDRs, equivalent to £10.278 million using exchange rates on 7 October 2016. This bilateral loan replaces one of the same value, which came into effect in February 2016 (HCWS542). UK lending to the IMF remains within the limit set by the International Monetary Fund (Limit on Lending) Order 2010, which came into force on 22 July 2010.
The new loan is part of a global initiative to ensure that the IMF is well-resourced. It is vital at this time that we have an IMF equipped to strengthen the resilience of the global economy against risks and uncertainty. The UK is one of the first countries to sign a new bilateral loan with the IMF, maintaining its leading role within international institutions and in the world economy.
The SDR is the unit of account used by the IMF. Its value is calculated daily as a weighted average of the US dollar, euro, renminbi, yen, and pound sterling.
[HCWS173]
(7 years, 11 months ago)
Written StatementsAhead of the introduction of tax-free childcare in early 2017 and the 30 hours extended entitlement for three and four-year-olds in September 2017, HM Revenue and Customs (HMRC) will trial a new, digital, joint childcare service later this year. The trial will involve around 1500 parents, including some who are eligible for both schemes. It will enable HMRC to extensively test the system and ensure it provides a smooth experience and quality service for parents.
Tax-free childcare and the extended free entitlement are a key part of the Government’s overall childcare offer which will provide over £6 billion per annum to working families and those on low incomes by the end of this Parliament.
The Government announced in November 2015 that parents will be able to apply online for both tax-free childcare and the extended free entitlement through a new joint childcare service being developed by HMRC, with their delivery partner National Savings & Investments (NS&I).
The joint childcare service will provide a simple and straightforward way for working parents to access both schemes, avoiding the need to provide the same information twice, and saving them valuable time.
In March 2016, the Government announced that tax-free childcare will be introduced and gradually rolled out during 2017. The service will be made available to all eligible families by the end of that year.
[HCWS160]