Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 11th September 2018 Commons Chamber

[Mohammad Yasin (Bedford) (Lab)]

3. What recent discussions he has had with the Secretary of State for Health and Social Care on NHS funding.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We have regular meetings with the Health Secretary and have recently allocated an additional fund of a 3.4% rise per year to the national health service, which will equate to £20 billion by 2023.

[Mohammad Yasin]

In Bedfordshire, children with mental health issues are travelling up to 100 miles to access services. Their recovery is hugely compromised by sending them away from their families and friends. Will the Chancellor now commit funds to local specialist facilities for young people and reinstate the mental health beds in Bedford that his Government took away?

[Elizabeth Truss]

We recognise that there is increasing demand for the NHS, which is precisely why we have allocated the additional funding, and the Health Secretary will shortly publish a 10-year plan with mental health as one strand of it.

[Sir Desmond Swayne (New Forest West) (Con)]

Is it reasonable for me to expect to pass my assets and property to my heirs unencumbered and intact and at the same time to expect the taxpayer to pay for my social care?

[Elizabeth Truss]

We recognise that social care is an area where reform is needed, and my right hon. Friend the Health Secretary will shortly publish a Green Paper to outline some of the options and to make sure we have a proper discussion as a country about the future of social care.

[Ruth George (High Peak) (Lab)]

My clinical commissioning group in north Derbyshire has seen an uplift of only 1% over the five-year funding settlement from 2016-17, resulting in a deficit of £51 million to find this year in cuts and of £71 million next year. It is having to cut everything that it is not statutorily required to provide, including all voluntary services. Will the Chancellor look at the funding that has gone to the national health service over the past six years to make sure this can be met?

[Elizabeth Truss]

No doubt, the hon. Lady will welcome the additional money allocated to the NHS to reflect the increasing demand. I point out that under the plans proposed by the Labour party, which would mean fewer businesses, fewer jobs and less tax revenue, there would be less money going into the NHS and the hon. Lady’s local services.

[Nigel Huddleston (Mid Worcestershire) (Con)]

There is strong public appetite for increased spending not only on the NHS, but on education, defence and a whole host of other areas, and, if the polls and all the petitions are to be believed, there is a strong public appetite to pay more tax in order to finance those spending increases. Will the Minister bear that in mind in the upcoming Budget?

[Elizabeth Truss]

I am sure my hon. Friend will recognise that we are not going to announce the contents of the Budget at today’s Treasury questions, but I point out that we are a Government who believe in low taxes: we have reduced taxes on basic rate taxpayers by £1,000. Of course, as well as putting that extra money into the NHS, my job as Chief Secretary is to make sure we get value for money from every penny we spend, and that is why we are developing a 10-year plan. We are improving the use of technology and we are getting better value for money from the drugs budget as well.

[Peter Dowd (Bootle) (Lab)]

Is the Chief Secretary aware in the discussions the Health Secretary may have had on NHS funding whether he mentioned his unilateral plan to ditch the 2013 pensions deal agreed with representative bodies, which was supposed to last for 25 years, and which may affect 1 million NHS staff?

[Elizabeth Truss]

What I am aware of is the deal that has been done with NHS workers to give them a 6.5% pay rise in exchange for reform over the next three years. We know that on average public sector workers get approximately 10% more in terms of pensions than their private sector counterparts, but we are also making sure that we have the right wages to recruit and retain people in the NHS.

[Peter Dowd]

Clearly, the Chief Secretary to the Treasury does not even know what she has put out in her name. The pension changes snuck out on Thursday evening could negatively affect the pensions of a further 4 million public sector workers—[Interruption.] No, that is not the case. So I ask on behalf of those dedicated public sector workers—nurses, doctors, social workers, teachers, support staff and refuse collectors—will the Chancellor withdraw these snidey proposals and honour his predecessor’s deal? Is that too much to ask? Or will millions of staff in the public sector be let down and betrayed yet again by this Government?

[Elizabeth Truss]

I think the Labour party has misunderstood the announcement we made last week, which will actually ensure that more money goes into public sector pensions, in line with the deal that we did with the unions previously.

[Danielle Rowley (Midlothian) (Lab)]

4. What plans he has to tackle household debt.

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[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

8. Whether he has made an assessment of the adequacy of his Department's cross-departmental guidance on the contracting out of public services as a result of recent disturbances in prisons.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

Guidance on contracting out public services is set by the Cabinet Office, and my right hon. Friend the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office has reviewed the guidance thoroughly.

[Vicky Foxcroft]

Appropriate transitions from prisons to the community are central in successfully reintegrating prisoners into society and bringing down reoffending rates, yet it is my understanding that some prisoners are being prevented from moving from category C to category D as they near their release date. Could the Minister confirm whether that is the case, and whether that is just another example of ineffective cost-saving measures?

[Elizabeth Truss]

My right hon. Friend the Justice Secretary recently released a strategy about how we are going to get more offenders into employment. We have a cross-Government working group on that, to ensure that people make the appropriate transition. I suggest that the hon. Lady speak to the Justice Department to get further details.

--- Later in debate ---

[Wes Streeting (Ilford North) (Lab)]

T2. London’s Mayor Sadiq Khan is investing in frontline policing, but like police and crime commissioners across the country, he is swimming against the tide of deep Government cuts, which is why violent crime in the last three years has doubled in Essex, in Cambridgeshire, in Warwickshire, in Hampshire and in Norfolk—the Tory shires. Is it not time for the Government to accept that they need to refocus on cutting crime, not police, particularly in the light of the damning report from the National Audit Office today?

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We have protected the police budget in real terms since 2015. Is it not time that the London Mayor started taking responsibility for what is happening in the city that he is meant to be leading? When it comes to Crossrail and crime, he is not taking responsibility, and he needs to stop passing the buck.

[Peter Aldous (Waveney) (Con)]

T7. Last week, the East of England all-party parliamentary group launched its Budget submission, prepared in conjunction with business and local government. Does my right hon. Friend recognise the region’s enormous economic potential, and will she work with us to unlock it?

[Elizabeth Truss]

I was delighted to visit my hon. Friend and see the booming businesses in Lowestoft and St. Peter’s Brewery, which is exporting around the world, and Baron Bigod, which I think has the only raw milk vending machine in the whole of the UK. We will look closely at his submission and continue to invest in this vital part of the country.

[Mike Amesbury (Weaver Vale) (Lab)]

T3. With frontline police officers cut by over 22,000 since 2010 and police forces such as mine in Cheshire having their budgets slashed by a massive £56 million—that is a fact—surely the National Audit Office report exposing the crisis in funding for our police service is a wake-up call to the Treasury.

[Elizabeth Truss]

We have protected police budgets in real terms since 2015. Of course, the nature of crime is changing, and police forces across the country have to adjust to that. We also recently announced a 2% pay rise for frontline police officers.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

T4. Anyone who attended the Unison briefing this morning will know how worried local authority workers are about the impact of austerity on the services that they provide. Can the Chancellor reassure them that they will see in his next Budget a level of money that means we do not see many more authorities facing the catastrophe that Northamptonshire has had and that we have all witnessed this year?

[Elizabeth Truss]

When the Conservatives came into government in 2010, the vast majority of money spent locally was raised centrally, damaging accountability. We have now switched that around, and more money—the vast majority of it—is being raised locally. Of course, we have recently given councils more power to raise council tax, to meet growing demand in areas such as social care and children’s services, and we will continue to look at that.

[Vicky Ford (Chelmsford) (Con)]

This summer, we saw the devastation of the collapse of an elevated roadway in Italy. In Chelmsford, the main route into the city is over the Army and Navy flyover, which is now 40 years old. I am not suggesting that it is on the brink of an Italian disaster, but it will need replacing. What funds might be available to assist?

--- Later in debate ---

[Elizabeth Truss]

I find it astonishing that no Opposition Member is prepared to congratulate the Government on the announcement of the £20 billion that we are putting into the NHS because of increasing demand.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Chancellor has been an outspoken advocate of a fairer distribution of regional spending. Has he read the letter that we sent him in late July? Will he commit to the Transport for the North strategic investment priorities in his forthcoming Budget?

[Laura Smith (Crewe and Nantwich) (Lab)]

This is further to the points raised by my hon. Friends the Members for Ilford North (Wes Streeting) and for Weaver Vale (Mike Amesbury). In the light of the National Audit Office’s recent comments that there are signs that police forces are struggling to deliver effective services and that the Government do not know whether the police system is financially sustainable, what real reassurance can the Chancellor give me that police forces will be given a real increase in funding, so that they can cope with growing demand?

[Elizabeth Truss]

Police force funding has been protected in real terms. The nature of crime is changing, and police forces are reforming to reflect that.

[Tom Pursglove (Corby) (Con)]

Corby and East Northamptonshire are seeing considerable housing growth, and it is essential that the infrastructure keeps pace, so will my right hon. Friend consider a new round of enterprise zone bidding opportunities to support more growth and jobs?

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[Kirstene Hair (Angus) (Con)]

Region deals are an excellent example of Scotland’s two Governments working together to make it a better place in which to live and work. Will my right hon. Friend outline the progress she has made with the Scottish Government to ensure that constituencies such as Angus benefit as much as cities?

[Elizabeth Truss]

My hon. Friend is right: we have seen a number of beneficial city deals in Scotland, and we have devoted £1 billion to them. I am delighted that we are making progress on the Tay cities deal; I will be visiting the Tay cities very soon to have further discussions.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

A recent Treasury Committee report on household finances found that arrears to local authorities are growing, and there is an overzealous pursuit of those arrears by bailiffs. The same goes for some central Government Departments. What will the Treasury do urgently to ensure that people are not penalised, and vulnerable households are not criminalised, by the Government?

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

In March, the Government postponed the closure of the childcare voucher scheme to new entrants to 4 October, during the forthcoming parliamentary recess, reflecting concerns about its impact on low-income families in particular. With the closure now imminent, what work have the Government done to assess the impact on low-income families?

[Elizabeth Truss]

The issue with the current childcare vouchers scheme is that only people whose employers sign up to the scheme are eligible. Under tax-free childcare, everybody will be eligible, regardless of whether they are self-employed or working for an employer. We wanted a bit more time to transition from one scheme to the other. Tax-free childcare is now up and running, and we are ready to transition to that system.

[Several hon. Members rose—]

Public Service Pension Schemes: Quadrennial Valuations

Elizabeth Truss Excerpts

Thursday 6th September 2018 Written Statements

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We undertake valuations of the public service pension schemes every four years. This is the first time that a full assessment of the pension schemes has been undertaken since the Government introduced reformed schemes in 2015. The reform of the schemes addressed the rising cost of pensions, rebalancing taxpayer and member costs to ensure that public pensions were put on to an affordable and sustainable footing. The valuations are important as they ensure that the full costs of the schemes are understood and fully recognised by Government.

Today I am publishing a document that sets out how the valuations are to be conducted this year. The document sets a range of assumptions that Departments and the Scottish and Welsh Governments must use in finalising their valuations of public service pension schemes. Our initial results show that the protections in the new cost cap mechanism mean public sector workers will get improved pension benefits for employment over the period April 2019 to March 2023. This test, known as the cost control mechanism, was introduced to offer taxpayers and employees protection from unexpected changes in pension costs. Where the value of the pension scheme to employees has changed from the levels set when reformed pension schemes were introduced in 2015, steps must be taken to return costs to that level.

There are currently more than 5 million active members of the public service pensions schemes, which cover the NHS, teachers, the armed forces, the police, firefighters, local government workers, judiciary and civil servants. The outcome of the valuations and the cost control mechanism will be confirmed later this year. Secretaries of State, and Scottish and Welsh Ministers, will then consult the appropriate scheme advisory board, which consist of member and employer representatives for each of the pension schemes, to reach agreement on the steps to be taken to return costs to their target level. Where it is not possible to reach agreement, the legislation provides that remedy will be delivered by increasing the rate at which pension benefits accrue. Changes will be implemented with effect from April 2019. An additional process operates in the Local Government Pension Scheme (LGPS) (England and Wales) run by the LGPS England and Wales Scheme Advisory Board. In accordance with stated policy, this will be allowed to complete before the HM Treasury cost control mechanism is tested.

We committed to keep the cost control mechanism under review. I will therefore be asking the Government Actuary to undertake a review of the mechanism to check whether it is working as intended and delivering the Government’s objective to protect taxpayers and workers from unforeseen changes in pension costs. We are committed to fairly remunerating public sector workers and to implementing the results of the valuations, but it is right that we examine whether the mechanism is operating appropriately and in line with the original policy intentions. The scope of the review will be limited to the design of the cost cap mechanism. The review will conclude in time for the next four-yearly round of valuations.

In addition, early indications are that the amount employers pay towards the schemes will need to increase. This is because of proposed changes to the discount rate, which is used to assess the current cost of future payments from the schemes, to reflect the Office for Budget Responsibility’s long-term growth forecasts. Further details will be known later this year. Some increase in costs was anticipated at Budget 2016, which Departments and the devolved Administrations will need to meet in full. The Treasury will be supporting Departments with any unforeseen costs for 2019-20. Further discussions will be taken forward as part of the spending review.

The document is being published in draft form to allow employee representatives, public service employers and Departments time to comment. Decisions will be confirmed later in the autumn, following statutory consultation with the Government Actuary.

[HCWS945]

HM Government’s Guarantee

Elizabeth Truss Excerpts

Tuesday 24th July 2018 Written Statements

[The Chief Secretary to the Treasury (Elizabeth Truss)]

In 2016, the Government guaranteed funding for UK organisations in receipt of EU funds where projects are agreed before the day the UK leaves the EU. The guarantee is designed to apply in the event that the EU does not meet its financial obligations after EU exit and provide assurance to current UK participants in EU programmes or those considering bids for EU funds prior to exit.

The Government are continuing to work towards a deal with the EU and under the terms of the implementation period the UK will continue to participate in the programmes financed by the current EU budget until their closure. As a consequence, the Treasury is extending the Government’s guarantee of EU funding to underwrite the UK’s allocation for structural and investment fund projects under this EU budget period to 2020. The Treasury is also guaranteeing funding in the event of a no deal for UK organisations which bid directly to the European Commission so that they can continue competing for, and securing, funding until the end of 2020. This ensures that UK organisations, such as charities, businesses and universities, will continue to receive funding over a project’s lifetime if they successfully bid into EU-funded programmes before December 2020. In addition to this guarantee, the Government will establish a UK shared prosperity fund. The fund will tackle inequalities between communities by raising productivity, especially in those parts of our country whose economies are furthest behind. A departmental minute providing full details of the liabilities associated with this announcement has been laid in the House of Commons.

[HCWS926]

Public Sector Pay

Elizabeth Truss Excerpts

Tuesday 24th July 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

(Urgent Question): To ask the Chief Secretary to the Treasury if she will make a statement on the public sector pay announcement.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

I am delighted to have this opportunity to discuss today’s announcements of public sector pay rises.

Last September, I informed the House that we would scrap the cap, and now we are delivering on that commitment. What we are announcing today amounts to the biggest pay rise in almost 10 years for about 1 million public workers across Britain, including teachers, armed forces personnel, prison officers, police, doctors and dentists. This comes on top of the positive news we were able to announce in March that 1 million nurses, midwives, porters and other NHS staff would receive a 6.5% pay rise over three years. That deal was a benchmark example of where high pay awards are agreed in return for modernisation of terms and conditions.

We were able to announce these pay rises thanks only to the hard work of the British people, which has brought down the deficit by over three quarters and allowed us to reach the point where the debt will begin to fall this year. We did not listen to the siren calls from the Opposition for damaging splurges, and that is why today we are able to scrap the cap and increase public sector pay. These new pay deals represent what this Government are about. They are affordable and responsible, while making sure that we continue to provide the public with world-class public services. They also reward our hard-working public servants.

It is great, on the final day of this Session of Parliament, that we are able to give every person who works in the public sector positive news on which to enjoy their summer.

[Peter Dowd]

These uninhabited proposals will do nothing to repair the damage done to our brilliant public sector workers by this Government’s slash-and-burn policy in relation to public sector pay. Over the past seven years, our teachers have lost £2,500, our firefighters £3,000, our prison officers £4,000 and our paramedics £4,000 in real-terms pay cuts. Even the armed forces have been affected by this stingy Government.

Yet the Government think it is enough to announce to the press—to the press, Mr Speaker, yet again—an uncosted proposal that will, at best, leave workers just about breaking even on their austerity-slashed pay, while civil servants and others continue to see their pay cut. This is a mendacious PR exercise. Based on today’s announcement, after eight years of real-terms pay cuts for employees in the public sector, our police officers, junior doctors, some specialist doctors, GPs and dentists are all being offered a further real-terms pay cut.

Will the Minister now confirm what the additional cost of each announcement is to Departments? Will she also confirm that this cost is being siphoned from existing departmental spend, with no new money made available? This will have a disastrous effect on Departments already close to ruin from austerity; they will be forced to cut staffing levels and services to cope. Can she guarantee that there will be no reductions in staffing levels across the public sector because of this unfunded increase in pay? Can she guarantee that public services will not be adversely affected by her failure to provide proper funding? Will she explain why civil servants continue to see real-terms pay cuts? They are always at the back of the queue when it comes to pay. How much additional social security expenditure has resulted from seven years of cuts to public sector workers’ pay? Does she agree that it has been this Conservative Government’s policy for the past seven years to force thousands of public servants on to social security by cutting their income?

The Conservative party should be ashamed. The Government’s announcements today leave public sector workers treading water. These proposals will force threadbare Departments to make further cuts to vital services and to reduce staffing levels, and what for? All so that the Prime Minister can get a cheap PR hit to try to cling on to power. We do not buy it. Labour demands that public sector workers get the pay that they deserve.

[Elizabeth Truss]

Yet again, we hear from a Labour Front Bencher not a positive welcome of the news today, which will mean hundreds of pounds more in the pay packets of public sector workers, but yet more complaints and no solutions.

We have scrapped the cap, and we are making sure that public sector workers get a decent pay rise. Let me tell the House what that will mean for workers in the public sector. For teachers earning under £35,000, it will mean a 3.5% pay rise, earning them an extra £800 a year. Police will see a 2% rise, with the average police constable on a £38,000 salary seeing a £760 pay rise. Prison officers will see a 2% rise and a 0.75% bonus, with extra for those who are new recruits. Junior doctors will get at least a 2% pay rise, and the hard-working people in our armed forces will receive a 2% pay rise and an additional 0.9% bonus, to reflect the brilliant work they do for our country.

The hon. Gentleman asks me how these pay rises are funded. Unlike the profligate Labour party, we have worked to support every Department to ensure that these pay rises are affordable within their budgets. In the case of the Department for Education—[Interruption.] The hon. Gentleman asked me the question. Does he want to hear the answer or not? [Interruption.] He obviously does not.

[Mr Speaker]

Order. I think the hon. Member for West Ham (Lyn Brown) is the author of a newly published book entitled “Summer Rage”, but if I may say so, the launch party can wait until after today.

[Elizabeth Truss]

I was diligently trying to answer the hon. Gentleman’s question, and I hope that he will listen to the answer.

We will be allocating a further £500 million from central Department for Education budgets to schools, to make sure they are able to give these pay rises to our hard-working teachers. In every other case, Departments have been able to find savings in their central budgets to make sure those pay rises are affordable. It is a bit rich getting lectures from the Labour party about affordability when its purported policy, along with overthrowing capitalism and making business the enemy, is to create a run on the pound. I do not know whether the hon. Gentleman can explain how his party could afford public sector pay rises with a run on the pound, but I would like to hear his answer.

The pay rises we are announcing today represent the highest pay rises for almost a decade for public sector workers. We have been able to achieve them because of our management of the economy, because we have seen employment reach a record level and because we are spending less in areas such as welfare, whereas people under the Labour Government were left on the scrapheap. Please can the Labour party welcome the fact that public sector workers are getting a pay rise and that we have scrapped the cap, rather than continuing with their usual Eeyorish nonsense?

[Rachel Maclean (Redditch) (Con)]

Like my right hon. Friend, I am rather surprised to hear the noise from the Opposition Benches. If we were to follow the policies of the right hon. Member for Hayes and Harlington (John McDonnell), we would see inflation of 1,000,000%, such as they have in Venezuela—a country that he suggests we all follow the example of. I welcome the pay rises that we will see for teachers in my schools in Redditch. Can my right hon. Friend tell me again how much teachers will receive, and can she emphasise the fact that those on the lowest incomes will receive the most?

[Elizabeth Truss]

My hon. Friend is right; teachers on the lowest incomes will receive the largest rises. All teachers earning less than £35,000 will receive a 3.5% pay rise, and the Secretary of State for Education is making sure that schools have the money to afford that. Teachers in the upper pay range will receive a 2% pay rise.

[Chris Stephens (Glasgow South West) (SNP)]

The key test of whether the public sector pay cap has been removed is how the Government treat their own civil servants. Can the Chief Secretary to the Treasury confirm that each UK Department was given funding for a 1% increase in civil service pay? Can she confirm that the pay remit guidance issued by the Cabinet Office for civil service pay allows pay rises of 1% to 1.5%? Can she tell us what pay rises civil servants who are not covered by a pay review body can expect this year? Finally, will the 220 Ministry of Defence staff in Scotland who are not being paid the living wage finally get £8.75 an hour?

[Elizabeth Truss]

My right hon. Friend the Minister for the Cabinet Office has made the decision to award civil servants a 1.5% pay rise. That represents an increase on previous years, but we need to make sure that all public sector pay awards are affordable within Government budgets and that we are able to recruit and retain the highest possible quality civil servants.

[Several hon. Members rose—]

[David Morris (Morecambe and Lunesdale) (Con)]

The public sector workers in Morecambe and Lunesdale will welcome this announcement. Can my right hon. Friend confirm that those in the public sector are now getting £30,630 on average compared with £27,977 in the private sector?

[Elizabeth Truss]

The figures that my hon. Friend quotes about public and private sector workers are right. My job as Chief Secretary is to make sure that we are properly rewarding public sector workers and that in areas where we are struggling to recruit and retain, pay rises are commensurate, to retain those people. We are also making sure that those pay rises are affordable within our Government budgets, which I think is what taxpayers expect.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Can the Chief Secretary tell me how much extra funding has been provided for schools, to pay for the increase in teachers’ pay? Will that pay increase be fully funded?

[Elizabeth Truss]

As I mentioned already, £500 million is being provided over two years to put into schools’ budgets. We have been working with the Department for Education. This is affordable for schools, but most importantly, it is fair for teachers, and those who are earning under £35,000 will get a 3.5% pay rise.

[Alex Burghart (Brentwood and Ongar) (Con)]

Thanks to the decisions that have been made in Essex, we will see 150 new police officers on our streets. Can the Chief Secretary confirm that those new police officers will benefit from today’s announcement?

[Elizabeth Truss]

My hon. Friend is right. I am delighted to hear the news about the police force in Essex. Those police officers will receive a 2% rise and, in addition, they will get increments as they move up the pay scale, so many will see a rise in excess of that.

[Kate Green (Stretford and Urmston) (Lab)]

Cuts to school budgets have meant that some schools have had to make cuts to payments for support staff such as lunchtime assistants, for example, including by removing their holiday pay. How will today’s announcement benefit those lowest paid workers who have already suffered?

[Elizabeth Truss]

Last year we announced that we were putting £1.3 billion more into schools’ budgets to help them to cope with the issues they were facing. That represents a real-terms increase from 2015. Today we have announced an additional £500 million to support these pay rises for teachers. I say to the hon. Lady: let us look at the school results, such as the fact that our nine-year-olds are now among the best in Europe at reading. It is because of this Government’s reforms that we are seeing better results.

[Robert Halfon (Harlow) (Con)]

I strongly welcome the extra money for lower-paid teachers. May I ask my right hon. Friend where the £500 million will come from within the Department? The Department has already had to make efficiency savings, given the extra £1.3 billion that has gone to schools.

[Elizabeth Truss]

It is important that schools receive the extra money so they are able to afford those pay rises. The money is coming from central DFE budgets—underspends in central DFE budgets—and it will be allocated to schools. My right hon. Friend the Education Secretary will talk about the allocation in due course.

[Stephen Morgan (Portsmouth South) (Lab)]

The Chief Secretary says that our armed forces will receive a 0.9% one-off payment, but there is no clear timeframe. Will she tell us exactly when armed forces personnel will receive that payment?

[Elizabeth Truss]

Personnel will receive that payment alongside their 2% pay rise this year. Many armed forces personnel will also receive pay increments—we saw an average of 1.3% last year—on top of the bonus and the pay rise.

[Mike Wood (Dudley South) (Con)]

What assessment has my right hon. Friend made of the announcement’s impact on the recruitment and retention of prison officers?

[Elizabeth Truss]

My hon. Friend makes a very important point. Prison officers will receive a 2% rise and a 0.75% bonus. Prison officers who were newly recruited on fair and sustainable terms will receive additional progression pay to make sure that we retain those really important workers.

[Wera Hobhouse (Bath) (LD)]

Why have the Government announced that school leaders’ pay will continue to be cut in real terms, given that the School Teachers Review Body said that a 3.5% increase was needed across all pay ranges to prevent “deteriorating” trends in teacher retention?

[Elizabeth Truss]

It is very important that we focus the pay rises on the lowest-earning teachers, which I think would be supported across the education system. Where there are specific shortages in education or in schools, there is of course the flexibility to increase pay, and I know that that happens for a number of headteachers.

[Kevin Foster (Torbay) (Con)]

I welcome the news of the 3.5% pay rise for lower-paid teachers in Torbay. Will the Chief Secretary commit to work with the DFE to publish how the funding will be broken down by local authority so that we can clearly see how this is being funded?

[Elizabeth Truss]

I thank my hon. Friend for his question. How the additional funding will be allocated will certainly be announced in due course by my right hon. Friend the Education Secretary. I welcome my hon. Friend’s welcoming of the good news, unlike Labour Members, who are still looking extremely gloomy.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I am delighted that the Chief Secretary and the Government have finally seen sense and dropped the cap. However, there is already a £20 billion black hole in the MOD budget. How exactly is it going to pay for this?

[Elizabeth Truss]

The hon. Lady is the first Opposition Member to welcome the pay rise, so I thank her for her support for public sector workers and for the pay rise we are giving them. I am working very closely with the Justice Secretary to make sure the pay rise is affordable within the Ministry of Justice budget. [Hon. Members: “Defence!”]

[Tim Loughton (East Worthing and Shoreham) (Con)]

The budgets of West Sussex schools are hugely under pressure and will be completely shot unless this pay award is completely funded centrally. Will the Chief Secretary guarantee that it will be completely funded centrally? What assessment has she made of the impact on the DFE’s budget for children’s social care, which is already facing a predicted shortfall of £2 billion by 2020?

[Elizabeth Truss]

My hon. Friend mentions the funding for teachers’ pay rises. Beyond the 1%, the pay rise will be fully funded centrally, as will be announced by my right hon. Friend the Education Secretary.

I thought the hon. Member for Stoke-on-Trent North (Ruth Smeeth) referred to the MOJ, but apparently she was talking about the Ministry of Defence. The modernising defence review is going on at the moment, and I am working on that very closely with my Defence colleagues to make sure that this remains affordable.

[David Linden (Glasgow East) (SNP)]

The Chief Secretary talks about putting more money into people’s pay packets, so will she tell us when under-25s will be paid the national living wage?

[Elizabeth Truss]

This Government have achieved some of the lowest levels of youth unemployment for years. Under the Labour party, people were left on the scrapheap and we had rising youth unemployment, with up to 20% of our young people unemployed in 2010. What is important is that while people are training and gaining skills, it remains affordable for companies to take them on.

[Tom Pursglove (Corby) (Con)]

I very much welcome these pay awards. Will the Chief Secretary say a little about the difference that taking millions of people out of income tax altogether will make in tandem with these pay awards?

[Elizabeth Truss]

My hon. Friend makes a very good point. We have seen disposable incomes—the money people have to spend—increasing under this Government because we have cut tax for basic rate taxpayers by £1,000 a year. We know that the Labour party wants to raise tax to the highest peacetime levels, and the reality of that would be less money for hard-working public and private sector workers.

[Clive Efford (Eltham) (Lab)]

Not one of the examples that the Chief Secretary announced is above the consumer prices index inflation rate of 2.4%. This is a real-terms cut for public sector workers. The secretary of the Unison branch at my town hall wants to know the Chief Secretary’s message for his branch members. How are they meant to survive when they are facing yet again—as they have year on year, for the past eight years—a real-terms pay cut?

[Elizabeth Truss]

The vast majority of the numbers that I announced are above inflation, but the hon. Gentleman clearly did not hear that. I would point out that these pay awards are for the period 2018-19. We are seeing inflation fall, and many of the awards represent increases significantly above that.

[Huw Merriman (Bexhill and Battle) (Con)]

I asked the Chief Secretary and the Secretary of State for Education to ensure that the well-deserved pay rises for teachers did not come from the existing budget increases, so may I thank them both for ensuring that? My teachers deserve a pay rise, but they do not want school classrooms to suffer. May I also ask whether headteachers will be in receipt of the 2% increase mentioned for higher-rate teachers?

[Elizabeth Truss]

As we have said, pay rises above the 1% that was previously budgeted for will be funded from central DFE budgets. [Interruption.] To the hon. Member for Wythenshawe and Sale East (Mike Kane), who is shouting from a sedentary position, I say that the funding will be not from schools budgets, but from central DFE budgets. We are moving this money to the frontline to make sure that teachers are properly supported. The rate for headteachers is 1.5% but, as I have already said in answer to the hon. Member for Bath (Wera Hobhouse), there is flexibility where there are recruitment issues.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

If these pay rises are from departmental cuts, this will mean no new money, which will result in further public services being lost and redundancies to follow. Does the Chief Secretary agree?

[Elizabeth Truss]

I think that the fastest way to have redundancies is to create a run on the pound and overthrow capitalism.

[Caroline Flint (Don Valley) (Lab)]

This pay award comes on the back of 10 years of pay freezes, which are fundamentally cuts. What can the Minister say to reassure people that, under this pay award, they will not actually see a pay decrease in the years to come?

[Elizabeth Truss]

We have gone through a tough period in the aftermath of the financial crash, and the public sector has made a contribution. We are now at a turning point, with debt falling as a proportion of GDP. It is because of the hard work that has been done that we are now able to afford these pay rises, which are well deserved.

[Matt Rodda (Reading East) (Lab)]

The Chief Secretary talks about this alleged increase, yet she fails to discuss where it is coming from. What guarantee can she give to my constituents, who expect two new schools to be built in Reading East, that those schools will not be raided to pay for the pay rise?

[Elizabeth Truss]

Our programme of spending £23 billion on schools capital will continue. This is about finding efficiencies in our central Government budgets. I know the Labour party does not understand value for money, but that is what we are doing, so that we can put more money into schools and teachers’ pay.

[Sammy Wilson (East Antrim) (DUP)]

The Minister will be aware that an aspect of our confidence and supply discussions with the Government involved raising the pay cap; we welcome the statement that she has made. However, given the fact that there is no Assembly functioning in Northern Ireland, what discussions has she had with the Secretary of State for Northern Ireland to ensure that the money is made available from departmental budgets and, secondly, that the decision is made to award these payments to teachers and nurses?

[Elizabeth Truss]

As usual, the money for this pay will be allocated through the Barnett formula, but the money is coming from the central DFE budget.

[Rachael Maskell (York Central) (Lab/Co-op)]

How exactly will further education colleges be able to give their staff an uplift?

[Elizabeth Truss]

The hon. Lady will understand that we are conducting a review of further and higher education, and that is among the issues that we will be looking at.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Teachers’ pay is not devolved to Wales until September 2019, so can the Chief Secretary confirm that the British Government will make the appropriate transfers to Welsh local education authorities to pay for the increase?

[Elizabeth Truss]

I understand from my colleagues in the Department for Education that this will also apply to Wales.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Past announcements on school budgets have unravelled within days, so is the Chief Secretary guaranteeing that every single penny to fund the teachers’ pay increase will come out of central budgets, with not one single penny falling on school budgets? Does the Chief Secretary accept that this does not change the grim reality of 351 out of 354 Birmingham schools facing real-terms pay cuts and budget cuts over the next two years?

[Elizabeth Truss]

I have been very clear that the additional £500 million over two years will be coming from central DFE budgets. It will be allocated to schools. My right hon. Friend the Secretary of State for Education will be announcing exactly how that allocation will work in due course.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Last week I was speaking to headteachers in my constituency who were very frustrated that they were breaking up for the summer unable to finalise their budgets. Now that they are able to do so, can the Chief Secretary guarantee today—I think that she has dodged this question a little bit today—that they will not have to find a penny from their existing budgets to fund the pay award?

[Elizabeth Truss]

I think that many Opposition Members are missing the point that headteachers have significant flexibility in terms of paying their staff. Last year there was an average rise of 4.6%, including promotions. The point I am making is that above the 1% pay award that was already baked in, the DFE is providing extra funding to the tune of £500 million. My right hon. Friend the Secretary of State will be announcing the allocations in due course.

Fiscal Risks and Managing Fiscal Sustainability Report

Elizabeth Truss Excerpts

Tuesday 17th July 2018 Written Statements

[The Chief Secretary to the Treasury (Elizabeth Truss)]

Today sees the publication of two reports which underscore the need for continued fiscal responsibility: the Office for Budget Responsibility’s (OBR) 2018 Fiscal Sustainability Report (FSR) and the Government’s report on Managing Fiscal Risks [CM 9647]. The publication of the FSR fulfils the OBR’s legal obligation to publish an analysis of the sustainability of the long-term public finances and an assessment of the public sector balance sheet at least once every two years. Managing Fiscal Risks fulfils the Government’s obligation to respond to the OBR’s 2017 Fiscal Risks Report (FRR). These reports have been laid before Parliament today and copies are available in the Vote Office and Printed Paper Office.

These reports come at a turning point for the public finances. The Government have made significant progress in repairing the public finances over the past eight years. The deficit has been cut by over three quarters from its post-war peak of 9.9% of GDP in 2009-10 to 1.9% in 2017-18. The debt-to-GDP ratio is now forecast by the OBR to have peaked last year and to begin its first sustained fall in a generation from this year.

Both reports illustrate the long-term pressures and risks to the public finances, underscoring the importance of locking in this hard-won progress and continuing to reduce debt. As analysis by international experts and the OBR’s own fiscal stress test has shown, Governments with high levels of debt are more vulnerable to shocks and have less room to use fiscal policy to mitigate their impact on the economy. Moreover, leaving Government debt at current levels would see the burden of servicing that debt rise to levels not seen since the mid-1980s if interest rates normalise in the way assumed in the OBR’s long-run projections. This would pass an unacceptable burden on to the next generation. The Government are therefore committed to continuing to reduce debt as a share of GDP.

The 2018 FSR projection shows that, left unaddressed, demographic change and non-demographic cost pressures on health, pensions, and social care would push the debt-to-GDP ratio to over 280% of GDP by 2067-68. One of the most important drivers of the long-run fiscal outlook in the FSR is health spending, which the OBR projects will rise from 7.6% of GDP in 2022-23 to 13.8% in 2067-68 in the absence of action to increase productivity and contain costs. While this is partly explained by population ageing, most of the projected increase is due to non-demographic cost pressures—including the low productivity of the health sector relative to the rest of the economy; increases in chronic conditions; and improvements in technology and medical research leading to the provision of new drugs and treatments.

The Government recognise that the NHS will need additional resources to help meet these pressures. In June, the Prime Minister announced that the NHS in England will receive an increase in funding over the next five years that equates to over £20 billion a year more in real terms by 2023-24. The Government also recognise the need for action being taken to address long-term cost drivers in health. The final settlement will be confirmed at a future fiscal event, subject to an NHS 10-year plan that delivers the efficiency, productivity, and performance improvements necessary to help address the long-term cost pressures highlighted by the OBR. The Government will fund this five-year commitment in a responsible way, while continuing to meet its fiscal rules and reduce debt. As the Prime Minister has said, this will be partly funded by money that we will no longer spend on our annual membership subscription to the European Union after we have left. In addition, across the nation, taxpayers will need to contribute a bit more in a fair and balanced way to support the NHS we all use.

The Government are also determined to tackle the other risks and pressures facing the public finances, to lock in the hard-won progress we have made in reducing borrowing and getting debt falling. The OBR’s 2017 Fiscal Risks Report provided the UK’s first ever survey of the potential risks to the public finances and was recognised by the IMF, OECD, and others as the most comprehensive report of its kind and the only one produced by an independent body. By publishing our response today, the Government invite Parliament and the public to hold us to account for the responsible management of those risks.

Managing Fiscal Risks shows how the Government are tackling these risks as we continue to repair the public finances for the benefit of current and future generations—following our balanced approach to the public finances, getting debt falling while investing in our vital public services and keeping taxes as low as possible.

The report sets out the specific steps the Government are taking to mitigate key sources of risk identified by the OBR. These include actions to reduce the likelihood and cost of financial crises, adapting the tax system to a changing economy, improving the sustainability of the state pension in the light of rising longevity, tightening controls over the issuance of loans and guarantees, and managing the Government’s inflation exposure by considering the appropriate balance of index-linked and conventional gilts.

It also highlights that in the long run, boosting productivity growth would accelerate the return to fiscal sustainability and alleviate pressures on taxpayers and public services. The Government are taking forward a comprehensive strategy for boosting productivity based on supporting long-term investment in physical, human and intellectual capital.

Supporting the vision set out in the modern industrial strategy, the Government are increasing investment in key productivity-boosting infrastructure; The National Productivity Investment Fund will provide £31 billion of additional investment in areas critical to improving productivity and £1 billion in improving the UK’s digital infrastructure. We have increased public support for R&D to its highest level in 30 years and are committed to increasing public and private investment in R&D to 2.4% of GDP by 2027.

The Government are also committed to making sure that Britain is the world’s most attractive location for private investment. We are supporting UK businesses by delivering a competitive tax system that supports growth and investment—including by reducing the corporation tax rate from 28% to 19% today, the lowest in the G20.

Building human capital through strengthening education and training is a priority for the Government. We are taking action to transform technical education and help prepare people for the high-skilled jobs of the future, by investing in apprenticeships through the introduction of the apprenticeship levy, introducing a national retraining scheme, and introducing T-levels, which will mean that all 16-18 olds have a choice of technical and academic routes of equal status and quality.

These OBR reports and the Government’s Managing Fiscal Risks report keep the UK at the frontier of fiscal management internationally and demonstrate the Government’s commitment to fiscal transparency and accountability. No other Government are so open about the risks to the public finances or more determined to manage them responsibly for the benefit of current and future generations.

[HCWS862]

Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 3rd July 2018 Commons Chamber

[John Mc Nally (Falkirk) (SNP)]

1. What recent assessment he has made of the financial implications for Scotland of the UK leaving the EU customs union.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

Scotland exports almost £30 billion of goods and services, including its iconic whisky, and we want to make sure we have as frictionless trade as possible with the EU as well as the ability to strike independent trade deals with the rest of the world.

[John Mc Nally]

Alexander Dennis is a strong, world-leading bus-building company employing 1,000 people in my constituency, but its chief executive officer, Colin Robertson, has expressed serious concerns about a hike in costs within the supply chain should the UK leave the customs union. Given that the Chancellor has so far failed to stop the Prime Minister’s hard Brexit, what are we to expect from him at Friday’s Cabinet showdown on Brexit—action or evasion?

[Elizabeth Truss]

Of course we want trade with the EU to be as frictionless as possible, but I point out to the hon. Gentleman that the UK market is worth £46 billion to the Scottish economy, and his party wants to leave that market.

[Stephen Kerr (Stirling) (Con)]

Given that Scottish businesses export more to non-EU countries than to EU countries, does my right hon. Friend agree that the opportunity for Scottish businesses from new trade deals is potentially that much greater?

[Elizabeth Truss]

My hon. Friend is right. Outside the UK, the No. 1 destination for Scottish exports is the US, which accounts for 16% of exports, and of course part of the opportunity of leaving the EU is the ability to negotiate new trade deals, such as with the US.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

It is getting completely ridiculous now. When either the Chancellor or the Chief Secretary to the Treasury is finally allowed to have a look at this mythical third customs plan from No. 10, will they at least have the integrity and honesty if it does not deliver the exact same benefits for Scotland—or, for that matter, England, Wales and Northern Ireland—to come to this House and actually say so?

[Elizabeth Truss]

As I have said, we want to secure as frictionless trade as possible with the EU as well as those opportunities with the rest of the world. It would be helpful if the Labour party, rather than trying to reverse the result of the referendum, was instead more positive about the opportunities in the future.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend welcome with me the news that foreign direct investment project numbers are up 7% in Scotland compared to last year and have broken records every year for the past three years, and all this despite a Scottish National party Government in Scotland who are constantly talking down the prospects of the Scottish economy?

[Elizabeth Truss]

Those are fantastic figures for Scotland. We have seen good figures across the UK and the lowest unemployment for 40 years. The Labour party wants to overthrow capitalism; we want great businesses that will do well for our economy.

[Owen Smith (Pontypridd) (Lab)]

Could the Chief Secretary to the Treasury reassure the House and the people of Scotland that they will not be paying more in fuel and alcohol duty after Brexit in order to fill the post-Brexit hole in our public finances?

[Elizabeth Truss]

I am afraid to tell the House that the people of Scotland are having to pay more income tax thanks to the SNP Government. Everyone earning more than £26,000 is paying more tax under the SNP.

[Charlie Elphicke (Dover) (Ind)]

Would the Chief Secretary to the Treasury not agree that the people of Scotland and the United Kingdom will be better off if we leave the customs union and invest in state-of-the-art technology to ensure that we have frictionless trade and pursue the trade opportunities that lie ahead of this nation around the globe?

[Elizabeth Truss]

I know that my hon. Friend has done a lot of work at the port of Dover making sure it is ready for all eventualities. We want to have the best possible trade with both the EU and the rest of the world. That is the opportunity we have got.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

22. The Financial Times is reporting that both Ministers and Bank of England officials fear a Brexit assault on the £8 trillion asset management industry, so the stakes at this Friday’s Brexit Cabinet bunfight could not be higher. Will protection of Scottish financial passporting rights be a red line for the Chancellor?

[Elizabeth Truss]

The financial services industry is a very important industry for the whole UK and we want it to do as well as possible, which is why we are working on getting the best possible deal. It is in the interests of EU countries that rely heavily on UK financial services to get a deal that suits both sides.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

According to EY’s recently released Brexit Tracker, a third of all financial services companies have confirmed that they will move staff or operations outside the United Kingdom. Most are going to Dublin, Frankfurt and Luxembourg, and they are going because this Government cannot give them the basic assurances for which they, and we, have been asking for 18 months. After eight failed years of Conservative government, we simply cannot afford this. What are the Government going to do to stop it getting any worse?

[Elizabeth Truss]

I am amazed that the hon. Gentleman did not mention the fact that the City has yet again been rated the top financial centre in the world. We hear nothing but doom and gloom from the Labour party about the future of our economy. If the hon. Gentleman thinks that the solution to our problems is calling business the enemy and overthrowing capitalism, he is seriously mistaken.

[Mrs Maria Miller (Basingstoke) (Con)]

2. What fiscal steps his Department is taking to reduce unemployment.

--- Later in debate ---

[The Chief Secretary to the Treasury (Elizabeth Truss)]

It is right that money that is spent locally is raised locally. In 2010, councils were 80% dependent on central Government grants; by 2020, the vast majority of money spent locally will be raised by local councils.

[Afzal Khan]

The County Councils Network warned this week that

“the worst is yet to come”

for local government and that several authorities risk going bust. A survey of its members revealed that two thirds will struggle to balance their budget by 2021 unless more funding is made available, estimating the funding gap at £3.2 billion over the next two years. Is the Chancellor aware of the effect his austerity agenda is having on local services? Will he take responsibility for ending this crisis in our local councils?

[Elizabeth Truss]

As I said, we have moved from a situation in which local councils were majority funded by central Government to one where local councils are accountable for the money they spend and raise locally. We have given councils the extra ability to raise funds. I note that many councils have reinvented themselves, are doing things differently and are saving money, and public satisfaction with local services has held up.

[Mr Philip Hollobone (Kettering) (Con)]

I declare my interest as a member of Kettering Borough Council.

By when do the Government expect to publish the conclusions to their fair funding review of local government?

[Elizabeth Truss]

We are currently considering those responses carefully, and we will publish them shortly.

[Peter Dowd (Bootle) (Lab)]

Eight failed years of austerity have meant poor levels of funding for local government. In fact, today the Local Government Association reports that, by 2020, councils will have had £16 billion of funding cuts. With low pay, woeful productivity, tenuous job security, stubborn inflation, rising national debt, a huge deficit, a sinking pound, creaking public services, decaying infrastructure and chaotic railways, what other wheezes does the Chief Secretary have up her sleeve to wreck the economy further?

[Elizabeth Truss]

We are building. We saw a record number of new businesses started last year. We have record levels of employment across our economy. We have brilliant Conservative Mayors, like Andy Street and Ben Houchen, who are attracting new businesses to their areas and redesigning their port infrastructure, whereas Labour councils across the country are doing things like closing down Airbnb, trying to stop Uber and trying to stop progress.

[Peter Dowd]

Yes, that told me. It gets worse, if that were possible. This year, business investment growth is slowing, annual export growth is slowing, service sector growth is slowing and economic growth is slowing. With Brexit looming and punch-ups in the Cabinet, should the nation’s economic future really rest in the hands of a go-slow Government?

[Elizabeth Truss]

Given that the hon. Gentleman’s stated policy is to have a run on the banks, I suggest that our ideas for bringing in business investment are doing a lot better for Britain.

[Liz Twist (Blaydon) (Lab)]

8. What recent discussions he has had with the Secretary of State for Health and Social Care on changes in the level of funding for public health since 2010.

--- Later in debate ---

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

10. What recent discussions he has had with the Secretary of State for Education on changes in the level of funding per pupil in schools since 2010.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We have protected schools’ budgets in real terms since 2010, and through our reforms to schools and the curriculum children’s results have improved, particularly in reading.

[Ruth Cadbury]

Will the Minister confirm that the additional £1.3 billion announced a year ago does not address the £1.5 billion shortfall in school budgets? So what advice does she have for the 88% of schools in this country facing real-terms budget cuts, despite the new funding formula?

[Elizabeth Truss]

I suggest the hon. Lady reads last week’s edition of Schools Week, which said that the unions had admitted that they had their sums wrong and in fact per-pupil funding was being protected in real terms in 2018-19 and 2019-20.

[Chris Philp (Croydon South) (Con)]

Will the Chief Secretary confirm that per-pupil spending in this country is higher than that in Japan or Germany? Will she also confirm that this is not just about how much we spend, but about how wisely we spend it, thanks to which 2 million more children are now in good and outstanding schools than there were in 2010?

[Elizabeth Truss]

My hon. Friend is correct. In addition, the real-terms funding per pupil will be 50% higher in 2020 than it was in 2000. This Government’s reforms to reading and mathematics are resulting in students’ scores increasing, whereas under the Labour party we just had grade inflation.

[Wes Streeting (Ilford North) (Lab)]

18. That is fascinating, because compared with last year, England’s schools have 137,000 more pupils but almost 5,500 fewer teachers, 2,800 fewer teaching assistants, 1,400 fewer support staff and 1,200 fewer auxiliary staff. What has gone wrong? Is it that headteachers are not investing in staff, or is it that the Chief Secretary to the Treasury is in denial and thinks that she knows more than they do about how to manage school budgets?

[Elizabeth Truss]

I point out to the hon. Gentleman that 10,000 more teachers are now working in our schools than under the Labour Government. He should look at the results that children are achieving and the improvements that we have seen, particularly in reading. Under Labour, we were among the worst in Europe, whereas we are now among the best.

[Steve Double (St Austell and Newquay) (Con)]

11. What steps he is taking to invest in infrastructure in Cornwall and the south-west.

--- Later in debate ---

[Andrew Selous (South West Bedfordshire) (Con)]

T4. Only 15% of people who start their working lives in entry-level jobs in this country manage to rise above that level. This country would be more prosperous and socially just, and would have a bigger tax base, if we could help them. What more can we do to help that segment of the population?

[The Chief Secretary to the Treasury (Elizabeth Truss)]

My hon. Friend is absolutely right. The way in which we will get higher wages is by improving productivity and skills, which is why we are investing in a record level of apprenticeships and the national training partnership.

[John McDonnell (Hayes and Harlington) (Lab)]

As my hon. Friend the Member for West Bromwich West (Mr Bailey) pointed out, the British Chambers of Commerce has said today that its patience with the Government over Brexit is at “breaking point”. Its sense of frustration reflects accurately what trade unions and businesses across the country feel. All the British Chambers of Commerce wants are answers to some very basic questions, so will the Chancellor and those on the Treasury Bench provide some answers today? Post-Brexit, will goods be subject to new procedures and delayed at border points? Will regulation checks on goods conducted in the UK be recognised in Europe? Will firms be able to transfer staff between the UK and the EU as they do now? Above all else, will Ministers stop squabbling and provide some answers to these vital questions?

--- Later in debate ---

[Ellie Reeves (Lewisham West and Penge) (Lab)]

T2. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 was intended to save £450 million a year on legal aid, but last year’s spending was more than £950 million down from 2010 levels. As we find ourselves in an access to justice crisis, what discussions have Treasury Ministers had with the Ministry of Justice about increasing the money available for legal aid as part of the LASPO review?

[Elizabeth Truss]

We are conducting a review of LASPO at the moment. I have regular discussions with the Secretary of State for Justice, and we are making sure that the Department has the resources it needs.

[Bob Stewart (Beckenham) (Con)]

T9. Fly-tipping is now a major nuisance to my constituents. The cost of dealing with even a single instance can run to thousands of pounds, and that does not include the cost of investigating for hazardous waste and trying to get prosecutions. Will the Minister consider the case for additional funding to enable my local council of Bromley, as well as other councils, to pay for the battle against environmental criminals?

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Rail electrification and the Swansea Bay tidal lagoon have both been scrapped by the British Government because they were not deemed good value for money. When it comes to designing the criteria for the proposed UK shared prosperity fund, will an immediate return on investment be the priority, as with every project scrapped in Wales?

[Elizabeth Truss]

We are looking closely at the shared prosperity fund to make sure that it delivers best value for money right across the UK, and I am in discussions with the Welsh Secretary about that.

[Jeremy Quin (Horsham) (Con)]

What is my hon. Friend’s reaction to the FCA report on doorstep lending, and does it go far enough?

--- Later in debate ---

[Martin Vickers (Cleethorpes) (Con)]

I was pleased to welcome the Chief Secretary to the Treasury to my constituency a couple of weeks ago. Does she agree that the enthusiasm that we heard from local businessmen for free ports and free zones could be the way ahead for economic growth in Immingham and the surrounding area?

[Elizabeth Truss]

I was hugely impressed by the enthusiasm in Grimsby, Cleethorpes and Immingham for more development and more opportunities for free zones—and also by the fantastic fish and chips we had on Cleethorpes pier.

Treasury Spending: Grants to Devolved Institutions

Elizabeth Truss Excerpts

Tuesday 3rd July 2018 Commons Chamber

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We have had a fantastic debate, in which we have heard from some of our top talents from right across the House. I thank the hon. Member for Aberdeen North (Kirsty Blackman) for opening the debate and the hon. Member for Bootle (Peter Dowd) for his contributions. Sadly, however, we again heard the tales of doom and gloom, and projections of difficulty, whereas when we look at what is happening around Britain and at the UK economy, we see there is a positive story. We have record levels of employment and of new businesses set up, and exports are going up right across the UK. All that comes while we have had to deal with the legacy of the previous Labour Government, who left this country in crisis. We have managed to reduce the deficit that they left us by three quarters. It is because of our stewardship of the economy that we have been able to make sure that the devolved Administrations throughout the UK received more money in the most recent Budget, which contained £2 billion for Scotland, £1.2 billion for Wales and £660 million for Northern Ireland.

We have heard some absolutely fantastic speeches in this debate, particularly from the Scottish Conservative MPs, who talked about some of the real issues in that country. We heard complaints from Scottish National party Members but, as my colleagues pointed out, it is within the Scottish Government’s power to solve many of the issues that they raised. The Scottish Government have failed to use the money delivered through the Barnett formula to sort out those problems.

My hon. Friend the Member for Angus (Kirstene Hair) talked about the failings in the NHS. My hon. Friend the Member for Moray (Douglas Ross) talked about those failings as well, and asked where the SNP Members were during the debate. No doubt they were getting seats for the England versus Colombia match that we are all looking forward to. My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) talked about the failures of IT to deliver agriculture payments to Scottish farmers and the lamentable results in English and maths education, which show that Scottish children have been let down by the Scottish Government. My hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) talked about how hard-working people are being punished by the raising of taxes on their income at the same time as the Scottish Government are inflating the cost of government and the number of Ministers. My hon. Friend the Member for Stirling (Stephen Kerr) talked about the poor management of the budget in Scotland. I am glad that we were able to finalise the details of the Stirling and Clackmannanshire city region deal.

[Stephen Kerr]

Will my right hon. Friend take this opportunity to confirm to the House that the UK Government contribution to the Stirling and Clackmannanshire city region deal is £45.1 million? The SNP asked the question, and I think it is worth repeating that it is £45.1 million—thanks in no small measure to my right hon. Friend.

[Elizabeth Truss]

I can indeed confirm that the money allocated by the UK Government to the Stirling and Clackmannanshire deal is £45.1 million. I thank my hon. Friend for his hard work on that deal. I will be looking at the issues across Government to make sure that we deliver these deals in the best possible way to deliver real value for local communities. That is what MPs have been campaigning for and I will look into that very carefully.

[Pete Wishart]

Will the Chief Secretary tell us when the Tay cities deal is finally going to be agreed and concluded? Will she confirm that the UK Government will match the funds that the Scottish Government supply to that deal?

[Elizabeth Truss]

I have already had some discussions about the Tay cities deal with the Secretary of State for Scotland, and we will look at the details. We constantly have to make sure that every piece of Government spending has the best possible value for money. It was significant that in the speeches from SNP Members we heard nothing about value for money or the fact that taxpayers pay for spending.

[Peter Dowd]

Will the Chief Secretary join me in congratulating the hon. Member for Stirling (Stephen Kerr) on actually getting an answer out of this Government?

[Elizabeth Truss]

My hon. Friend the Member for Stirling is an extremely effective Member of Parliament from whom Members from all parties could learn.

[Luke Graham]

I have two questions. First, SNP Members regularly question this, so will my right hon. Friend confirm Scottish Conservative Members’ involvement in the Stirling Clackmannanshire deal and Tay cities deal negotiations? Secondly, will my right hon. Friend push the devolved Administration in Scotland to confirm that the money that they have pledged for the Tay cities deal will be new money, not reallocated money, as has been the case with so many other deals, which have taken money from other local authorities?

[Elizabeth Truss]

It was very good to meet my hon. Friend to discuss the Clackmannanshire and Stirling city region deal and I look forward to visiting him and his colleagues soon in Scotland to see how things are working on the ground. I can confirm that we will be working further with the Scottish Government on those issues.

I commend the work that is being done on the oil and gas industry by my colleagues in Scotland. That issue was also raised by the hon. Members for Aberdeen North and for Glasgow North (Patrick Grady). As well as visiting Stirling and Clackmannanshire, I will be going up to Aberdeen to hear directly from representatives from the oil and gas industry. [Interruption.] Well, that is a very kind comment, sir, and may I offer the hon. Member for Ealing North (Stephen Pound) a happy birthday on this great occasion?

A number of Members raised the issue of health funding. As has been explained by the Prime Minister and the Chancellor, we will be presenting the details of how that will be funded in due course and, of course, the Barnett consequentials will be passed to the devolved Administration. It is very important that we ensure that, for every pound of money that we spend, we get maximum value for money. With that money going into the health service, we are making sure that it is improving productivity, improving efficiency and getting the maximum benefit from our hardworking staff on the frontline. That will, of course, be part of the work that we do as well.

On Brexit, we heard the usual contradictions from Scottish National party Members. First, they said that if we were to leave the customs union, which is what we, as a Government, have promised to do, that would be bad news for Scotland. We are, of course, seeking the most frictionless arrangements at the border that we possibly can. They also said that they wanted an independent Scotland, cut off from the rest of the UK. Given that goods worth £46 billion travel from Scotland into the rest of the UK every year, that sounds to me like a highly contradictory statement.

We also heard various comments about Northern Ireland and the additional £1 billion allocated to it. I point out to all Members of the House that, of course, we have the Barnett formula, which is about making sure that consequentials are passed through when there is a change in spending in England, but it is absolutely standard practice that we do fund outside the Barnett formula where it is valid, and we have done so in the past. For example, the Stormont House and Fresh Start agreements were funded outside the Barnett formula. We altered the Barnett formula, as was mentioned by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), to make sure that spending levels in Wales are fair, and we have also allocated extra money to city deals across Wales and Scotland, because they have, in many cases, largely devolved purposes.

I am pleased that the hon. Member for Aberdeen North welcomed the funding that we are providing for the potential visit of the American President to Scotland. I confirmed today that we will supply an extra £5 million to cover the cost incurred by Police Scotland. Again, that is outside the Barnett formula. Therefore, we do have the Barnett formula there for the important work that is done across Government, but it is right that we should look at the specific circumstances that we face with respect to Northern Ireland and to getting the right city deals in Scotland and Wales. We need to ensure that we use our funding in that flexible way.

We have heard some fantastic speeches in the House today, but I observe that the champions of fiscal rectitude and enterprise in Scotland sit on the Conservative Benches.

Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 22nd May 2018 Commons Chamber

[The Chief Secretary to the Treasury (Elizabeth Truss)]

People’s disposable income is now 4.6% higher in real terms than in 2010. That is because we have turned around the economy and held taxes down.

[Trudy Harrison]

According to recent figures from the Office for National Statistics, real household disposable income is £1,600 higher than in 2008, while the proportion of lower paid workers has fallen to its lowest level for 35 years due to the national living wage. Does my right hon. Friend think that those statistics would be as positive if we had taken the advice of the Labour party?

[Elizabeth Truss]

As my hon. Friend knows, the advice of the Labour party is that we need to “overthrow capitalism”. If we were to do that, there would be fewer businesses, fewer jobs, higher taxes and higher mortgage rates—and we would all be queuing for food, as people are in Venezuela.

[Alison McGovern (Wirral South) (Lab)]

Families with three children are at a greater risk of poverty than other families, and next year the Chief Secretary to the Treasury will take £1.2 billion away from them. Does she agree that this is the least family-friendly Government in history?

[Elizabeth Truss]

What we have done for families is make sure that more parents and families are in work than ever before, enabling them to look after and support their children. We are also investing a record amount in childcare—£6 billion a year—to help more parents into work.

[Royston Smith (Southampton, Itchen) (Con)]

19. Increases in the personal allowance and the national living wage, and the freeze to fuel duty, have helped my constituents with the cost of living. However, things are still tough and too many are just about managing. What further plans does my right hon. Friend have to continue to support my hardworking constituents?

[Elizabeth Truss]

My hon. Friend is right that we need to keep taxes down, but we also need to recognise the role that free enterprise and free markets play in encouraging competition, allowing new products to come to the market and keeping prices low. The reason why we have low food prices and cheap air fares is because we have successfully kept those markets open. The Labour party advocates abandoning that.

[Kirsty Blackman (Aberdeen North) (SNP)]

Tory austerity will result in annual social security cuts of £4 billion in Scotland by 2020. The Institute for Fiscal Studies estimates that 1 million more children will be pushed into poverty across the UK. With planned devolution covering only 15% of social security spending, the blame lies firmly at the Chancellor’s door. Does the Minister think that is acceptable?

[Elizabeth Truss]

What I find incredible is that the Scottish National party, which has been in power in Scotland for many years, presiding over declining education standards and now raising taxes in Scotland, has the audacity not to take responsibility for its own policies and actions.

[Kirsty Blackman]

The Chief Secretary did not answer my question. Once a fortnight someone comes into my office with so little income that we have to refer them to a food bank. When will the Chancellor realise how much harm he is causing? When will he reverse the cuts and when will he end the hunger?

[Elizabeth Truss]

The reality is that we have seen more people in work in Scotland, as we have across the country, and that is delivering more real income. We have held taxes down across the country, to the tune of £1,000 per basic rate taxpayer, which means that people have more disposable income to spend.

[Lyn Brown (West Ham) (Lab)]

Well, that was fascinating.

The Chief Secretary knows full well that 67% of children in poverty live in working households. The Child Poverty Action Group expects cuts within universal credit to push up to 1 million children into poverty by 2020. When all the Government’s policy changes are included, lone parents have lost an average of £5,250 a year since 2010. Families with three or more children have lost £5,600 a year. Families with a disabled parent and a disabled child have £6,500 less every single year. Is she complacent or just callous?

[Elizabeth Truss]

Surprise, surprise: we have not heard Labour acknowledge the excellent news from the Resolution Foundation that we now have the lowest share of low-paid employees for 35 years—before the Labour Government were in power. Under Labour, we saw rising unemployment and more people left on the scrapheap. We saw a welfare system that did not support people into work.

[Mr Speaker]

Order. We need to make faster progress. If people could keep their questions brief, and if answers could focus, as constitutionally they must, on the policies of the Government, that would be the proper procedure in the House. The right hon. Lady is very experienced and I know she knows that extremely well.

[Wera Hobhouse (Bath) (LD)]

3. If he will bring forward proposals for a multi-year funding plan for the NHS and adult social care.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We will come forward with a new long-term plan for the NHS and provide a new multi-year funding settlement in support of that plan. What is also important is that we are developing policies on artificial intelligence and digital services to make sure that our NHS delivers better outcomes for patients.

[Wera Hobhouse]

To raise the amount we need for long-term sustainable services for my constituents and people across the country, will the Chief Secretary consider introducing a ring-fenced health and social care tax that would bring together spending on both services into a collective budget?

[Elizabeth Truss]

As the hon. Lady knows, the problem with such hypothecated taxes is that if the revenues from them go down, the consequence is a reduction in support for our NHS or our social care services. That is why we believe in funding those services out of general taxation. We put an extra £6.3 billion into the health service at the Budget. We are looking at the longer-term settlement, but it is important to note that this is about not just the money we spend, but how we spend it.

[Liz Twist (Blaydon) (Lab)]

4. What recent assessment he has made of the adequacy of his Department’s procedure for authorising and monitoring private finance initiative contracts.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

13. What assessment he has made of trends in the level of wage growth for young people over the last 15 years.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

From 2002 until the crisis, young people saw their real wages grow more slowly than the UK average. In fact, their wages fell more during the recession. Since 2014, young people’s wages have been rising faster than the UK average.

[Nic Dakin]

Young people are struggling to get a good start in the job market. They are earning less, working longer hours and commuting further than their parents’ generation. What are the Government going to do to transform their outcomes?

[Elizabeth Truss]

The most important thing is that those young people are in jobs, and under Labour we saw unemployment rise to 20%. Youth unemployment has reduced by 40% since 2010. I recognise that we need to see those young people get better skills. That is why we are investing in IT training, that is why we are developing the maths premium so that more students study science, technology, engineering and maths, and that is why we have developed the apprenticeship levy to get more people into apprenticeships.

[David Hanson (Delyn) (Lab)]

14. What recent estimate the Government have made of the cost to the economy of money laundering and criminal finance in the UK.

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[Tim Loughton (East Worthing and Shoreham) (Con)]

T2. Much champagne, or, in the more discerning households, English or Welsh sparkling wine, was drunk at the weekend, so what is the Chancellor doing financially to help promote and expand this excellent domestic wine industry? Post Brexit, will he address the anomaly whereby fizz is taxed more than still wine, which has a higher alcohol volume?

[The Chief Secretary to the Treasury (Elizabeth Truss)]

I know that my hon. Friend represents some of the finest English sparkling wine vineyards, and I am pleased to say that some new ones have recently opened in Norfolk. We now have record exports of more than £100 million a year of our fantastic sparkling wine and we will continue to look at our policies to promote this brilliant product.

[Laura Pidcock (North West Durham) (Lab)]

T9. Contrary to the out-of-touch outlook presented by the hon. Member for Brigg and Goole (Andrew Percy), Eurostat figures show regional inequality in the UK, measured in output per hour, to be the worst in Europe. There is a massive disparity across England, with households in the south-east, the richest area of the UK, having more than double the wealth of those in the north-east, where my constituency is. When will the Treasury finally act to meaningfully tackle this ongoing injustice?

--- Later in debate ---

[Ruth George (High Peak) (Lab)]

With child poverty set to increase by another 1.5 million by 2022, according to the Economic Council for Equality, what will the Treasury be doing to help the very poorest households?

[Elizabeth Truss]

What we have seen in the past few years, since 2015, is a 7% rise in the real wages of people on the lowest incomes, and a reduction in income inequality.

[Craig Mackinlay (South Thanet) (Con)]

T8. With the full phasing in of the residents’ nil-rate band for inheritance tax by 2020, a couple will potentially be able to leave £1 million free of inheritance tax to descendants. That is all very welcome, but having worked through the legislation in a real example, it seems unduly complex. Will my right hon. Friend now consider simplifying the law to make the overall IHT allowance a simple, no-nonsense £500,000 each and remove the complexity of the residents’ nil-rate band rules?

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

The TUC estimates that the number of working households in poverty has risen by 1 million since 2010. Inaction on low-paid, insecure work and punitive welfare reform measures have led to record numbers of people accessing food banks. A responsible Government would measure food insecurity to create policies that end hunger. My Food Insecurity Bill does that. Why will the Government not back it?

[Elizabeth Truss]

We are the Government who have introduced the national living wage. We have reduced tax bills for those on the lowest incomes, and we are keeping our food market competitive and have some of the lowest food prices in Europe.

[Luke Graham (Ochil and South Perthshire) (Con)]

The UK productivity and prosperity funds are meant to benefit all local authorities across the United Kingdom. Will my right hon. Friend meet me to talk about how Scottish local authorities can apply directly to those funds?

--- Later in debate ---

[Chris Skidmore (Kingswood) (Con)]

Today’s figures from the Office for National Statistics reveal that we are at the lowest level of public borrowing since 2006. Will the Chief Secretary to the Treasury set out what that will mean for future investment in public services, as opposed to maxing out paying off the nation’s credit card?

[Elizabeth Truss]

My hon. Friend is right that we have successfully turned the economy around. We have brought the deficit down, and next year, for the first time in many years, we will see debt fall as a proportion of GDP—[Interruption.] Some Members are laughing, but the same people are proposing that we increase our debt by half a trillion pounds and push our country into penury.

[Jessica Morden (Newport East) (Lab)]

What will ministers do to support the “Great Western Cities” initiative, which promotes collaboration between Bristol, Newport and Cardiff and has enormous potential for the wider region?

Economic and Fiscal Outlook

Elizabeth Truss Excerpts

Monday 30th April 2018 Commons Chamber

[The Chief Secretary to the Treasury (Elizabeth Truss)]

I beg to move,

That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment of the medium term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.

Of course, we all look forward to the day when we have left the European Union and we no longer have to file this report. But while we are in the European Union, it is a legal requirement, as part of the stability and growth pact, to present our economic and budgetary plan. Owing, to the opt-out that we negotiated in the 1990s, there are no sanctions or actions should items of the plan not be met. In fact, the only stated requirement is to endeavour to avoid excess deficit. Now, that is something of which I approve anyway and with which we are happy to comply.

I am proud to talk about the record of this Government over the last eight years. We have reduced the deficit by three quarters and have now reached the turning point of debt falling as a share of the economy, which will happen in this financial year. As the Chancellor said in the spring statement, we are now in a much healthier position, but it is very important that we do not abandon this fiscal discipline.

In 2010, the economy was on its knees. We had the highest level of deficit since the second world war, youth unemployment was rising and 1.4 million people were left on the scrap heap. Since then we have turned things around, by reforming the economy and with our fiscal plans. There is a record number of new companies; real wages are increasing; we have record levels of employment; and there are positive signs right across the country. These strong economic fundamentals are down to the decisions of this Government.

We have reformed our welfare system to ensure that it always pays to go to work. We have reformed our education system to make sure that our children and young people have the skills that they need for the modern economy. We have made it easier for companies to take on staff. We have reduced corporation tax. Recently we have seen the two strongest quarters of productivity growth since before the financial crisis. Inflation is set to fall this year and we have seen an easing of pressure on living standards. But despite all this progress, every one of these measures has been opposed by the Labour party.

The shadow Chancellor has said that he sees business as the enemy. Labour Members have opposed our efforts to make Britain open for business and want to go back to the days of punishing taxes and red tape. They have also opposed our welfare and education reforms. [Interruption.] I hear mutterings from the Opposition Front Bench.

These reforms have been accompanied by fiscal discipline. Our fiscal strategy has been vital in boosting confidence in the UK economy and enabling growth in the private sector. We have brought down the deficit by three quarters, and at the same time we have maintained high-quality public services. We spend more per student on education than Japan or Germany, and we have seen our results in reading improve against our international peers. Our health spending is higher than the EU average, and we now have record cancer survival rates. Through our fiscal prudence—that phrase used to be popular on the Labour Benches—we have been able to spend targeted amounts of money to boost our productivity. Infrastructure spending will be at a 40-year high as a proportion of GDP by the end of this period. We are tripling the number of computer science teachers and encouraging more students to take maths at a higher level.

We are now at a turning point. After the highest debt that we have seen in Britain’s peacetime history, we will see debt as a proportion of GDP falling. To people who say that now is the time to turn on the spending taps, I say that would be premature. It is very important that we bring down debt as a proportion of GDP. We know that economies with high levels of debt see a drag on their growth rates and are less resilient to external shocks. We also know that we are spending a huge amount on debt interest. With the debt interest we spend—£50 billion a year—we could completely abolish council tax, business rates or fuel duty.

[Simon Hoare (North Dorset) (Con)]

Does my right hon. Friend agree that one of the most tempting phrases that we often hear from the Opposition Benches, but the one to be resisted most strongly, is “Borrow to invest”? Irrespective of what one does with the money, one is still borrowing it and it still has to be paid back.

[Elizabeth Truss]

My hon. Friend is right. We are switching spending from current spending to investment, and that is why we have a 40-year high in our infrastructure investment. He is absolutely right that any spending increases the national debt. Because of the actions of the previous Labour Government, who spent 45% of GDP in the public sector and built up a huge debt, it is our responsibility to bring the debt down and make sure that the country gets back in balance.

[Ruth George (High Peak) (Lab)]

Bearing that strategy in mind, how does the Minister explain the fact that the debt has risen from 73% of GDP in 2010 to nearly 90% now, so it is higher than both France’s and Germany’s? Our debt was below those countries’ at the end of a Labour Government who had invested in public services, bailed out the banks and saved people’s savings.

[Elizabeth Truss]

I find it absolutely astonishing that the hon. Lady would say that, given that her party is planning to spend half a trillion pounds, increasing our debt. She has obviously not read the speeches of the shadow Chancellor and the shadow Chief Secretary. The 20% increase in debt that Labour is proposing would make us much more vulnerable to external shocks. The fact is that we have spent the past eight years repairing the damage done to the economy by profligate spending by Labour Members who did not fix the roof while the sun was shining.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Does my right hon. Friend recall that the previous Labour shadow Chancellor accused the Government of going too far, too fast? He thought that throughout the period of austerity we should have been spending more, leaving us with even further debt. The Government are to be commended for their robust approach.

[Elizabeth Truss]

I thank my hon. Friend for making that point. Labour Members seem to believe that by spending more money and borrowing more, we can reduce debt. That simply does not add up. Under Labour’s plans, we would be vulnerable to an external crisis, as we were when it was last in office in 2009. The Labour party seems to welcome that prospect. The shadow Chancellor said that the 2008 economic crash was a “capitalist crisis” for which he had been waiting for a generation. We have a Labour party that is actively planning a run on the banks if it gets into office.

[Ruth George]

Will the right hon. Lady give way?

[Elizabeth Truss]

I have already given way to the hon. Lady.

Ten years ago, under Labour, we were in the grip of a financial crisis and scared for the future. It was a period of profligacy, when Labour was spending money we did not have. The state was 45% of GDP, and we saw the longest increase in debt since the Napoleonic wars. It crowded out the private sector, and youth unemployment was on the rise.

We have worked away at the deficit, replenished the public purse and got people back into work, and all while maintaining Britain’s world-class public services. This report shows our sound public finances and our growing economy. [Interruption.] It is a shame that those on the shadow Front Bench seek to talk down our excellent public services. What this debate shows us is that it is vital we stick to the course.

Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 17th April 2018 Commons Chamber

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

4. What discussions he has had with the Secretary of State for Housing, Communities and Local Government on the adequacy of funding for children’s services.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

In 2016-17, local authorities spent £11.9 billion on children’s services and childcare support, and we have seen child development outcomes improve significantly since 2013.

[Tracy Brabin]

With the number of young people subject to child protection inquiries rising by 140% in the past decade, it is deeply troubling that by 2020 there will be a £2 billion funding gap in children’s services. The Minister knows as well as I do that local authorities are crying out for more support, so what urgent funding can she now make available to protect these vulnerable children?

[Elizabeth Truss]

First, we have actually increased the spending for the most vulnerable by £1 billion since 2010. That is funding for the most vulnerable through local authorities. I would point out to the hon. Lady that the important thing is the outcomes we are achieving. The fact that child development outcomes have improved since 2013 and that more children are getting that good level of development shows that we are investing our money in the right areas.

[Huw Merriman (Bexhill and Battle) (Con)]

There can be no greater service to children than that provided by our teachers. The Chancellor has been very generous in funding a pay rise for NHS staff outside the NHS budgets. What discussions have been had with the Department for Education to see if the same offer can be afforded to teachers?

[Elizabeth Truss]

It is very important to point out that the agreement with NHS workers and NHS unions has been in exchange for productivity improvements. We are altering the contracts to make them more effective, helping the people in these jobs to achieve more at the same time as giving them a pay rise. The situation in schools is different. Headteachers have much more power over what they pay individual teachers. In fact, last year teachers got an average pay rise of 4.6%, including promotions, so headteachers do have that flexibility to make decisions about what is best for their school.

[Sarah Jones (Croydon Central) (Lab)]

Can the Minister explain why, when we face a national epidemic of knife crime and serious youth violence affecting more and more children in this country, the Treasury failed to provide one penny of extra resource for the Government’s new serious violence strategy, which will now be funded by £40 million of cuts to an already overstretched Home Office?

[Elizabeth Truss]

I point out to the hon. Lady that real-terms spending in the Home Office is going up. We are funding the Home Office, but the important thing is what we do with that money, and that is why the Home Secretary has outlined the serious violence strategy to deal with that issue.

[Jack Brereton (Stoke-on-Trent South) (Con)]

5. What steps he is taking to invest in the infrastructure of small and medium-sized cities.

--- Later in debate ---

[Mr Peter Bone (Wellingborough) (Con)]

6. How much his Department has spent on preparing for the possibility of no deal with the EU when the UK leaves the EU.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

I am pleased to tell my hon. Friend that in the spring statement we allocated £1.5 billion to make sure that we are prepared for all eventualities in the European negotiations.

[Mr Bone]

I am grateful to the deputy Chancellor for her response. Has she had an opportunity to look at table 4.28 in the Office for Budget Responsibility report accompanying the autumn Budget, which shows a Brexit dividend of £55 billion in the four years between 2019 and 2023? Does the deputy Chancellor agree with her own figures showing that leaving the EU will be a great economic benefit to this country?

[Elizabeth Truss]

I thank my hon. Friend for his question. There is indeed money that will be released as a result of our leaving the European Union. We are working on the spending review, which will take place next year, and part of the job of that spending review will be looking at how we allocate that money domestically.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

24. Many of my constituents work in the financial sector —the financial services sector, specifically. Does the Chancellor not recognise that the closest possible alignment with the single market is the best possible outcome for this vital sector?

[Elizabeth Truss]

My right hon. Friend the Chancellor recently made a speech outlining the future of financial services and making sure we get the best possible deal with the European Union. Let us remember that London is a global financial centre—it was recently rated the best in the world—and as well as getting the best deal with the EU, we need to make sure that we can trade with the rest of the world.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

It seems to me that over recent months the UK has changed its position from negotiating the final deal before the transition period to negotiating the final deal during the transition period. Is not the reality that the British Government’s negotiating position will be considerably weakened once we have left the EU?

[Elizabeth Truss]

We have made huge progress in the European negotiations. We are seeing business confidence increasing and investment increasing, and by this autumn we should have agreed a clear framework with the EU so that businesses have certainty about future investment.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The UK’s economic growth in the final quarter of 2017 was the weakest of any economy in the G7, and the OBR is forecasting that the UK is on course for our worst period of economic growth since the end of the second world war. However, none of these already dire forecasts factors in a no-deal Brexit, which would have a severe impact on jobs, growth and tax revenues. We know the Chancellor knows this; indeed, he has said so publicly. The question is: why are his colleagues not listening to him?

[Elizabeth Truss]

It is very important that in the negotiations with the European Union we always keep the option of no deal on the table; otherwise, we will not get the best possible deal. But we are very confident of achieving a good deal. Why is the hon. Gentleman not welcoming the fantastic economic news we have had this morning: the lowest unemployment—again—since 1975, and wages up by 2.8%? It seems to me that there are an awful lot of Eeyores on the Opposition Benches.

[Johnny Mercer (Plymouth, Moor View) (Con)]

7. What assessment his Department has made of the effect of the introduction of the national living wage on low pay.

[The Chief Secretary to the Treasury (Elizabeth Truss)]

The national living wage has increased levels of pay. In fact, we have seen the wages of the lowest fifth of our population in terms of earnings increase by 7% in real terms since 2015.

[Johnny Mercer]

My right hon. Friend will know that the two biggest policies that have put more money into the pockets of the lowest earners in this country have come from this Government—namely, the increase in the tax threshold and the minimum wage. What more will the Government do to make sure that private businesses, together with public services, are working to continue to increase wages and improve the quality of life in cities such as Plymouth?

[Elizabeth Truss]

My hon. Friend is absolutely right: we need to increase productivity, which will help drive up wages. That is why we are working with employers on the national training scheme, and why we are increasing our investment in areas such as maths and computer science to make sure that our young people have the skills for the future that will enable them to earn high wages and compete with the rest of the world.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The national living wage applies only to people over the age of 25, yet the cost of living in places such as Stoke-on-Trent is the same for people under the age of 25: there is no discount on their rates, mortgage or utility bills. Do the Chancellor and his Ministers think it is fair that these people are expected to earn less when their living costs are not affected?

[Elizabeth Truss]

What is unfair is the fact that, under the last Labour Government, youth unemployment went up to 20% and those young people were left on the scrapheap, whereas we have reduced youth unemployment by 40%. We have more young people in work earning the vital skills for their future.

[Sir Desmond Swayne (New Forest West) (Con)]

21. Despite this increase in the price of labour, why is unemployment continuing to fall, particularly youth unemployment?

[Elizabeth Truss]

My right hon. Friend is right, and the reason is that we have taken the time to reduce the deficit to make it easier for employers to take on staff. We have reduced corporation tax, making it easier for companies to hire people. That is why we have the lowest unemployment since 1975, and rising wages. It is a shame that Members on the Opposition Benches cannot acknowledge that massive achievement.

[Alison Thewliss (Glasgow Central) (SNP)]

It is completely unacceptable that a 17-year-old and a 25-year-old starting on the same day in the same job face a £3.63 gap due to their ages. When will the Chief Secretary end the scandal of state-sanctioned age discrimination?

[Elizabeth Truss]

It is extremely worrying that those on the Opposition Benches would rather see young people out of work and without opportunities than in work, learning and getting the skills for their future. All the evidence shows that if we set the rate too high we see youth unemployment, which is exactly what happened under the previous Labour Government.

[Mr Alister Jack (Dumfries and Galloway) (Con)]

9. What assessment he has made of the effect of the recent reduction in corporation tax on employment and wages.

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[Ellie Reeves (Lewisham West and Penge) (Lab)]

T8. The housing crisis has gone on for far too long under this Government. Lewisham’s Labour council is about to build its 500th new council home since 2015, but many people still come to my surgeries because they reside in temporary accommodation. Will the Chancellor now commit to reversing the 63% cut in funding to the council’s budget so that Lewisham can get on with building more homes?

[The Chief Secretary to the Treasury (Elizabeth Truss)]

First, we have committed to building 300,000 homes per year over the next decade, which is vitally important to address the issue. Also, when we came into government, 80% of local government funding was being provided centrally, but we have now enabled local councils to raise that money. That is the right thing to do—people vote locally and councils should be accountable locally.

[Mr Marcus Jones (Nuneaton) (Con)]

We have heard encouraging news today about wages, but what more can Ministers do to help my constituents with the cost of living?

--- Later in debate ---

[Alex Burghart (Brentwood and Ongar) (Con)]

Last year, more businesses were created in the UK than in any other developed economy. Does that not show that the Government’s policy towards businesses is working, and what will the Treasury do to build on that success?

[Elizabeth Truss]

My hon. Friend is absolutely right that a record number of businesses are starting. We saw double the amount of investment in tech companies last year compared with the previous year. Britain is booming, and that is because we have taken the important measures of reforming our welfare system, making it easier to take on staff and reducing corporation tax. The Labour party wants to stop all that, raise taxes and make it harder for businesses to succeed.

[Anna McMorrin (Cardiff North) (Lab)]

The Government’s green rhetoric is nothing more than empty promises. They say that they have ambition, so when will the Chancellor commit funding for onshore wind, solar and, importantly, the Swansea Bay tidal lagoon? The benefits of these investments would boost not only our green economy, but the supply chain and jobs.

--- Later in debate ---

[Tonia Antoniazzi (Gower) (Lab)]

Six in every 1,000 people in the UK have lymphoedema. What commitment will the Government make to deliver a comprehensive and equitable strategy for NHS England and to end the postcode lottery for lymphoedema patients in the United Kingdom?

[Elizabeth Truss]

That is a question for the Secretary of State for Health, but I would point out that we are putting extra funding into the health service, including an extra £10 billion to help with nurses’ pay and to ensure that we are investing in the technologies for the future.

[James Cartlidge (South Suffolk) (Con)]

The shadow Chancellor mentioned frozen Syrian assets. There has been a long-running cross-party campaign to unfreeze frozen Libyan assets so that that money can be spent compensating the victims of Libyan-sponsored IRA terrorism. Will my right hon. Friend look at that again? Is he aware that it would require a UN resolution? Is that the case with Syria’s assets, and does he think that all the members of the UN Security Council would be in favour of such a move?

--- Later in debate ---

[Jamie Stone]

Thank you, Mr Speaker. One way to boost the UK’s productivity is to give disabled people employment opportunities. Can the Chancellor of the Exchequer tell me what discussions he has had with the Department for Work and Pensions and possibly the Scottish Government about maximising the potential of our disabled people?

[Elizabeth Truss]

The hon. Gentleman is absolutely right to say that getting more disabled people into work is vital for our economy and also for helping with their quality of life. I am very happy to look at what he has suggested.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Last year, the Department of Health announced £7.8 million for building a cancer unit in my constituency, which of course I was delighted about. However, the money is stuck in the Treasury and the Humber NHS Foundation Trust is unable to withdraw it in order to start the building work. Please can the Minister urgently unlock that money so that the trust can start to build that desperately needed cancer unit straight away?

[James Frith (Bury North) (Lab)]

In Bury, a small business and its supply chain are still owed £4.1 million by Carillion for their work on the Royal Liverpool Hospital. Will the Chancellor agree to meet me and them to hear their ideas about how we can prevent the likes of the Carillion collapse from happening again and protect our small employers from the changes in the construction industry?

[Elizabeth Truss]

The important thing about the issues with Carillion was that, first, we made sure that public services operated, and that, secondly, we did not give rewards for failure in a company that went bust. I would be very happy to look at the specific situation that the hon. Gentleman has outlined and to meet him.

[Mr Speaker]

A sentence without subordinate clauses from Mr David Linden?