Finance (No. 2) Bill

Elizabeth Truss Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Peter Dowd]

First, we did not regulate the banks in the United States, where it all started. I ask the hon. Gentleman—I have said this a number of times—to go and look at “Freeing Britain to Compete,” the document produced by the right hon. Member for Wokingham (John Redwood) for the shadow Cabinet in, surprisingly, August 2007.

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

They were not the Government.

[Peter Dowd]

“They were not the Government” is shouted across the Dispatch Box, but that brings me to the point I am making. The bottom line is that chapter 6 of “Freeing Britain to Compete” called for significantly less regulation of the banks. As I have said before, the right hon. Member for Wokingham effectively said in that document that the Labour Government at the time believed that, if we did not regulate the banks, they would steal all our money. Many people out there believe that that is, in effect, what happened. The taxpayer had to bail out the banks. Why did the taxpayer have to bail them out? Because of the lack of regulation. The shadow Cabinet at the time ratified a policy of less regulation. If we had followed the right hon. Gentleman’s exhortations, as ratified by the shadow Cabinet, we would be in an even worse state. I ask the hon. Member for Brentwood and Ongar (Alex Burghart) to go and have a look at that one.

Cash Ratio Deposits

Elizabeth Truss Excerpts

Monday 18th December 2017 Written Statements

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

Cash ratio deposits (CRDs) are non-interest bearing assets deposited with the Bank of England by banks and building societies. They are used by the Bank to finance its policy functions, in particular its efforts to secure price stability and the stability of the financial system in general, from which these institutions are key beneficiaries.

The CRD scheme was extended to include building societies, and was placed on a statutory basis, when the Bank of England Act became law in 1998. The scheme has been reviewed every five years since. The last review in 2013 resulted in the CRD ratio being increased from 0.11 % to 0.18%, following a public consultation. As part of the 2013 review, the Government committed to reviewing the scheme again within five years. The Treasury, working closely with the Bank, will now begin that review.

The review will include an assessment of the detailed arrangements of the scheme as well as the continuing suitability of the scheme itself compared to alternative sources of funding. It will also address the impact of the scheme on the eligible institutions. The broad conclusions of the review will be the subject of a public consultation.

[HCWS361]

ECOFIN

Elizabeth Truss Excerpts

Friday 1st December 2017 Written Statements

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

A formal meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 7 November. European Finance Ministers discussed the following items:

European Free Trade Association (EFTA) dialogue

In their annual meeting, Ministers met with representatives from the EFTA group of countries to exchange views on how best to make economic growth inclusive.

Early Morning Session

The Eurogroup president briefed Ministers on the outcomes of the 6 November meeting of the Eurogroup, and the Commission provided an update on the current economic situation in the EU. Ministers decided that Pilar Jurado Borrego, director-general of Spanish customs, is to be the EU’s single candidate for the position of secretary-general of the World Customs Organisation. Ministers were also debriefed by the Economic and Finance Committee (EFC) chair on the EFC’s discussion of the single supervisory mechanism review.

VAT e-commerce package

Ministers considered the various items which make up the VAT e-commerce legislative package.

Review of the European System of Financial Supervision

The Commission presented its legislative proposals on financial supervision to Ministers. This was followed by an exchange of views.

Current Financial Services Legislative Proposals

The Council presidency provided an update on current legislative proposals in the field of financial services.

Insolvency

The Commission presented its proposals on resolving existing non-performing loans, preventing the build-up of future non-performing loans, and measures to increase the efficiency of the general insolvency framework in member states.

Follow-up to the G20 Meeting of Finance Ministers and Central Bank Governors and of the IMF Annual Meetings in Washington

Minsters received information from the presidency and the Commission on the outcomes of the 12-15 October G20 and IMF meetings.

European Court of Auditors’ annual report

The president of the Court of Auditors presented the auditors’ report on the implementation of the budget of the European Union for the 2016 financial year.

Statistical package

The Council discussed the autumn statistical package and reviewed progress achieved, and Ministers exchanged views on the prospects for European co-operation on statistics. Council conclusions were also approved.

[HCWS300]

Exiting the EU: Costs

Elizabeth Truss Excerpts

Wednesday 29th November 2017 Commons Chamber

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

(Urgent Question): To ask the Chancellor of the Exchequer to update the House on the expected costs of exiting the European Union.

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

Our negotiating team is currently in Brussels discussing our exit from the European Union—in fact, our officials have been working on it for months. It would be completely wrong of me to cut across those discussions by commenting on speculation about the financial settlement, and it would not be in our national interest.

The Prime Minister made it clear in her Florence speech that EU member states would not need to pay more, or to receive less money, over the remainder of the current budget period as a result of our decision to leave. She also made it clear that, in the spirit of our future partnership, the UK will honour its commitments made during its period of membership. As we have said before, nothing is agreed until everything is agreed. Any settlement that we make is contingent on us securing a suitable outcome, as outlined by the Prime Minister in her Florence speech. We will meet our commitments and also get a good deal for the UK taxpayer.

We want to see progress towards our preferred option, which is an implementation period followed by an ambitious future economic partnership. In the Budget, we have set aside £3 billion, in addition to the £700 million that we have already allocated, to make sure that our country is fully prepared for all eventualities. What we have seen today is simply media speculation. We will update the House when there is more detail to give.

[Mr Leslie]

The British people were promised a dividend from Brexit. They were told that leaving the EU would save us a fortune. Those who campaigned for Brexit daubed their hubris across the side of a giant red bus, promising a windfall of £350 million every week for the NHS. That was not just a whopping lie, but the direct opposite of the truth.

Will the Chief Secretary confirm that if the divorce bill comes in at somewhere between £40 billion and £67 billion, as is speculated, that could be a payment of £1,000 from every man, woman and child in this country? Is this speculated divorce bill not just the tip of the iceberg? If we are being honest about the true costs of Brexit, should we not also add in the lost revenues to the Exchequer set out in the Red Book—something in the order of £20 billion by 2021—the £3.7 billion of Brexit preparations for all the duplicated agencies, new border arrangements, lorry parks in Dover and so forth, and of course the higher cost of living for all of our constituents as prices keep on rising?

How do the Chief Secretary’s constituents react to the idea that they will be lumbered with all these extra costs? Do they not ask her, “What exactly are we getting for this? What wondrous new advantages will we gain by shelling out these astronomical sums?” Will she not be straight with the House that we are paying for the privilege of putting the world’s most efficient free trade, tariff-free, frictionless agreement into the bin, and being told to pay for the privilege of downgrading to an inferior deal with our European neighbours? Why is she being so coy about the deal that is being done? The Government have gone from “go whistle” to “where do we sign?”

In a week when the Government will still not fully publish the Brexit impact assessment papers to this House, we are now hearing rumours that Parliament and the public may never be told the full amount. When will Parliament be told what is actually happening and will we get a vote on the sums of money involved? Will the Chief Secretary, right here and right now, scotch this nonsense that the true costs of Brexit will be hidden away in a convenient backroom deal in the negotiations? The British people need to know whether there is a deal and how much the Government have put on the table in the negotiations. If she will not tell us, why does she think that the only people who cannot be told are the British public and the British Parliament? This is not what the British public voted for in the referendum. It is not taking back control; it is losing control.

[Elizabeth Truss]

I can tell the hon. Gentleman what my constituents say: “The country has voted to leave the European Union.” What they want to see is us getting on with that and securing the best possible deal for Britain. If we look at the Opposition Benches, we can see Members who, like the hon. Gentleman, voted to stay in the single market and the customs union, and we also see Opposition Front Benchers who voted to leave the single market and the customs union. Today we read that the shadow Home Secretary wants a second referendum. That is not remotely helpful in securing the best possible deal.

The hon. Gentleman knows perfectly well that we are in negotiations as we speak. If we were to talk about numbers and aspects of the deal in this House, we would be cutting across our negotiating position. The people of Britain want us to get on with it, to take the advantages of leaving the European Union, to make the most of the opportunities and to secure the best possible deal. We are well on the way to doing that. I suggest that, rather than trying to refight the referendum battle, which is exactly what the hon. Gentleman seems to be doing, he needs to get with the programme and to start talking about how he can be helpful.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend agree that no Government of any EU member state could possibly be expected to agree that we should have a good future trade and economic relationship with the European Union while, at the same time, we repudiate all our past financial obligations and somehow refuse to pay a fair share of the costs of agencies and so on that will be incurred in the future? Does she therefore agree that those who oppose paying any money presumably want a no-deal Brexit, which would be catastrophic for this country, and would stop the opportunity that my right hon. Friend the Secretary of State for Exiting the European Union has of negotiating a deal that retains as many benefits as possible for jobs, investment and the growth of this country’s economy?

[Elizabeth Truss]

As the Prime Minister laid out in her Florence speech, we do want to abide by the commitments we made during our period of membership, and we also want to see progress on securing a deal. My right hon. and learned Friend is right that any settlement that we seek to achieve has to be contingent on getting a suitable outcome from the negotiations, as has been outlined by the Prime Minister, because we want to ensure that any money spent is value for money for the British taxpayer.

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

I thank my hon. Friend the Member for Nottingham East (Mr Leslie) for raising this critical question.

As we all know, settling this issue is vital to continuing to the next part of the negotiations. Given that progress has been so much slower than we would have hoped, the Opposition support efforts to resolve this part of the negotiations as soon as is feasible, so that we can start to make progress to end the uncertainty that is impacting on jobs and the economy.

The financial settlement with the EU must meet our international obligations while delivering a fair deal for British taxpayers. The UK is a responsible country and there is no mileage in our refusing to meet our obligations. If we are to negotiate a comprehensive new trade agreement with the European Union, which we will need for future jobs and prosperity, we must be seen as a country that can be trusted to comply with the deals that we reach.

Given our long-standing membership of the European Union, the calculation will understandably be complex. Given that this is a sensitive part of the negotiations, we appreciate that the Government cannot announce a figure publicly at this stage, but they must be transparent about the process, especially once an understanding has been reached with our EU partners. That is why we have tabled an amendment to the European Union (Withdrawal) Bill that calls for any financial settlement to be assessed by the Office for Budget Responsibility and the National Audit Office, and for Parliament to have the chance to scrutinise it. The Government’s handling of the presentation of the impact assessment studies to Parliament has left a lot to be desired, so may I ask the Chief Secretary to the Treasury to promise that, in the interests of transparency and clarity, the Government will support that amendment?

[Elizabeth Truss]

I thank the hon. Gentleman for his supportive comments. I am glad that he agrees with the Government’s strategy. The next step will be making sure that his Back-Bench colleagues also agree with his strategy. He is absolutely right that we should not reveal the details of negotiations while they are ongoing. However, the Opposition’s approach of saying that any deal is better than no deal is not the best way of securing a deal. Although our preferred option is an implementation period followed by a strong agreement, we are preparing for all eventualities, which is why we are putting in £3 billion. I suggest that the Opposition should also support that very responsible approach.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I am not in favour of anything that is not legal, so I support my right hon. Friend completely. I am also in line with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), in that whatever the legal agreement is, bound against the contingency of a free trade arrangement, it is exactly what the Government will set out to do. Will the Chief Secretary please remind those who have raised this question that even if we agreed a figure of something in the order of £40 billion over 40 years, because we will not be paying contributions to the European Union, it means that the UK Exchequer will be better off by £360 million in the course of those 40 years—a net gain, with a free trade arrangement?

[Elizabeth Truss]

My right hon. Friend makes a very fair point. Whatever happens, we will not be paying anything like what we would have paid as an EU member. That represents a considerable saving to the British taxpayer.

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the hon. Member for Nottingham East (Mr Leslie) for bringing this matter to the House.

There would be no newspaper rumours about the sum if the Government actually told us what the sum was. Nobody voted for this disastrous, disorganised EU exit. People voted for £350 million a week for the NHS, not to spend £40 billion or £50 billion just to be worse off. Our public services must not pay the price for this Brexit mess. It surprised us all when the Prime Minister found a magic money tree earlier this year, so surely the Government cannot have been lucky enough to find two. Given that last week’s Budget did not make provision for this £40 billion or £50 billion, will the Chancellor now bring forward an emergency Budget to explain where he is finding the money?

[Elizabeth Truss]

When the hon. Lady stood up, I thought that she was going to thank the Government for the £2 billion additional spending power that we gave to the Scottish Government in the Budget, which they will no doubt be able to use to improve their public services. As I have said before—and, indeed, as has been pointed out by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds)—talking about the money now would cut across the negotiations and prevent us from getting the best possible deal. That is not in anyone’s interests.

[John Redwood (Wokingham) (Con)]

I am glad that the Government have confirmed today that they are carrying on with comprehensive preparations for no deal, because it is very important that we are not up against the clock at the end and forced into a bad deal because we have no alternative. Will the Chief Secretary confirm that no deal has the great advantage of no payments whatever under the divorce bill heading, meaning that when the Government recommend a deal, it has to be visibly better?

[Elizabeth Truss]

My right hon. Friend is correct. It is irresponsible for Opposition Front Benchers to suggest that any deal is better than no deal. That is the way that we will not get our preferred option, which is an implementation period plus our preferred economic partnership. We are allocating £3 billion to ensure that we are prepared for all eventualities.

[Hilary Benn (Leeds Central) (Lab)]

The United Kingdom is currently a member of a large number of EU agencies, from that dealing with aviation safety to the European Medicines Agency. Have the Government made an assessment of the likely cost to the Exchequer of having to replicate all those functions and activities, if they eventually decide that we have to leave all of them because of their stated principled objection to the European Court of Justice having any jurisdiction over the United Kingdom?

[Elizabeth Truss]

I have been very clear with the House that we are preparing for all eventualities. Of course, looking at the specifics of those agencies is a part of that.

[Mr David Jones (Clwyd West) (Con)]

As my right hon. Friend pointed out, the Prime Minister made a fair and generous offer to the European Union in her Florence speech. Given that article 50 provides that the negotiations that are under way should take account of the future relationship between the United Kingdom and the European Union, does my right hon. Friend agree that it is high time that the European Union reciprocated and started adhering to its obligations under the treaty?

[Elizabeth Truss]

As my right hon. Friend points out, it is important that we move on to the next stage of the negotiations and talk about our long-term relationship with the European Union once we have left. That is exactly what we seek to do.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The problem with the Chief Secretary’s answer is that all our constituents saw the slogan on the side of a bus. If the Government simply say nothing—if they keep radio silence for a long time—and then suddenly pluck a figure out of a hat at the end of the process, it will just be incomprehensible to everyone. Surely she can tell the House the kinds of things that the Government think they should be funding—pension contributions or whatever else—rather than just leaving everyone in the dark.

[Elizabeth Truss]

I refer the right hon. Lady to the Prime Minister’s Florence speech, in which she laid out the commitments that we want to continue to honour, in the spirit of our future partnership, after we have left the European Union. The right hon. Lady has to be aware that this is part of a discussion that is also about our future relationship, and all those elements are contingent on securing our future relationship, as the Prime Minister laid out in her Florence speech. It would be wrong at this stage—from the point of view of not only the negotiations, but transparency to the public—to lay out something before it is fully agreed. That would not be helpful.

[Mr Owen Paterson (North Shropshire) (Con)]

To cheer up the miseries on the Opposition Benches, perhaps they would like to look at the prospective budget published by Economists for Free Trade in the week before the Budget. It is a really exciting prospectus that says that our economy will grow at 3% a year by 2025, providing an infrastructure surplus of £60 billion, which easily covers the £18.2 billion a year for the famous £350 million. But that is contingent on reciprocal free trade with zero tariffs, so will my right hon. Friend guarantee that there will be no legally binding commitment to spend money until our partners agree to a serious free trade deal that is based on reciprocal free trade and zero tariffs?

[Elizabeth Truss]

I fear that my right hon. Friend is over-optimistic if he thinks we can stop Opposition Members from being miserable. We tried that over four days of Budget debate, but we have been unsuccessful so far. He is absolutely right to talk about the benefits of free trade for the British economy—I completely agree with him. We are seeking a good deal that benefits the UK in the long term.

[Tom Brake (Carshalton and Wallington) (LD)]

At least £45 billion, higher inflation and debt, an extra year of cuts, and less influence in the world are the price that the Government are willing to pay for a deluded vision of Great Britain post Brexit. Is there any level of damage that the economy, jobs and families in the UK would have to sustain that would cause the Government to rethink and give the people a vote on the deal? That would be supported by the Liberal Democrats and Sadiq Khan, the London Mayor—and, as I understand it now, the shadow Home Secretary.

[Elizabeth Truss]

I see, regrettably, that the misery has spread to the Liberal Democrats; there seems to be a contagion on the Opposition Benches. I invite the right hon. Gentleman to welcome the fact that this country has the lowest unemployment in 40 years. We also have the third highest number of start-ups in the world—a record number for this country—and the other positive benefits that we are seeing due to the actions of this Conservative Government.

[Mr John Baron (Basildon and Billericay) (Con)]

Most of us—certainly those of us on the Conservative Benches—accept that a good trade deal is better than no deal, that there is always give and take in a negotiation, and that it is important that we meet our financial commitments. However, does the Minister accept that this issue is largely a storm in a teacup, because nothing is agreed until everything is agreed? It is important to make that point and not to listen to the few siren voices who still refuse to accept the result of the referendum.

[Elizabeth Truss]

My hon. Friend is right. Regrettably, there are people—particularly on the Opposition Benches—who still do not seem to accept democracy and that fact that people did vote to leave the European Union.

[Chris Bryant (Rhondda) (Lab)]

The thing is that the Government are keeping their cards so close to their chest that I suspect they have not even looked at them themselves. For that matter, the left hand certainly does not know what the right hand is doing, because the Minister is obviously making it clear that we are going to pay lots of money for a no-deal outcome, yet the Foreign Secretary boldly and quite confidently told this House that our foreign counterparts could “go whistle”. What was he suggesting that they should whistle—“Stand and deliver your money or your life”?

[Elizabeth Truss]

The hon. Gentleman will be aware that considerable work is taking place across Government, but it would be wrong to cut across our negotiators in the deal they are seeking to strike. It is in our country’s interests to reach the point where we are talking about our long-term economic relationship with the European Union.

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

My right hon. Friend should not pay more than we owe, but she should be confident that, whatever that is, it is a bargain against the cost of staying in.

[Elizabeth Truss]

My right hon. Friend makes a good point. Were we to stay in, the costs would be considerably higher than any amount we are talking about as part of our negotiations.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The Government are so intent on keeping information they have about Brexit secret that they are actually risking contempt of Parliament. As this even more secret financial settlement is negotiated, how can we be sure that it really represents the national interest?

[Elizabeth Truss]

As I have pointed out already, these negotiations are not yet complete—there is not a number that we can disclose to the House. Absolutely, when there is one, and when there is more detail to give, we will come to the House and talk about it.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that, following a good Budget, and given the need for good housekeeping and the pressures on public spending, if the impression is given that we have wads of cash when it comes to Europe, that undermines our arguments on the public sector and on the need for good housekeeping, especially since the House of Lords says that we have no legal financial obligations? Does she not also agree that this is not a divorce bill? We are leaving a club, and once someone leaves a club, they no longer have to pay subscriptions.

[Elizabeth Truss]

First, we were able to make sure that we stuck within our fiscal rules at the Budget, making sure that debt is falling as a proportion of GDP for the first time in 13 years, and keeping within our deficit targets. At the same time, we were able to freeze fuel duty to help ordinary working people, who need to keep their living costs down. We were able to do all those things. The reality is that, as we leave the European Union, we will no longer be paying those vast sums in, and that will represent a benefit to the taxpayer.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is the Minister aware that 70% of the people who voted in Bolsover voted to leave? But let me also say this to her: those same people in Bolsover, I believe, would expect me to tell the right hon. Lady from the finance Department that if the Government have £60 billion to spare, it should go to the national health service and social care.

[Elizabeth Truss]

The hon. Gentleman will be well aware that, as part of last week’s Budget, we were able to put additional money into the national health service—into hospital capital and making sure we hit our A&E targets—and we are also allocating money to help with nurses’ pay. The hon. Gentleman will no doubt be pleased about that.

[Dr Julian Lewis (New Forest East) (Con)]

These negotiations remind me of the even more complex ones on arms reductions in the 1980s. Will the Minister bear it in mind that the lessons of those negotiations were, first, that too many one-sided concessions project an image of weakness and, secondly, that to get the very best deal, we often have to walk away first and wait for the other side to agree with us, come back, sit down and negotiate realistically?

[Elizabeth Truss]

It is because we need to make sure that the European Union is aware we have alternatives that we are preparing not only for our preferred option of a transition period plus a long-term economic agreement, but for a no-deal scenario. The Opposition want to give that option away, so we would not be able to have that discussion with the European Union.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

There are two salient features about the news that is emerging. The first is that this is the opposite of what was promised during the referendum. We were promised £350 million a week more, and now the Government are set to pay up to £50 billion, when our constituents urgently need money for health, housing, policing and much more. But, secondly, what is it that we are paying for? Other countries pay significant sums to get into the single market; we are lining up to pay up to £50 billion to leave the single market. Is not the tragedy that these huge sums are going to pay for a worse deal than we have at present? That is hardly strategic genius.

[Elizabeth Truss]

It is absolutely right that the UK honours its commitments in the spirit of our future partnership, but as I have said before, nothing is agreed until everything is agreed. We will expect to make progress and secure that long-term economic partnership, which will be to the benefit of UK citizens.

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

Will my right hon. Friend note the growing concern at the fact that Her Majesty’s Government seem in these negotiations to be dancing to the tune of the European Commission? Further to the question from my right hon. Friend the Member for North Shropshire (Mr Paterson), may I also ask whether she can be certain that, after 29 March 2019, we will make no payments to the European Union whatever in the absence of a full agreement covering trade?

[Elizabeth Truss]

I can assure my hon. Friend that we are not dancing to anyone’s tune. What we care about is the future of Britain’s economy, protecting the British taxpayer from excess payments and making sure we secure a good deal, which is why it is so important that we do not discuss these numbers while we are in the middle of a very important negotiation.

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

I have been informed by a former public finances auditor that international accounting standard 37, on provisions, contingent liabilities and contingent assets, requires the UK Government to account for the divorce payment as expenditure in their public finances—even if the exact amount cannot be calculated. Given that the Government accounts for 2016-17 did not adequately disclose the potential liability, as required by IAS 37, will the Minister give assurances that a liability of this magnitude will now be included in the supplementary estimates for 2017-18 and that that provision will be subject to a vote of this House?

[Elizabeth Truss]

That would be wrong according to accounting principles, because nothing has been agreed. The Office for Budget Responsibility followed the Prime Minister’s Florence speech in laying out its projections for the Budget. I suggest to the hon. Gentleman that he has misinterpreted those standards.

[Philip Davies (Shipley) (Con)]

Will my right hon. Friend confirm that she agrees that the UK should pay the EU what we are legally obliged to pay—not a penny more and not a penny less? If so, will she make sure that, before this House votes on the final bill, we have an itemised account of exactly what we are paying for at the end, and also the legal basis on which we are making those payments? I have to say that the hon. Member for Bolsover (Mr Skinner) is absolutely right: if there is any spare money going at a time of austerity, it should be directed to our priorities in the UK; we should not give it as a bung to the European Union, which we are not legally obliged to do.

[Elizabeth Truss]

I can assure my hon. Friend that we are determined to get the best possible deal for the British taxpayer, and we need to look at the deal in the round to see what represents value for money. Absolutely, the money should be spent on our public services and on keeping taxes low for our hard-working citizens.

[Helen Goodman (Bishop Auckland) (Lab)]

Last week, the Treasury published the Red Book, which showed that there would be no more payments to EU institutions from 2019. It also said there was £15 billion of headroom and that debt would then fall. Does the news overnight not show that there is a £30 billion hole in the public finances and that there is no possibility of debt falling on that timescale?

[Elizabeth Truss]

The hon. Lady is not correct about that. The OBR has made predictions on EU payments and those are included in the Budget. Indeed, that was raised by my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) in the Budget debate last week.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Will the Chief Secretary please confirm that any payments that are offered will be itemised, so that Parliament can understand the constitution of the payment and put it into the context of any likely conditioning that may be required in any deal on the future relationship?

[Elizabeth Truss]

I assure my hon. Friend that the payments that will potentially be made—as we have discussed, nothing is agreed until everything is agreed—will absolutely provide value for money.

[Stephen Timms (East Ham) (Lab)]

My hon. Friend the Member for Nottingham East (Mr Leslie) is right in his question to highlight the serious difficulties the country faces. I hope it is true that agreement has been reached on the costs of exit, so that the negotiations can move on to the next stage. Does the right hon. Lady agree that it is essential to the UK’s national interest that the European Council agrees at its meeting next month that enough progress has been made to move on to discussions about future trade?

[Elizabeth Truss]

We absolutely want to secure movement on to the next stage of the negotiations. That is very important. Ultimately, it takes the UK and the EU27 to agree on that. It would be wrong to take the approach of the Opposition and say that we would agree to any deal, regardless of what it was. We have to look at and prepare for all eventualities.

[Mr Shailesh Vara (North West Cambridgeshire) (Con)]

Does my right hon. Friend agree that the message to the doom-mongers must be that the British public have given their verdict and expect Parliament to deliver? The doom-mongers should recognise that we are the fifth strongest economy in the world and that our population is significantly greater than that of 15 EU countries put together. It is high time that they started talking Britain up, rather than talking it down.

[Elizabeth Truss]

My hon. Friend is right. The Opposition refuse to see any of the positive things that are happening in our country, whether it is the lowest youth unemployment rate for over 13 years or the highest number of new start-ups this country has ever seen. Great things are happening, so let us see a bit more optimism from the Opposition.

[Ian Austin (Dudley North) (Lab)]

People in the Black country voted to leave, but they were not told at any point that it could cost them £1 billion a week. They certainly were not told that it could make them worse off. If it is the case, as we have been told, that we will be much better off as a result of leaving and that there will be considerable savings, as the right hon. Lady promised a moment ago, will she promise that those savings will be used to replace the programmes that are currently funded by the EU, such as the crucial £50 million-a-year skills programme that operates in the Black country?

[Elizabeth Truss]

There will be savings once we leave the European Union, as I have made clear. We want to ensure that those savings are spent in the best interests of everybody in the UK to make our country as successful as it can be.

[Sir Henry Bellingham (North West Norfolk) (Con)]

The Chief Secretary will be very aware that her constituents and mine voted overwhelmingly to leave. Does she agree that it feels on the ground as though most people now want to get on with Brexit, but also that they expect the UK to be fair, generous and magnanimous, so long as the financial settlement is contingent on a free trade deal?

[Elizabeth Truss]

As my hon. Friend points out, the people of Norfolk are fair minded. They want the referendum result to be respected and they want to honour our commitments to the European Union, but they want that to happen in a way that is fair for Britain and British taxpayers and that ensures that we get the best possible deal.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The figures are astronomical. Is it not the case that the British public are already paying the costs of this Government’s approach to Brexit in the form of the £3 billion that the Chancellor announced in the Budget would be spent on Brexit contingencies and the more than £700 million that he has already shelled out? Should people not have been told about that before the referendum?

[Elizabeth Truss]

It is completely irresponsible of the Opposition to suggest that we should not prepare for all eventualities. It would be disgraceful for the Government not to do that. That would not be the proper action of a responsible Government.

[Mr Peter Bone (Wellingborough) (Con)]

For the first time in my parliamentary career, I agree with the hon. Member for Bolsover (Mr Skinner). He is absolutely right. The 60%-odd of people in Wellingborough who voted to leave would want to know what we were doing with £60 billion. They would want it to be spent on the NHS, social care and defence. They would not want it to be given to the European Union. Does the Chief Secretary agree that such a move would betray the trust of the British people?

[Elizabeth Truss]

The amounts of money we have read about in the press are speculation. The negotiations are ongoing and we want to secure value for money for the British taxpayer. It is in our interest to secure a long-term economic partnership with the European Union, but we will not pay over money until everything is agreed.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Page 25 of the Government’s brand new industrial strategy document states that the Government are seeking a transition—sorry, an implementation period—of “around two years”. Does the reported deal include provision to pay for an extended deal beyond two years?

[Elizabeth Truss]

The negotiations are taking place at the moment. We want to secure a reasonable transition deal, but we have to know what the future relationship will be like before we enter into the transition deal. The British public will not accept the can being kicked down the road. They want to know that we are leaving the European Union.

[Richard Graham (Gloucester) (Con)]

The greatest risk to the new partnership that both the UK and the EU want is that the EU makes such unreasonable demands that no British Government could accept them, on the wrong assumption that this House will never vote for no deal. Does my right hon. Friend therefore agree that all Members who want a good deal, like the hon. Members for Nottingham East (Mr Leslie), for Dudley North (Ian Austin) and for Cardiff South and Penarth (Stephen Doughty) and the right hon. Member for Wolverhampton South East (Mr McFadden), should make it absolutely clear to their constituents that they do not subscribe to the ludicrous idea that any deal is better than no deal?

--- Later in debate ---

[Elizabeth Truss]

I fear that Opposition Members have not made that logical leap yet, but I am sure that my hon. Friend’s question will have helped them reconsider in their own minds.

[Mr Gavin Shuker (Luton South) (Lab/Co-op)]

rose—[Interruption.]

[Mr Shuker]

Can the right hon. Lady name any moment in any aspect of the negotiations so far when the Government have gone head to head with the EU27 on an issue on which they have competing ideas about what to do and come out on top? Is this not yet another example of the Government crumbling and facing up to the reality of leaving the EU?

[Elizabeth Truss]

We are making continuous progress in our negotiations with the EU. Of course, in any negotiation there has to be give and take from both sides. That is exactly what is happening. However, it would be wrong to expose the details of the negotiations at this stage.

[Mr Philip Hollobone (Kettering) (Con)]

In any divorce, the assets are divided. Given that in today’s money—in real terms—our net contribution to the EU over the lifetime of our membership amounts to £209 billion, will my right hon. Friend make sure that we get our fair share of the EU’s assets when we leave?

[Elizabeth Truss]

I assure my hon. Friend that that consideration is part of our discussions.

[Daniel Zeichner (Cambridge) (Lab)]

Before making a big decision, it is generally sensible to inquire about the price. Most people will be staggered to learn that the average household in this country will be asked to stump up between £2,000 and £3,000 to pay for this. What plans do the Government have to tell people about the bill they are facing and to ask them whether they think it is a good use of their money?

[Elizabeth Truss]

The hon. Gentleman needs to look at both sides of the account, because we will not be paying ongoing vast sums into the EU as we are at the moment. He needs to look at the big picture.

Budget Resolutions

Elizabeth Truss Excerpts

Wednesday 22nd November 2017 Commons Chamber

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

I am sorry that I have not been in the Chamber for the whole debate, Mr Speaker. I have been at a meeting of the Exiting the European Union Committee debating one of our reports. We have been firmly excising split infinitives, and making sure that apostrophes appear in the right place and that Humble Addresses are preceded by the correct indefinite article. All those important matters took me away from the Chamber.

It is a pleasure to follow the hon. Member for Nottingham East (Mr Leslie), who is always so interesting on such matters, although we disagree very firmly about them. I thought it might be worth looking at how much better the figures are than they were expected to be. In the context of Brexit, we are always told that the end of the world is nigh, the writing is on the wall and all will be terrible, and yet when we look at the Red Book, the figures that we have had so far are better—in spite of the Treasury and others saying that it will all be a disaster. Paragraph 1.36 of the Red Book states:

“Borrowing in 2017-18 is £49.9 billion, £8.4 billion lower than forecast at Spring Budget 2017.”

Why? Because receipts are higher and more money is coming in, which is indicative of the economy’s strengthening. The following page indicates that that is down to spending decisions and tax decisions that have been taken in the Budget.

I have one specific question for Ministers on the Treasury Bench about the Red Book. This may have been raised by my hon. Friend the Member for Dover (Charlie Elphicke), but it is of considerable importance. Page 82, which I think is copied from page 114 of the OBR’s “Economic and fiscal outlook”, states that in 2022-23 there will be a £3.5 billion “own resources” contribution to the European Union. Now, I cannot believe that the wise figures in the OBR or in Her Majesty’s Treasury could have made the schoolboy error of just assuming that money paid out in one year would continue indefinitely, but it misses the point that we will have left the European Union by 2022-23, that the implementation period will have ended, and that the whole concept of “own resources” will have ceased to exist. It is rather like spotting an error in “Wisden Cricketers’ Almanack”, which is very rare, and indicates a failing that I hope will be put right. I hope that we will discover that it was unintended, because if it is intended, that means that we will not in fact be stopping our contributions to the European Union, which would be very strange. To have this described as “own resources” is even more peculiar, because that assumes that we are still members of the EU. I think there is an error there.

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

To respond to my hon. Friend’s point about the forecasts, they are made by the OBR. The OBR was provided with the Prime Minister’s Florence speech—the basis on which we are negotiating with the EU—and it is up to the OBR to make its own independent forecasts. My hon. Friend will have to speak directly to the OBR about that, but my understanding is that it has used an average of other independent forecasts.

[Mr Rees-Mogg]

I am grateful to my right hon. Friend, but I do not think that that quite works for the “own resources” figure, because the OBR has made assumptions relating to our net contribution to the European Union and has assumed that those moneys will be spent domestically in the United Kingdom, and that therefore there is no fiscal advantage. However, there is still a £3.5 billion negative income from “own resources”. It is hard to think that the OBR would have taken that from other forecasters, because that is a matter on which the Treasury can give an authoritative view, and it would be odd if the Treasury had not explained that “own resources” will end at the point at which we leave the European Union. They have to, because only member states of the European Union can make “own resources” contributions, for obvious reasons, although I have always disliked the term “own resources”, and I have always been with Margaret Thatcher in that it is our money and we would quite like to keep it, thank you very much.

All that ties in with a point made eloquently by the hon. Member for Islwyn (Chris Evans): the key to this Budget has to be Brexit. What we are doing currently is in the context of leaving the European Union, and this Budget is inevitably encompassed by Brexit and by productivity. That is where the challenge lies. The OBR’s gloomy productivity forecasts suggest a reduction in potential output in 2021-22 of 3%. The challenge for the architects of our economic future is how to make Brexit work to ensure that we get a productivity boost.

That is where I was so encouraged by what the Chancellor had to say about this Government being a free trade Government, and that the real opportunity that comes from Brexit is freely opening up our markets to the rest of the world. We must remember that the customs union, in which the hon. Member for Nottingham East is so keen to stay, is actually a protectionist union that stops people in the United Kingdom from buying the cheapest available goods and that, by and large, it protects industries that the UK does not have. The overwhelming majority of the protections under the customs union are for things such as German coffee processors or Spanish orange growers—the types of things that we are not doing. Our industries receive marginal protection from the customs union, but at a very high cost to British consumers—it is thought that the cost for food is 20%, and that the next highest level of tariffs is on clothing and footwear.

The opportunity for the poorest in our society to see their standard of living and real wages rise is quite fundamental. Their weekly, monthly and annual expenditure will be reduced and their real incomes will rise, making funds available for other expenditure, or indeed for saving and reinvesting in British industry. Equally, the loss of cosy protectionism means that we will cease to subsidise inefficient continental businesses. It will also ensure that we concentrate on what we are best at. That ought to lead, of itself, to a boost in productivity. Indeed, that is the lesson of history when we move to free trade and remove not only formal tariffs, but non-tariff barriers.

That, if the correct policies are adopted, is how the £350 million a week can ultimately be provided for the national health service. Figures produced by Professor Patrick Minford and his distinguished team at Cardiff University indicate that there will be a boon of £135 billion between 2020 and 2025, and £40 billion a year after that, which will make it possible to have tax cuts and to fund the health service. It is encouraging that the Chancellor has already started that process and is making more money available for the health service now, because it is important that politicians deliver on the spirit of their promises, as well as on the detailed, pettifogging, nitpicking, small-print elements. It is right that that should be made possible, and having a free trade development of economic policy will be crucial to that, so it was welcome that the Chancellor included it in his Budget statement.

The other issue of greatest importance to voters is that of housing, and here I would encourage the Chancellor to go further. The Government are absolutely right to be supporting more house building, but the key will be reform of the planning system. The thing that makes housing in this country so expensive is the fact that supply is controlled. As the Chancellor rightly said in his Budget statement, actions to help demand are merely likely to push prices up. What we need is to see prices coming down, at least in relation to incomes, and that means not only increasing supply, but increasing the supply of housing that people want to live in.

The one question that I will therefore raise on the Budget is this. The Chancellor said that he would look to ensure that the housing was primarily in an urban setting, but when we ask people what housing they want to live in, 80% say that they want to live in houses with gardens, and that means we will have to build on green fields. It would be wise to review the green belt, because some parts of it are not actually essential to life and the pursuit of happiness. What we really want is a succession of Poundburys across the country, because that is the type of housing that people want to live in, and I think that the Conservative party should be on the side of not only the Prince of Wales, but the people.

ECOFIN

Elizabeth Truss Excerpts

Tuesday 7th November 2017 Written Statements

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

A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 7 November. EU Finance Ministers will discuss the following items:

European Free Trade Association (EFTA) dialogue

Ministers will have their annual meeting with representatives from the EFTA group of countries, to exchange views on how best to make economic growth inclusive.

Early morning session

The Eurogroup President will brief Ministers on the outcomes of the 6 November meeting of the Eurogroup, and the Commission will provide an update on the current economic situation in the EU. Ministers will also discuss the EU’s common candidate for the position of Secretary-General of the World Customs Organisation.

VAT e-commerce package

Ministers will consider various items which make up the VAT legislative package, including Council regulation.

Review of the European system of financial supervision

The Commission will present to Ministers its legislative proposals on financial supervision, followed by an exchange of views.

Current financial services legislative proposals

The Council presidency will provide an update on current legislative proposals in the field of financial services.

Insolvency

The Commission will present its proposals on resolving existing non-performing loans, preventing the build-up of future non-performing loans and measures to increase the efficiency of the general insolvency framework in member states.

Follow-up to the G20 meeting of Finance Ministers and Central Bank Governors and of the IMF annual meetings in Washington

Minsters will receive information from the presidency and the Commission on the outcomes of the 12 to 15 October G20 and IMF meetings.

European Court of Auditors’ annual report

The president of the Court of Auditors will present the auditors’ report on the implementation of the budget of the European Union for the 2016 financial year.

Statistical package

The Council will discuss the autumn statistical package, review progress achieved and exchange views on the prospects for European co-operation on statistics. Ministers will also be invited to adopt Council conclusions.

[HCWS234]

ECOFIN: 10 October 2017

Elizabeth Truss Excerpts

Tuesday 24th October 2017 Written Statements

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

A formal meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg on 10 October.

Ministers discussed the following items:

Early morning session

The Eurogroup President briefed Ministers on the outcomes of the Eurogroup meeting held on 9 October, and the Commission presented its regular update on the economic situation in the EU. Ministers also discussed the European Commission’s use of discretion in assessing member states’ compliance with the preventive arm of the stability and growth pact (SGP).

Definitive VAT system

The Commission presented its legislative proposals for a definitive VAT system and the creation of a “single EU VAT area”.

Current financial service legislative proposals

The Council presidency provided an update on current legislative proposals in the field of financial services.

Digital taxation

The Commission presented its communication of 21 September on “A Fair and Efficient Tax System in the EU for the Digital Single Market”, and the presidency provided a follow-up to the Tallinn digital summit held on 29 September.

European semester 2017

The Council exchanged views on lessons learnt from the 2017 European semester process.

Preparation of the G20 meeting of Finance Ministers and Central Bank Governors and of the IMF annual meetings between 12 and 15 October in Washington

Minsters agreed the EU’s G20 terms of reference and International Monetary and Financial Committee (IMFC) statement, ahead of the annual meetings in Washington.

Climate finance for C0P23

The Council approved Council conclusions on climate finance ahead of the UN climate change conference of parties (COP23) which will take place in Bonn on 6 to 17 November.

Implementation of financial services legislation

Ministers received an update from the Commission on the status of implementation of existing financial services legislation.

[HCWS196]

Oral Answers to Questions

Elizabeth Truss Excerpts

Tuesday 24th October 2017 Commons Chamber

[Mr Shailesh Vara (North West Cambridgeshire) (Con)]

6. What progress he has made on closing the gender pay gap in the public sector.

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

The gender pay gap in the public sector is 18.3%, which is a record low, and this compares to 24.5% in the private sector.

[Mr Vara]

I am grateful to my right hon. Friend for those comments. Will she explain how the new duty introduced by this Government, requiring public sector bodies to publish the differences between male and female pay, will support the trend of an ever-reducing gender pay gap, which is at a record low?

[Elizabeth Truss]

The new duty we have introduced will mean more transparency, so we will be able to find out where the particular issues are in the public sector. Are there, for example, occupations such as engineering that are well paid and that women are less likely to go into, and what can we do to encourage women to apply for roles in them?

[Marsha De Cordova (Battersea) (Lab)]

Median public sector wages are £1,000 lower in real terms than they were in 2010. Does the Minister agree that it is about time that hard-working public sector workers got the pay rise they deserve?

[Elizabeth Truss]

We have already been clear that the pay review bodies will have the remit to look at how high-quality public sector workers can be retained and recruited right across the board, whether they are teachers, nurses or police officers.

[Nicky Morgan (Loughborough) (Con)]

The chief executive of Virgin Money, Jayne-Anne Gadhia, has this morning given evidence to the Treasury Committee on the Treasury’s women in finance charter—she is the Government’s women in finance champion. Ministers will know that one way of tackling the gender pay gap is to ensure that we have more women in senior roles, so will the Chief Secretary urge the Chancellor to reply to the letter I wrote to him last week about appointments to the Bank of England, where more senior women are needed, because the evidence this morning shows the importance of role models?

[Elizabeth Truss]

First, I congratulate my right hon. Friend on her work to promote these issues that she did as Women’s Minister. It would be great to see other professions, such as legal services, looking at the success of the women in finance charter and seeing what they could do. I will urge my colleague to reply to my right hon. Friend’s letter asap.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

In addition to the gender pay gap, the disability pay gap remains extraordinarily high, yet disabled people are not mentioned in the Government’s industrial strategy. When will we harness the potential of disabled people in our economy and create policies that effectively show that?

[Elizabeth Truss]

The hon. Lady is absolutely right to highlight the issue of making sure that disabled people have a full opportunity to participate in the economy. The fact is that we are missing out on huge amounts of talent—the talent of disabled people, women and older people—in our economy. We need to unleash that to help our country to become more productive, and also for the sake of those people, who have so much to contribute.

[Ms Nusrat Ghani (Wealden) (Con)]

7. What comparative assessment the Government have made of the level of spending on public services in the UK and other developed countries.

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

Last year, public spending was 38.9% of GDP, which equates to about £28,500 per household. This is comparable with other leading countries.

[Ms Ghani]

Does the Minister agree that it is due to this Government’s responsible management of the public finances that we are able to spend more on education than Germany and Japan, and more on defence and policing than any other European country?

[Elizabeth Truss]

My hon. Friend is absolutely right. We spend more per student on education than Germany or Japan. Because of our management of the public finances, we have been able to push £1.3 billion more of education spending to the frontline, where it is going to make the most difference in classrooms.

[Chris Evans (Islwyn) (Lab/Co-op)]

Is the Chief Secretary concerned by speculation that the Bank of England will increase interest rates by 0.25% in November, which would have an adverse effect on public spending?

[Elizabeth Truss]

That is one of the reasons why we need to make sure that we are reducing our debt and reducing our deficit in order to reduce the interest payments that came as a result of the previous Labour Government leaving us with the highest deficit in history. We have an independent Bank of England, and it is very important that as a Government Minister I do not tell it what to do on interest rates.

[David Hanson (Delyn) (Lab)]

8. What recent assessment his Department has made of trends in the level of public sector pay since 2010.

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

In 2010, there was a significant gap between wages in the public and private sectors whereby public sector workers received an average of 5.76% higher pay. Today, wages are comparable, and when we take into account more generous pension benefits, there is an additional 10% pension premium in the public sector.

[David Hanson]

Last week, the rate of inflation was announced at 3%. Public sector pay rises are at 1%. Will the Chief Secretary confirm that that is a pay cut for millions of workers, and will she take this from me as a Budget representation: “Scrap the cap”?

[Elizabeth Truss]

It seems that the right hon. Gentleman cannot take yes for an answer. There is not a public sector pay cap. We have said that individual Secretaries of State will be responsible for making proposals on their workforces dependent on specific circumstances. We are facing very different issues in the NHS and in the armed forces. What is important is that we look at the evidence and make sure that we can recruit and retain the best possible workers in the public sector, but we also need to make sure that we do not price out of the market people working in the private sector.

[Mr Mark Harper (Forest of Dean) (Con)]

Will the Chief Secretary urge her Cabinet colleagues, when they are making these decisions, to bear in mind that public sector pay rises must be fair not only to public sector workers, but to the five sixths of workers in the private sector who face the same pressures and challenges?

[Elizabeth Truss]

My right hon. Friend is right. The fact is that we were left a legacy by a previous Government who spent money that they did not have. We have had to get the public finances back on track. We do recognise that there are areas in which we need to make sure that we can recruit and retain high-quality public sector workers, but we also need to make sure that we have a thriving private sector economy. That is why we have ended up with the lowest unemployment for 40 years.

[Neil Gray (Airdrie and Shotts) (SNP)]

We know from the Resolution Foundation that this decade, from 2010, is the worst for wage growth in 210 years, so when will the Chief Secretary to the Treasury ensure that Departments are fully funded to scrap the cap?

[Elizabeth Truss]

The reason we have not seen the wage growth that we want to see is that we have an issue with productivity in this country. In order to raise living standards for everybody, regardless of whether they work in business or in the public sector, we need to make sure that we raise productivity. That is why we are investing in infrastructure and skills—doing all the things that the previous Government did not do to make our country more productive.

[Charlie Elphicke (Dover) (Con)]

Can my right hon. Friend confirm, for the avoidance of doubt, whether there is a pay premium for the public sector over the private sector?

[Elizabeth Truss]

There is not a pay premium. Public and private sector pay are roughly comparable, but in the public sector there is an average of 10% additional remuneration in terms of pension contributions.

[Mr Speaker]

I hope that the whole House will join me in congratulating very warmly the right hon. Member for Tatton (Ms McVey) on her significant birthday today.

--- Later in debate ---

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

My hon. Friend is absolutely right. We should not be giving away our negotiating position when we are entering one of the most important negotiations that the country has ever been involved in, and that is why we need to be prepared for all eventualities. I am delighted to be meeting my hon. Friend tomorrow to discuss the issue in more detail.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

We are having difficulties with mobile banking in my constituency. I know of instances in which two different mobile banks have arrived in the same community while other communities have seen no mobile banks at all. We have problems with people queueing in rough weather and getting wet, and problems with paper banking. Will the Chancellor, or some other Minister, propose ways of reorganising mobile banking and making it more user-friendly, and of getting the banks to co-operate with each other to deliver a service that is vital in the highlands?

--- Later in debate ---

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

Teachers have travelled from all over the country today to lobby Parliament about severe real-terms cuts in their pay. The Chief Secretary has said that she has lifted the pay cap owing to the pressure that Labour has placed on her, but will she confirm that her Department will fund the recommendations of the pay review body rather than cash-strapped local authorities?

[Elizabeth Truss]

The fact is that teachers received, on average, a 4.6% pay rise last year, including promotions and responsibility allowances. Pay in schools involves a great deal of flexibility, and headteachers can decide how they pay teachers. However, it will be up to the Department for Education to look at the specific circumstances in schools and make those determinations.

[Mr Peter Bone (Wellingborough) (Con)]

Does the Chancellor share my frustration at the fact that since the EU referendum, a number of senior politicians have been talking down the economy? Should they not be talking it up, because we have a great future outside the European Union?

--- Later in debate ---

[Mr Sheerman]

May I make a plea to the Chancellor? A teacher has visited me in the House today, whose school has run out of money for photocopying and for books in the Library. If the Chancellor wants to do something about productivity, he should invest in schools and colleges now.

[Elizabeth Truss]

The hon. Gentleman seems to have missed the announcement just before the summer that we are putting £1.3 billion more into the frontline, not by taking in more taxes, but by using the money we have across government better.

Spending Authority

Elizabeth Truss Excerpts

Thursday 12th October 2017 Written Statements

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

It is important that Departments can start spending to prepare for Brexit when they need to do so. Managing public money requires that expenditure on new services must rest on specific legislation. However, delaying spend until legislation has reached Royal Assent could jeopardise readiness for Brexit.

To address this, for the small proportion of spending affected, Ministers can issue a technical direction, allowing critical spending to be incurred ahead of Royal Assent, whilst ensuring transparency to Parliament.

In these cases, the use of a direction will be a matter of timing. Departments will still need to ensure spending is in all other respects regular, proper, feasible and good value for money, in the usual way. I have asked my officials to write to all Departments explaining this process. They will also write to the Public Accounts Committee—this letter will be published to ensure full transparency.

As confirmed yesterday, by the Prime Minister to the House and by the Chancellor to the Treasury Committee, the Treasury has committed over £250 million of additional spending in 2017-18 to prepare for Brexit from the reserve. Departmental allocations will be set out at supplementary estimates in the usual way. An update on Brexit spending will also be provided at the autumn Budget.

[HCWS162]

ECOFIN and Informal ECOFIN

Elizabeth Truss Excerpts

Tuesday 10th October 2017 Written Statements

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

A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Luxembourg on 10 October. EU Finance Ministers will discuss the following items:

Early morning session

The Eurogroup President will brief Ministers on the outcomes of the 9 October meeting of the Eurogroup, and Ministers will discuss the current economic situation. Ministers will also discuss the European Commission’s use of discretion in assessing member states’ compliance with the preventive arm of the Stability and Growth Pact (SGP).

Current financial service legislative proposals

The Council presidency will provide an update on current legislative proposals in the field of financial services.

Definitive VAT system

The Commission will present their proposals for a definitive VAT system and the creation of a ‘single EU VAT area’.

European semester 2017

The Council will exchange views on a report evaluating the 2017 European semester process and reflect on lessons learnt.

Preparation of the G20 meeting of Finance Ministers and Central Bank Governors and of the IMF annual meetings between 12 and 15 October in Washington

Minsters will agree the EU’s G20 terms of reference and International Monetary and Financial Committee (IMFC) statement, ahead of the annual meetings in Washington.

Climate finance for COP23

The Council will agree Council conclusions on climate finance in preparation for the COP23 UN climate change conference in November.

Digital taxation

The Commission will present its communication of 21 September on ‘a fair and efficient tax system in the EU for the digital single market’. As well as input from the presidency, the Commission will also provide a follow-up to the Tallinn digital summit that was held on 29 September.

Implementation of financial services legislation

Ministers will receive an update from the Commission on implementation of existing financial services legislation.

An informal meeting of The Economic and Financial Affairs Council was held in Tallinn on 15-16 September 2017. The UK was represented by my right hon. Friend the Chancellor of the Exchequer (Philip Hammond). EU Finance Ministers discussed the following items:

Working lunch—deepening the economic and monetary union (EMU) and maximising the effectiveness of EU finances

Based on the European Commission reflection papers, Ministers discussed the interlinkages between future development of the economic and monetary union and the framework on EU finances.

Working session I

Ministers were joined by Central Bank Governors for the first Working Session. Two items were discussed.

(a) Deepening of the EMU: interaction of rules and institutions

Ministers and Central Bank Governors discussed the implications of the deepening of the economic and monetary union for the EU’s economic and fiscal policy framework.

(b) Capital markets union: Technological Innovation and Financial Regulation (FinTech)

Ministers and Central Bank Governors then focused on the implications of intensified technological innovations to the functioning, development and stability of banking and capital markets. The discussion drew on analysis by Bruegel and included participation from the European Parliament, the European Central Bank, the Commission, and the European Securities and Markets Authority.

Working session II

a) Corporate taxation challenges of the digital economy

Following a presentation by the Estonian presidency, Ministers discussed how to modernise the corporate income tax rules in a way that would take in to account the new business modes using digital technology. Commissioner Dombrovskis and José Ángel Gurria (Secretary-General of the OECD) also contributed to the discussion to set out their respective positions.

b) Cost efficiency and sustainability of customs IT systems

Ministers discussed the governance reform of the customs union, particularly considering customs IT infrastructure that would assure the sustainable and cost efficient electronic systems worthy of a digital single market. This builds on previous discussions regarding the development of an EU customs IT strategy and looks to proposals for a centrally developed customs IT system to be rolled out across Europe from 2025.

[HCWS149]