Growing the UK Economy
John Glen Excerpts(3 days, 16 hours ago)
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John Glen (Salisbury) (Con)
Among the fundamental enablers of growth in the economy are financial services and opening up markets to invest. I think there was consensus across this House in the last Parliament on the Financial Services and Markets Act 2023, which provided the framework to do that. What concrete proposals have come forward from the Financial Conduct Authority and the Prudential Regulation Authority consideration of changing some of the restrictions that stop the right levels of investment? This week, the Government enabled about £100 billion of surplus funds from defined-benefit pension schemes to be made available. What proportion of that money will be invested and in what timeframe? The concern around these announcements is the delay to tangible, calculable economic impact.
Darren Jones
I point the right hon. Member to the Chancellor’s Mansion House speech, which set out in detail this Government’s approach to financial services. They are an important enabler for the UK and a particular strength globally, as I know he knows very well. On his particular question, I will need to write to him with the answer, but he can see that this Government are taking action to unlock investment in the UK economy. As has been reported, the Prime Minister and the Chancellor have been meeting regulators to make sure that they are geared for growth as well as for protecting consumers.
Agricultural and Business Property Relief
John Glen Excerpts(2 weeks, 4 days ago)
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Graham Stuart
The hon. Gentleman makes an important point that has not been made so far: we have among the lowest food costs in the world. In fact, all my local farmers are forever moaning at me about how outrageous it is that food is so low in price. As I say to them, the system has allowed them to continue farming, providing first-class food at a very low cost to consumers. It is that carefully balanced ecosystem that will be impacted by this juggernaut creation of the Government, which will raise, if it raises anything at all, very little. That is why it is great to have someone as thoughtful, insightful and empathetic as the Minister on the Government Bench, because we have time to change path away from this ridiculous policy.
John Glen (Salisbury) (Con)
My right hon. Friend is making a very clear case. Of course, there is massive agreement in the room. Does he recognise that with the uncertainty about the land use framework and the Government’s interventions and intentions on development of the work that we did on ELMS—the environmental land management scheme—farmers face massive uncertainty? Does he agree that it would be far better if the Government paused, as the NFU is asking, to look at this matter in the round, alongside the other policy decisions that they need to make—there is plenty of time before next spring—and, in particular, to address the issue about the age distribution of farmers? For younger farmers there will be ways of mitigating this matter and for older ones there simply are not. Overall, they lack clarity on what the future looks like, and that is a real concern.
Graham Stuart
At the very least, as my right hon. Friend says and as a colleague touched on earlier, tweaks could be made to this policy to stop the most egregious negative impact of it on people who have planned in good faith all their lives for a position and are now in no position whatever to change things. It is not just the elderly—everyone looks for the elderly person in their 80s or 90s to pass on, but I met another constituent whose mother died aged 41. These things happen, sadly, and what does that do to a farm? Is it holding hundreds of thousands of pounds in the bank when there are 200 and something acres?
Public Finances: Borrowing Costs
John Glen Excerpts(3 weeks, 2 days ago)
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Darren Jones
I very much agree with my hon. Friend. We have to pay day-to-day bills with the income we generate day to day. The lesson that we learned from the Opposition was about what they were happy to do, but this Government are not. They were happy to announce plans and programmes to make promises to the British people, even though they knew they did not have the money to pay for it. That will never happen under this Labour Government.
John Glen (Salisbury) (Con)
When the Chancellor set the envelope for spending for this Parliament, and said to the Treasury Committee on 6 November that she would not come back for more tax increases or more borrowing, that was based on her assumptions about the cost of borrowing. Those are manifestly in significant doubt, to look at it in the most charitable way. I have sat in the Chief Secretary’s position, and I know he will want to equivocate and push decisions to the next OBR assessment and the next fiscal event, but the truth is surely this: this Government have to cut spending, increase taxes or borrow more. If the cost of borrowing is increasing, that moment will come sooner. Which of those choices is he inclined to make, and when will he tell the British people honestly what this Government have done?
Darren Jones
I have been clear to the House, as has the Chancellor, that the fiscal rules are non-negotiable. Public services will have to live within their means. We set the Budget in the autumn last year, and we have the OBR forecasts coming in March. Those are the numbers that Departments are working to in the spending review, and those are the numbers that we will hold public services to when we conclude the spending review in June.
Employer National Insurance Contributions
John Glen Excerpts(1 month, 4 weeks ago)
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Danny Beales (Uxbridge and South Ruislip) (Lab)
The issue at the crux of the debate is one of economic responsibility. It is about a choice whether to invest or to let further decline take place in our public services.
They say a week is a long time in politics. Well, four months is clearly still not long enough for the Conservatives to have learned any lessons from the last general election about why they might be sitting on the Opposition Benches and we might be sitting on the Government Benches. They crashed the economy, wasted billions of pounds of taxpayers’ hard-earned money and ran the NHS into the ground. They then called an early election to run away from the mess that they knew this Government would inherit.
As legislators, we need to be honest with the electorate about the trade-offs and challenges this country faces, and we cannot simultaneously rebuild our public services and cut taxes at the same time. As has been said, there is no magic money tree—we saw with the disastrous Liz Truss mini-Budget the impacts of a Government who do not understand those facts.
John Glen (Salisbury) (Con)
I recognise there are political differences across the House, but the hon. Gentleman surely has to be concerned about the overall impact of the decision on national insurance on the ability and inclination of those who invest in the real economy to generate the wealth and tax revenues that will sustain the economy going forward. Surely he can recognise that the decisions made by his Government are having a negative effect on growth, which will mean more taxes and more borrowing.
Danny Beales
I thank the right hon. Gentleman for that rather long intervention. I must say that the Conservatives do not understand the economy. If someone cannot get a train to work, they cannot work; if they cannot get a hospital appointment, they cannot work. Time and again, I hear from employers that they want investment, stability, and for their employees to be able to contribute in the workplace. To separate public services and the private sector into two diametrically opposed parts of the economy is what the Conservatives did for 14 years. They cut public services time and again, and we all face longer-term costs because of that fact.
The Labour Government understand that. Sadly, the Conservative party still does not. The choice we are still hearing is for continuing austerity. No one in this country voted for that and no one on the Labour Benches, at least, wants that. We want NHS waiting lists to fall. We want crumbling schools rebuilt, and investment in our vital public services and armed forces.
Farming and Inheritance Tax
John Glen Excerpts(1 month, 4 weeks ago)
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James Murray
To address the right hon. Gentleman’s point, we recognise that agricultural and business property relief play an important role in supporting family farms, but the full unlimited exemption from inheritance tax has simply become unsustainable. The four most recent years-worth of data make clear why. The data shows that a very small number of agricultural property relief claimants, including those who claim business property relief too, benefited from a very significant amount of relief. In total, 47% of the Exchequer cost of the relief went to the top 7% of claims. To be clear what that means, I will put it another way. For every 14 or so estates, the top one among them claimed half the total relief.
John Glen (Salisbury) (Con)
Let me tell the Minister what concerns me most. There has not been an impact assessment, but if the major driver for the Government, whether we accept it or not, was to raise some money from this source, why were other more effective mechanisms not used, such as business roll-over relief, where a business could be sold in another context and rolled over into buying the land, deferring capital gains tax? If that mechanism had been used, the money would have been taken from much wealthier people who were not actually producing food in the first place. Now, we are capturing a massive proportion of small family farms completely unnecessarily, because due consideration of better alternatives was not done by the Minister.
James Murray
I reassure the right hon. Gentleman, for whom I have a lot of respect personally, that we carefully considered how to calibrate the policy to ensure that significant relief from inheritance tax is still available to family farms, while at the same time fixing the public finances in as fair a way as possible.
James Murray
I have confidence in the way in which we have calibrated the policy. As I said to the right hon. Member for Salisbury (John Glen), it has balanced the need to retain significant, generous provision of inheritance tax relief for family farms with ensuring that, at the same time, we fix the public finances in the fairest way possible.
John Glen
The hon. Gentleman is being very generous with his time. In view of the point that has just been made by my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson), will he not consider, at the very least, looking at some dispensation for farmers above a certain age, given the lack of time that they will have to plan for this intervention? The truth is that someone who is near retirement age will be faced with the prospect of 10 years of all their projected profits being eaten up by this tax, which will mean that the farm cannot go to the next generation. The hon. Gentleman must surely look at some mitigations to deal with that reality for so many farmers who are concentrated in that older age group.
James Murray
We know that individual circumstances will vary. Any individual who is concerned about their specific tax liability should obviously consult an accountant or financial adviser. We would not know, from a thumbnail sketch, whether that person had any inherited nil rate bands, what their liabilities were, what decisions they had made about gifting, and so on. A huge number of factors will play into this, and it is right for individuals to seek specific advice. Things that are said in this Chamber may be creating undue anxiety, when people should be looking into the detail.
John Glen (Salisbury) (Con)
It is a privilege to contribute to the debate. I represent Salisbury and south Wiltshire, which has a large number of farmers. A large number of them visited me here in the House of Commons and, a week later, I had the largest meeting of farmers I have ever had in Salisbury. They were gravely disappointed and concerned about the implications of this Budget measure. It was a shock, because it was widely expected that this measure would not be on the table when the Labour Government came in.
One of the greatest privileges of my career was to spend most of the past eight years—six and a half of them—in the Treasury in various roles. I was PPS to a Chancellor, Philip Hammond, and then I was Economic Secretary and Chief Secretary. I understand the dynamic between spending Departments and the Treasury in the run-up to a Budget, and I have a serious degree of sympathy for the Ministers who were in DEFRA in the run-up to this Budget, but when APR and BPR were put on the table in front of me and my ministerial colleagues at numerous points during our time in the Treasury, we said no.
I acknowledge—I am trying to be as reasoned and as reasonable as I can—that other choices would have had to be made, and I recognise the difficulty of those choices. We faced difficulties when we came into government in 2010 with a 10% deficit. This Government had a different set of challenges, although I would dispute some of the numbers. However, I want to keep my remarks focused on the measure at hand.
The reason I would never have wanted to progress the removal of APR and BPR was that that policy was the product of a technical desktop economist’s view of tax raising. It was not an option when one took into account the reality of what would actually happen to the rural economy and the implications for farming. A number of colleagues have rehearsed excellent examples where farms of quite modest size but serious capital value would be massively compromised by that policy, even with an opportunity to repay that inheritance tax interest-free over 10 years, as the Chancellor said to the Select Committee. I acknowledge that—it is standard practice for this sort of relief—but given the profitability of the typical farm, it is just not a realistic prospect.
I have had some dealings in the past with the farming Minister, the hon. Member for Cambridge (Daniel Zeichner), and I genuinely have a great deal of respect for him—I do not want to embarrass him by saying anything more. He has a large number of issues to deal with, and I think all of us in this House want to see some clarity around the land use framework, and how we reconcile the question of where we build more homes with the challenges of renewable energy. However, we have to keep in focus the core function of our farmers, which is to produce food. I recognise the point made in an intervention earlier, and I am not suggesting that the Government are going to say, “We are going to have solar farms everywhere,” but we do need to have a coherent farming policy as a whole and a land use strategy that people understand.
The issue with this policy is that it is going to decimate the number of family farms unless there is a significant increase in thresholds, there is an age limit on when the policy applies, or an alternative tax mechanism like business asset roll-over relief is examined by the Treasury. Unless those changes happen—and there is time to consider those changes before the legislation comes before this House, which will probably be at the end of next year—we in this country are going to be in real trouble with the legacy of this decision. I urge the Minister’s colleagues in the Treasury to think again and come back with better proposals for their colleague.
Financial Services: Mansion House Speech
John Glen Excerpts(2 months, 2 weeks ago)
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Tulip Siddiq
I thank my hon. Friend for her question. She has done an enormous amount of work in this area, and I applaud her for that. She was instrumental in the Government taking our initial steps to regulate the “buy now, pay later” sector. There is a need for “buy now, pay later” during a cost of living crisis, and people will access those companies’ products, but I have brought this under FCA control so far, and have regulated to ensure that it is safer, and that people do not store up a huge amount of debt that they cannot pay back. The consultation is open until 29 November, and I ask her to urge others to feed into it to ensure that we get this policy right; that was not done by the previous Government. I will bring forward legislation as quickly as possible, but I thought it was important to hear what people and the industry had to say, because we want to regulate properly. She is being patient, and I ask her to be a bit more patient; our intention is to make the sector as well regulated as possible under the FCA.
John Glen (Salisbury) (Con)
I warmly welcome much of what was announced last week—the work on listings, mutuals and the remit refresh—but I say to the hon. Lady and the Minister for pensions that there is considerable reticence in the pensions industry when it comes to many of the drivers of change highlighted last week. We need a complete cultural shift and change in appetite from those who lead the pensions industry. I urge her to keep under review the fiscal incentives, and the transparency and accountability rules, so that we can see the performance gap that results from not making some of these changes. I look sympathetically on the aspirations that she has set out today, and I wish her well as she moves forward with these critical changes, which should have a lot of support from across the House.
Tulip Siddiq
I know that the right hon. Member did a huge amount of work in the financial services sector while he was in office. The civil servants still talk about how amazing he was—much to my dismay sometimes! We agree that there needs to be a change in appetite in this place. Transparency is top of the list, as the Minister for Pensions just whispered in my ear. We thank the right hon. Member for his constructive approach on the review, and urge him to tell the people he knows in the sector to respond to and feed in to the consultation.
Business Property Relief and Agricultural Property Relief
John Glen Excerpts(3 months, 2 weeks ago)
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Joe Morris (Hexham) (Lab)
I congratulate the hon. Member for Gordon and Buchan (Harriet Cross) on securing this debate. We have already spoken briefly in an all-party parliamentary group meeting about the similarities between our constituencies. She and I both know the importance of a thriving agricultural sector, the jobs it provides, and the almost undefinable contribution it makes to the character of the constituency and to a community.
I am concerned because farmers in my constituency have told me that they have been dealing with the chaos of the economy for the last 14 years. They have been dealing with crashing consumer confidence and an international trading situation in this country that simply is not conducive to the long-term success of the agricultural sector. For example, the Australia and New Zealand trade deal was a betrayal of the sheep farmers in my constituency in particular and has threatened their long-term business prospects. I hope that the Minister not only responds to the points made in this debate but talks about how we can make sure that the economy is stable, secure and on firm foundations, and that we never again see our farmers sold down the river as they once were.
John Glen (Salisbury) (Con)
Would the hon. Gentleman acknowledge that the Canadian deal has not been signed in the last 18 months in order to take account of the agricultural sector’s concerns in particular? The pressing, immediate concern for which the Minister must provide a resolution today is how this Government are disposed towards agricultural property relief and business property relief. That is their concern now. The hon. Gentleman is making a political point—whatever happened previously, we have to focus on his Government’s responsibility in the coming two weeks.
Dr Rupa Huq (in the Chair)
I have just been reminded by the Clerk that it is very unusual for a shadow Cabinet member to speak in a Westminster Hall debate as a Back Bencher. I will allow Joe Morris to respond, but apparently that is not the done thing.
Dr Rupa Huq (in the Chair)
It is not the Opposition Chief Whip’s decision; it lies with the Chairman of Ways and Means. Our rule book says that it is highly unusual. I will allow Joe Morris to respond, but hopefully there will not be a back and forth between the shadow Cabinet and Back Benchers.
Joe Morris
I thank the right hon. Gentleman for his highly unusual intervention. I will make a brief university point and say that it is highly unusual to have a Mansfield College MP intervene on a Mansfield College MP; it is probably the first time that has happened in this Parliament.
Joe Morris
I take the right hon. Gentleman’s point. I am glad that the last Government learned some of the lessons of the Australia trade deal and implemented them. It is important that we get an answer on APR and BPR. I am making a slightly political point, and I hope the right hon. Gentleman will humour me for it, but it is important that we maintain that international trade is an ongoing piece and the agricultural sector does not exist in isolation. None of these reliefs exist in isolation. Farming, more than anything, is an industry with concerns that sit between the Treasury, the Department for Environment, Food and Rural Affairs and the Department for Business and Trade. More than almost any other industry, it is reliant on good cross-party and cross-departmental working, and we need to ensure that the Government do that. I hope that we do not consider these things just in isolation but overall and together, and we must ensure that the Government are working towards securing them.
One of the main concerns that I picked up from my constituency is the inability of consumers to distinguish between British and foreign produce when it is badged up the wrong way. I hope the Treasury will listen to representations on how we can combat that kind of false advertising when foreign produce is repackaged as UK produce. How we keep the family farm going, and how we ensure that small farms are able to continue to produce in the Tyne valley, is deeply concerning to me. I have spoken to a lot of local farmers about land loss and about large corporations buying up prime agricultural land and using it to—I think it is fair to say—greenwash. That is genuinely a national issue that requires cross-party cohesion and cross-party solutions. My own hackneyed political point scoring is not going to help in that, but in the long term and in this Parliament, I would always welcome working to address that. However, I urge the Minister to remember that farms are businesses and they need long-term consumer confidence. They need an overall business climate that rewards investment and entrepreneurialism, but not one that is not built on sand. They need one that is built on secure, stable foundations and that is open to serious cross-party working.
When we look at how we get the rural economy growing, it is really important that both land-owning farms and tenant farms in particular can continue to employ people and that there is money going out of those farms into the local economy. I have spoken to my constituents: they have had to take certain crops out of production to grow those that need less manpower. They would have employed people to work those fields or work that livestock, but they have been forced to change by often badly designed initiatives from DEFRA, and we need to work cross-party to ensure that those initiatives are better designed in future. They have been forced into those measures that, over the course of many years, slowly bring their workforce down and lead to less money coming into the local economy. In his response, I hope the Minister can ensure that the Treasury hears the pleas of rural communities. This issue is genuinely a concern across parties, and my constituents are very concerned about the ongoing removal of prime agricultural land from food production.
Public Service Pension Schemes: Quadrennial Valuations
John Glen Excerpts(1 year, 4 months ago)
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The Chief Secretary to the Treasury (John Glen)
There are currently more than 6 million active members of the public service pensions schemes, which cover the NHS, teachers, the armed forces, the police, firefighters, local government workers, the judiciary and civil servants. Valuations of the public service pension schemes are undertaken every four years. The valuations are important as they ensure that the full costs of each scheme are understood and fully recognised by Government, and that there is a fair balance of risk between members and taxpayers with regard to the cost of providing the schemes.
This valuation is the first time that a reformed cost control mechanism will be used. Following a review by the Government Actuary and a public consultation, the cost control mechanism has been reformed to address concerns around its not meeting its original objectives. The objectives are to protect the Exchequer, and by extension taxpayers, from unforeseen costs; to maintain the value of public service pension schemes to members; and to provide stability and certainty on member benefit and contribution levels. The reforms mean that the mechanism now only assesses costs associated with the post-2015 reformed schemes, increases the margin by which costs need to vary from the target in order for benefit, or member contribution, changes to be required from 2% to 3% of pensionable pay, and includes an “economic check” such that changes will only happen if the costs would still be outside the same margin had the impact of changes in long-term economic assumptions been included. The Public Service Pensions Act 2013, when taken together with regulations made under it and the Public Service Pensions and Judicial Offices Act 2022, provides for the introduction of these reforms.
On 31 August 2023, HM Treasury published a document that sets out how the valuations are to be conducted for this valuation cycle[1]. 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. The document allows public service employers, Departments and scheme administrators to complete their valuations and prepare for the implementation of new employer contribution rates and take any necessary steps with respect to cost control mechanism results. The publication of this document follows a statutory consultation with the Government Actuary, which concluded in August 2023. Copies of this document, the 2023 Directions, have been placed in the Houses of Parliament Libraries.
A key factor which influences the valuation results of all unfunded schemes is a reduction in the SCAPE—superannuation contributions adjusted for past experience —discount rate which is used to express schemes’ future pension payments as a present-day cost, based on the Office for Budget Responsibility’s forecast of long-term GDP growth. The updated SCAPE discount rate was announced in March 2023 and is expected to cause increases to employer contribution rates. This is because pension payments paid in the future will be discounted at a lower rate and therefore have a higher value in today’s terms. HM Treasury has committed to provide funding, for all centrally funded employers, for increases in employer contribution rates resulting from the 2020 valuations as a consequence of changes to the SCAPE discount rate.
The outcomes of the valuations are expected to be confirmed later this year via the publication of each scheme’s valuation report. Changes to employer contribution rates will be implemented with effect from 1 April 2024, and any changes to benefits required to bring a scheme back to target cost would apply retrospectively from 1 April 2023. An additional process operates in the local government pension scheme (LGPS) (England and Wales) run by the LGPS England and Wales Scheme Advisory Board.
[1] https://www.gov.uk/government/publications/public-service-pensions-2020-valuations
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Oral Answers to Questions
John Glen Excerpts(1 year, 4 months ago)
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Philip Davies (Shipley) (Con)
The Chief Secretary to the Treasury (John Glen)
The Chancellor launched the efficiency and savings review in the autumn statement to focus on the Government’s priorities and identify ways in which to work more efficiently and help to manage budgetary pressures from higher inflation. The Secretary of State for Transport and I discussed the costs of HS2 during the review, which helped to inform the decision to rephase certain parts of the project as part of balancing the nation’s books.
Philip Davies
The travel between north and south is the bit of transport infrastructure that works; it is the travel across the north that does not work. What would the cost of HS2 have to reach for the Government to conclude that it no longer represents value for money for the taxpayer, or are the Government pursuing the essentially socialist policy that they will keep paying for this ridiculous white elephant irrespective of the final bill?
John Glen
I took the precaution of researching my hon. Friend’s interest in this subject, and I note that he was issuing challenges on it 14 years ago. The Government remain—as they were then—fully committed to delivering HS2 and the integrated rail plan. This is a long-term investment that will bring our biggest cities closer to each other. It will boost productivity, and will provide a low-carbon alternative to cars and planes for many decades to come. As my hon. Friend knows, we are also working, through the IRP, on a £96 billion package to improve inter-regional rail connections, which obviously affects his constituents.
Graham Stringer (Blackley and Broughton) (Lab)
Does the Minister agree that this country’s performance on productivity has been pitiful over the last 10 years? There has been virtually no improvement in productivity, and one reason for that is our lack of investment in national infrastructure. Slowing down HS2 is a bad move when it comes to improving our infrastructure, and it is years since we agreed to a third runway at Heathrow. Does the Minister agree that if we are to improve our productivity, we have to invest in infrastructure?
John Glen
I can agree with the hon. Gentleman that the investment of £600 billion in infrastructure in all parts of the country to which the Government are committed is critical to easing the productivity challenge that has faced successive Governments, and the Chancellor will introduce measures in the autumn statement to address it further.
Greg Smith (Buckingham) (Con)
HS2’s costs have ballooned since it was first conceived under the last Labour Government. As my right hon. Friend has said, owing to pressure from the Treasury the project has had to be rephased, and trains will now go from west London—not central London—to a station not in central Birmingham, which negates the benefits that the scheme’s proponents said it would bring. With costs ballooning still further, we just cannot afford it, can we?
John Glen
I am sorry, but I do not agree with my hon. Friend. I certainly recognise that infrastructure investments of this scale and with this level of ambition are never easy to deliver. I have set out the changes to the profile of the investment, but all the key elements are still on track, and we will continue to work with the Department for Transport to ensure that that remains the case.
John Spellar (Warley) (Lab)
Is the Minister not also concerned about cost-benefit analysis? Have not assumptions behind the pattern of business travel demand been changed dramatically by the pandemic, working from home and video conferencing? Is the Minister satisfied that the Department for Transport has properly re-evaluated HS2 to take account of such changes?
John Glen
Yes, I am content with that. I recognise those changes in patterns of behaviour when it comes to the use of public transport, but we also face cost of living challenges. That is why we are working so closely with the Department for Transport to, for example, continue investment in buses over the next two years, and continue to spend £200 million on capping fares to £2 outside London. We must bear in mind, however, that continued investment in transport infrastructure is key to greater connectivity across the United Kingdom and dealing with the economic growth imperative.
Esther McVey (Tatton) (Con)
It has been reported over the last couple of days that accommodating HS2 will mean fewer trains between the north and London. One station affected is Wilmslow in my constituency. Does the Minister agree that were that to happen, HS2 would no longer be value for money or good for the north? It would certainly take longer and cost my constituents more.
John Glen
HS2 is going to happen. The question is what additional investments across other parts of the rail infrastructure might benefit my right hon. Friend’s constituents additionally and more directly. I set out with the integrated rail plan the £96 billion package to improve rail connections, and many elements of that will have a direct impact on her constituents in Cheshire.
Andrew Bridgen (North West Leicestershire) (Reclaim)
As the Minister is well aware, North West Leicestershire has suffered under the blight of HS2 for more than a decade, and the whole project has recently been declared to be undeliverable. It has been unaffordable for some considerable time. Will he urge his colleagues in Government to cancel the remainder of the eastern leg and reallocate just a small portion of that budget so that we can reopen the Ivanhoe line?
John Glen
I recognise that the hon. Gentleman has strong views on this, and I know that he has been personally affected by it in the past. The project, although it has been rephased, will continue. There are a number of issues involved in ensuring tight management of that budget, and I am working closely with the Department for Transport to see that that happens.
Nadia Whittome (Nottingham East) (Lab)
Mary Kelly Foy (City of Durham) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government are committed to supporting individuals to live healthier lives. High inflation is the greatest immediate economic challenge that we must address. The Government have made it a priority to halve inflation this year. We are on the path back to the target of 2% and consumer price index inflation fell to 6.8% in July. We will continue to work with all Departments to deal with the inflationary pressures they face.
Mary Kelly Foy
Being unable to pay for essentials such as food, heating and rent has an impact on physical and mental health. It can lead to delayed diagnosis, malnutrition and serious mental health problems. As the former Health Secretary will know, prevention is better than cure, but austerity flies in the face of a preventative approach. What discussions has the Chancellor had with the Secretary of State for Health and Social Care to ensure that the NHS has prevention at its heart? Will we see a rise in funding in the autumn statement?
John Glen
Yes, I have frequent conversations with the Secretary of State and other Ministers about health budgets. We will be increasing the public health grant to £3.575 billion for the next financial year. That is to ensure that we have that real-term funding protection over the next two years, but there are a number of other interventions that we are making on delivering services more effectively, ensuring that we have the provision of additional staff with the long-term workforce plan for the NHS. None the less, I do recognise the challenges that a post-covid NHS faces in terms of the legacy of demand that is yet unmet. We are continuing to work to bring down waiting lists and we have seen significant progress recently, particularly with two-year and 18-month lists.
Mr Philip Hollobone (Kettering) (Con)
A key part of improving the public health and wellbeing of my local residents in Kettering is the redevelopment of Kettering General Hospital. Can the Chief Secretary to the Treasury confirm that the £400 million-plus redevelopment of KGH remains on track for completion by 2030, and that the standardisation of the design of the 40 new hospitals will help to reduce costs and increase deliverability?
John Glen
Kettering General Hospital is always at the top of my mind when I come to Treasury questions, but the bigger challenge, as my hon. Friend rightly points out, is how we ensure the efficiency of the expenditure of every pound of taxpayers’ investment in the health estate. I shall continue to work with the Secretary of State on that plan for the 40 hospitals to make sure that we achieve that.
Derek Twigg (Halton) (Lab)
In the many discussions that the Minister says he has had with the Secretary of State for Health and Social Care, what figure did they discuss with him that he estimates inflation will be at in the next financial year?
John Glen
There are a range of forecasts, but we have to deal with the reality. I am trying to ensure that, across all of the decisions that Secretaries of State make, we reprioritise effectively and deliver frontline services, but I do not have a number for the hon. Gentleman this afternoon.
Jonathan Gullis (Stoke-on-Trent North) (Con)
People in Stoke-on-Trent North, Kidsgrove and Talke find that mental health is a huge barrier to getting back into work and obviously helping to produce economic growth. That is something that the Chancellor is reported to have been considering carefully over the summer recess. My friend James Starkie and I have launched a No Time To Wait campaign to use some existing health and social care funding to get specialist mental health nurses into GP surgeries to help support people in a more preventive way—something the hon. Member for City of Durham (Mary Kelly Foy) asked about earlier. What support will the Treasury give to help the Department of Health and Social Care to enact those plans?
John Glen
My hon. Friend always has constructive suggestions in this difficult area. The Chancellor brought forward a number of interventions in the Budget to get people back into work after some of the behavioural shifts that we saw following the pandemic. We look forward to continuing to work with my hon. Friend on solutions for his community.
David Duguid (Banff and Buchan) (Con)
Ian Lavery (Wansbeck) (Lab)
The Chief Secretary to the Treasury (John Glen)
I do not accept that characterisation at all. I do understand the impact of mesothelioma, as my father died of it, but this Government have invested £15 billion to keep schools safe since 2015, and the Chancellor has set out other figures as well.
Mr Philip Hollobone (Kettering) (Con)
Mary Glindon (North Tyneside) (Lab)
John Glen
I have not heard that matter raised before, but I am very happy to take it back and correspond with the hon. Lady on it. Obviously, we have taken advice on the state pension age and have made clear our policies previously, but I am happy to look at any specific cases she raises.
David Duguid (Banff and Buchan) (Con)
John Glen
Dialogue is ongoing on this matter and I can confirm that we will continue to work on this in the coming weeks.
Saqib Bhatti (Meriden) (Con)
Andy Haldane, the former Bank of England chief economist, recently said in a Sky News interview that the Bank of England kept on printing money for longer than it needed to. It is clear that central banks across the world have been addicted to cheap money and that this has contributed to inflation across the world. Does the Chancellor agree that printing cheap and easy money has not been without consequence, and instead our monetary policy must focus on important growth factors such as productivity?
Treasury
John Glen Excerpts(1 year, 6 months ago)
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Ian Mearns (Gateshead) (Lab)
I am a little concerned about the £1.425 billion to be found from within the Department for Education’s existing budget between now and 2025, with £525 million this financial year and a further £900 million in the next financial year. Will the Minister be a bit more specific about exactly where that will be taken from within the Department’s budget to meet the teachers’ pay increase? While of course we welcome the fact that the Government are honouring the teachers’ pay review body recommendations, let us not forget that the envelope for the review bodies is set by the Government in the first place. There is something else going on in this situation: we currently have a recruitment and retention crisis among our teaching workforce, with something like 20% of newly qualified teachers leaving after three years and 40% leaving after five years. Nobody goes into teaching because of the money, but it always helps, and a rise in line with inflation would certainly help.
John Glen
I thank the hon. Gentleman for his question. I think he welcomes what we have decided to do with the 6.5% pay increase, which leaves a typical teacher with £44,300. We are reprioritising within the Department for Education’s existing budget to deliver the additional funding to schools, but we are protecting core schools funding and frontline services. We have put in additional sums of money through the spending review and subsequent fiscal events: £330 million in 2023-24 and £550 million in 2024-25. The numbers add up, and he will recognise that.
[Official Report, 13 July 2023, Vol. 736, c. 533.]
Letter of correction from the Chief Secretary to the Treasury, the right hon. Member for Salisbury (John Glen).
An error has been identified in my response to the hon. Member for Gateshead (Ian Mearns).
The correct response should have been:
John Glen
I thank the hon. Gentleman for his question. I think he welcomes what we have decided to do with the 6.5% pay increase, which leaves a typical teacher with £44,300. We are reprioritising within the Department for Education’s existing budget to deliver the additional funding to schools, but we are protecting core schools funding and frontline services. We have put in additional sums of money to fully fund this pay award: £525 million in 2023-24 and £900 million in 2024-25. The numbers add up, and he will recognise that.