Oral Answers to Questions
John Glen Excerpts(1 year, 5 months ago)
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Rachel Hopkins (Luton South) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government undertake extensive assessment of the effectiveness of the sanction regimes, which are eroding Russia’s financial base. We have sanctioned 28 Russian banks, covering 80% of Russia’s banking sector, and frozen more than £18 billion of Russian assets, and we have implemented unprecedented trade sanctions in addition.
Rachel Hopkins
Constituents in Luton South have raised concerns about the financial sanctions regime with me. Can the Government confirm whether it is still the case that Russian account holders in the UK can hold £50,000 or more in their accounts? What is to prevent individuals of concern simply parcelling up assets through proxies into a large network of accounts below the permitted level?
John Glen
The Office of Financial Sanctions Implementation works closely with our allies across the G7 to ensure that we have co-ordinated action among our international partners on this unprecedented package of sanctions. We have frozen the assets of 1,600 individuals and entities. We have implemented 35 different sanction regimes across government. I would be happy to take away the specific question that she has asked, because it is technical, and respond.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
A multimillion-pound start-up project that could be transformational in my constituency is now at risk because the Office of Financial Sanctions Implementation is yet to process an asset freeze licence application in respect of just 0.002% of the company’s capital, which was submitted in April. What steps is the Minister taking to ensure that such applications are dealt with swiftly? If I provide him with details of the company, will he ensure that the application’s progress is expedited?
John Glen
I am happy to take up my right hon. Friend’s case. We have expanded the OFSI resources. We have a monthly monitoring and efficiency dashboard. I accept how frustrating it can be for constituents’ businesses when such situations arise, and I am happy to take the matter away and get back to him swiftly.
James Murray (Ealing North) (Lab/Co-op)
As the war in Ukraine continues, we must not let up for a second on efforts to tighten the net on the accomplices and beneficiaries of Putin’s regime. We welcome the direction of the measures announced yesterday. Can the Minister confirm whether those measures will close all the loopholes and specifically the ownership thresholds, which Russian oligarchs and their enablers have been able to exploit to evade the bite of sanctions?
John Glen
The Government will be relentless in their pursuit of illicit assets. As I said, we have sanctioned 24 banks with global assets of over £940 billion and 120 elites with a combined worth of £140 billion. Working closely with our allies, we have incrementally and sequentially tightened that net and immobilised more than 60% of Putin’s war chest of foreign reserves worth £275 billion. We continue to work closely with our allies to intensify those measures as opportunities arise.
Sir Robert Syms (Poole) (Con)
I have one or two constituents in Poole who lost their jobs because they were in companies owned by Russians who were sanctioned, and they have found it difficult to have an orderly wind-up because banks run a mile from loaning those businesses a reasonable amount of money to sort them out. I know of one situation where people have not been able to get P60s as the business cannot get money from any of the banks—they do not want to be involved in anything to do with sanctions—so it cannot pay the accountants who would produce them. May I have a word with the Minister about that? In some cases, we are going over the top, and it is affecting our constituents.
John Glen
Those points demonstrate how serious and extensive the Government’s actions are, but I recognise that sometimes unfortunate situations arise and I am happy to look at that case and take it back to the Office of Financial Sanctions Implementation.
John Cryer (Leyton and Wanstead) (Lab)
To pursue the issue of proxies raised by my hon. Friend the Member for Luton South (Rachel Hopkins), am I right in thinking that the Minister said a few minutes ago that he was prepared to examine the possibility of taking action against proxies and those persons of interest who use proxies?
John Glen
What I would say is that the Government are committed to an ever-tighter grip on illicit finance and those individuals close to Putin who make a material contribution to his regime. Obviously, I will not commit on the Floor of the House to individual extensions to what we have already done, but I have set out the range of sanctions regimes that exist across multiple Departments of Government and I am happy to receive representations on whatever case the hon. Member wishes to bring to me.
Bob Blackman (Harrow East) (Con)
Richard Burgon (Leeds East) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government are doing three things to reduce inflation. First, we remain steadfast in our support for the independent Monetary Policy Committee of the Bank of England as it takes action to return inflation to its 2% target. Secondly, we are making difficult but responsible decisions on tax and spending so that we do not add fuel to the fire. Thirdly, we are tackling high energy prices by holding down energy bills for households and businesses, alongside investing in long-term energy security.
Richard Burgon
The rich and powerful have repeatedly sought to blame workers for high inflation, even though workers’ real wages have been falling as inflation soars. Many leading economists now say that profiteering by certain corporations, not wages, is driving price rises. The French Government have taken action to limit food prices, and Spain has introduced rent controls. When will this Government start targeting the profiteering that is helping to drive inflation?
John Glen
We continue to have constructive dialogue with industry and different sectors. I met supermarket representatives a few weeks ago, and the Chancellor and others in the Treasury will continue to have these conversations. I think most people recognise that we face common global challenges and that different economies will respond in different ways.
Mr John Baron (Basildon and Billericay) (Con)
Theresa Villiers (Chipping Barnet) (Con)
The Chief Secretary to the Treasury (John Glen)
Controlling public spending and ensuring that the interventions we are making prioritise growth enablement is a relentless activity. The household support fund of £2.5 billion continues to be an additional source of support for households, but there are no quick fixes; there is a relentless pursuit of the goals that we have set out at the start of this year.
Chris Elmore (Ogmore) (Lab)
Mr Alistair Carmichael (Orkney and Shetland) (LD)
John Glen
As the right hon. Gentleman knows, the farming support payment is ported to Scotland and operates on a different basis because it is devolved. We have committed to the sum of £2.4 billion for the duration of this Parliament and there are a number of schemes where the uptake is now increasing. I will continue to engage with my colleagues at DEFRA as those schemes develop further.
Mary Robinson (Cheadle) (Con)
The last bank in the entire constituency of Cheadle is about to close, so I was delighted when, following my interventions and direct conversations with LINK and appeals from the community, Bramhall was chosen to be LINK’s 100th banking hub recommendation. It will be invaluable for residents, but they will be left without banking services until it is open. Will the Minister look into bridging options in the interim, between the bank closing and the hub opening, or consider imposing requirements on banks to remain open until a hub is implemented?
Sir Chris Bryant (Rhondda) (Lab)
For the first time in my 20 years as an MP we have a real housing crisis in the Rhondda. Two thirds of people own their own homes, but lots of people who have relied on the commercial rented sector are finding that landlords are selling their properties because of decisions made about taxation and, because there is a cap on housing benefit, they do not want to continue in that market. Dozens of people are being evicted week in, week out. Will the Government look closely at what is happening to protect people in constituencies such as mine, so that they can keep their own homes?
John Glen
I am happy to meet the hon. Gentleman to discuss what is happening in his constituency. Obviously, there have been a series of changes since the section 24 change in the Finance Act 2015 and there are particular pressures in the housing economy at the moment, but I am happy to meet him to discuss that further.
Matt Hancock (West Suffolk) (Ind)
I welcome the work that the Chancellor and the Prime Minister have done to promote work on artificial intelligence done here, and in developing an ecosystem for that. It is clear that the UK has an opportunity to lead on this, especially on regulation, if we get it right, but only if we seize that opportunity now. What is the Chancellor doing to make that happen?
Her Late Majesty Queen Elizabeth II: Funeral and Related Events
John Glen Excerpts(1 year, 7 months ago)
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The Chief Secretary to the Treasury (John Glen)
The death of Her Late Majesty Queen Elizabeth II on 8 September 2022 and the period of national mourning that followed was a moment of huge national significance. Body Estimated costs incurred Department for Culture, Media and Sport £57.420 million Department for Transport £2.565 million Foreign, Commonwealth and Development Office £2.096 million Home Office £73.68 million Ministry of Defence £2.890 million Northern Ireland Office £2.134 million Scottish Government £18.756 million Welsh Government £2.202 million Total £161.743 million
During this period, many hundreds of thousands of people came in person to pay their respects, at the Lying at Rest in Edinburgh, the Lying in State in Westminster, as well as in London and Windsor for the state funeral on 19 September. Many more people also came out to support His Majesty The King and other members of the Royal Family as they travelled around the UK during this time.
The Government’s priorities were that these events ran smoothly and with the appropriate level of dignity, while at all times ensuring the safety and security of the public.
As Departments finalise their accounts ahead of publication in the coming months, the Government are now able to publish an estimate of the costs associated with delivery of these events by the main Government Departments and devolved Administrations involved, as follows.
All figures are the marginal costs, meaning money spent specifically on the events, as opposed to costs that would have been incurred in any case. Where necessary, additional funding was provided by the Treasury to meet these costs. This included fully refunding the Scottish Government, Welsh Government and Northern Ireland Office for their respective costs, which in turn they were able to repay to partners who also incurred costs.
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Cost of Living
John Glen Excerpts(1 year, 7 months ago)
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The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; further welcomes the Government’s action to take advantage of the opportunities presented by Brexit, including the passage of the Genetic Technology (Precision Breeding) Act which will boost UK food security; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; and notes that the SNP and Labour would fail to grip inflation or boost economic growth with their plans for the economy, which would simply lead to unfunded spending, higher debt and uncontrolled migration.”
The world has been challenged by a series of events, including covid and the war in Ukraine, with knock-on effects to economies in every continent. In each of those, the Government have risen to the challenge. When covid hit our shores and the entire country had to isolate to save lives, we delivered groundbreaking and historic support to keep businesses afloat and families going. When our ally and friend Ukraine was invaded, we led the way to provide support internationally, and we continue to do so. The Prime Minister just yesterday announced further air defence missiles and support for our ally. Now, with economic challenges at our door, we continue to take the actions necessary to support the most vulnerable and set our country up for long-term, healthy, sustainable growth.
Already, as a consequence of the steps we are taking and decisions we have made, our country has avoided a recession. The International Monetary Fund has said that we are on the right track. Measures in the spring Budget deliver the largest permanent increase in potential GDP the Office for Budget Responsibility has ever scored in a medium-term forecast. That is as a result of Government policy. We have grown the economy faster than France, Japan and Italy since 2010, and at about the same rate as Germany since 2016. Just today, we see the unemployment rate remaining historically low. Inflation of course remains a concern, and we cannot afford to be complacent.
While I would not usually seek to give economic lessons to Members on the SNP Benches, it seems to be worth explaining in this instance that the reality is that high inflation in our country cannot be separated from global events. Other countries are experiencing similar situations to the UK. In the UK, inflation has primarily risen because of Putin’s illegal invasion of Ukraine and global supply chain pressures, which have pushed up the price of energy, goods and raw materials. Domestic inflationary pressures have also risen, as the UK labour market has remained tight, and challenges in recruitment have been reflected in strong wage growth. That has also pushed up the cost to firms of producing their goods and services, and that has been passed on into higher prices.
If we are to answer the challenge of high inflation, we must first accept that high inflation is a global challenge, which many major central banks are tackling. Nevertheless, I know that right now for many in society rising prices, including rising food prices, are causing worry and significant anxiety. People want to know when things will get back to normal and how they will be supported in the interim. Let me answer that directly. The Prime Minister pledged to halve inflation this year, and the latest Bank of England forecast published last Thursday shows that we are on track to meet that pledge. From its peak above 11% at the end of last year, inflation has begun to fall. Both the Bank of England and the OBR forecast that inflation will quickly fall later this year. We are also focused on growing the economy, reducing the burden of public debt, cutting NHS waiting times and stopping the boats. Those are all priorities of the British people, and therefore they are this Government’s priorities, too.
Alan Brown (Kilmarnock and Loudoun) (SNP)
How does stopping the boats help the cost of living crisis?
John Glen
The point I was making was that stopping the boats is a priority for the people of this country, and this Government are focused on the priorities of the people of this country. We are on track to meet these pledges to make our country and all nations, including Scotland, better off. It is also worth remembering that Scotland already has one of the most powerful devolved Parliaments anywhere in the world. The Scottish Government have substantial tax powers, including in relation to income tax, and agreed borrowing powers to further increase their spending, which I am sure the First Minister will be considering.
David Linden (Glasgow East) (SNP)
The Minister talks about Scotland having one of the most powerful devolved Parliaments in the whole world. How does he feel about Lord David Frost’s accusations that it has too much power and some of it should be taken away? Is that official Government policy now?
John Glen
I am not aware that Lord Frost is a member of the Government. I speak for the Government, and I am clear about what the situation is.
As it stands, the Scottish Government are well funded to deliver all their devolved responsibilities. The 2021 spending review set the largest annual block grant in real terms of any spending review settlement since the devolution Act, and that provided an average of £41 billion a year for the Scottish Government. That settlement is still growing in real terms over the three-year spending review period, despite inflation being higher than expected. On top of record spending review settlements, as a result of UK Government decisions at the autumn statement and the spring Budget, the Scottish Government will receive an additional £1.8 billion over the next two years. All that means that the Scottish Government are continuing to receive around 25% more funding per person than equivalent UK Government spending in other parts of the UK.
Chris Stephens (Glasgow South West) (SNP)
Since the autumn statement, food inflation has risen and is now at 19.2%. Can the Minister tell us what specific measures the Government will put in place to address food inflation?
John Glen
I fully acknowledge the pressures of food inflation—they are in line with those of many of our friends and neighbours, but less than in Germany, for example—and I will come on in a moment to set out the interventions the Government have specifically made to deal with that.
In addition, we are investing directly in Scotland, with £349 million of funding allocated through the first two rounds of the levelling-up fund, as well as establishing two new green freeports. As the Prime Minister has already said,
“all this talk of needing any more powers is clearly not appropriate”.
The SNP and the Scottish Government do not fully use the powers they have already. While, as we have seen today, SNP Members speak about a referendum that I do not believe they have a mandate for, we are levelling up and investing directly in local communities across Scotland.
Let me address the points raised by the hon. Member for Glasgow South West (Chris Stephens).
Alan Brown
If this Union is so successful, so good for Scotland and we benefit so much, why do we need money out of a so-called levelling-up fund?
John Glen
I think the principle of levelling up across the United Kingdom recognises that we do not have symmetry across the local economies of the United Kingdom, and it is about investing to improve the productive capacity. Let me make some progress.
Let me look at the economic matters at hand. As I mentioned earlier, energy costs have contributed significantly to price rises. That is why we are paying half of people’s energy bills. At the Budget, we announced that the energy price guarantee will remain at £2,500 for the next three months, funded in part by the energy profits levy. Just under £26 billion between 2022-23 and 2027-28 is expected to be raised by the levy, on top of around £25 billion in tax receipts from the sector over the same period through the permanent tax regime. This measure is saving the average family a further £160 on top of the energy support measures already announced. That includes this Government’s help for all domestic electricity customers with £400 off their energy bills through the energy bills support scheme, and in providing a £200 payment for households that use alternative fuels such as heating oil through the alternative fuels payment scheme.
Alongside holding down energy bills, increasing benefit payments, increasing pension payments, a council tax rebate, the multibillion-pound household support fund—attracting Barnett consequentials—and freezing fuel duty, we are giving up to £900 in cost of living payments to households on means-tested benefits. That means that more than 7 million households across the UK have been paid a £301 cost of living payment by Wednesday 3 May as the first of three payments. This will be accompanied by a £150 payment for people on eligible disability benefits this summer, and a £300 payment on top of winter fuel payments for pensioners at the end of 2023. The latest payment follows on from up to £650 in cost of living payments delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households. Altogether, support to households to help with higher bills is worth £94 billion, or £3,300 per household on average across 2022-23 and 2023-24. Aside from helping the most vulnerable, the OBR’s analysis shows that, taken together, the freezing of fuel duty, changes to alcohol duty and the extension of the energy price guarantee will further lower consumer prices index inflation by 0.7 percentage points this year.
Peter Grant (Glenrothes) (SNP)
Could the Minister explain to me what has happened to the energy coming out of a country such as Scotland, which is a net exporter of energy, that suddenly makes it almost three times as expensive as it was before? Where is the 200% or 300% increase that people are paying on their fuel bills going? It is not going to the people of Scotland, so who is taking that money?
John Glen
I have set out the number of interventions we have made to support individuals and the taxation levies on energy companies that we have set.
With inflation running high, I understand the temptation of some to accuse companies of profiteering, and the hon. Member for Paisley and Renfrewshire South (Mhairi Black) mentioned that in her opening speech. I would like to be clear with the House that the Government stand against that practice. At a time of high inflation, companies should not be seeking financial gain at the expense of their customers. Fortunately, we have not seen widespread evidence of this in the UK thus far. Corporations’ gross profits as a percentage of GDP were 21.4% in the third quarter of 2022, which is in line with an average of 22% over the last 20 years. The net rate of return for non-financial companies—a measure of company profitability—fell in the third quarter of 2022 and remains lower than 10 years previously. Instead, companies have been hit by a combination of rising labour, energy and raw material costs, and have reacted accordingly. As I have said, and it bears repeating, we do not expect them to profit excessively, but we cannot expect them unsustainably to absorb all cost increases, so the best course of action is the course we have charted thus far—to bear down on inflation.
This is a Government of action and delivery, as I have set out. We have pledged to tackle inflation, bring down debt and grow the economy, and we are doing just that. We said we would help the most vulnerable through these challenges, and we are, and we have refined and developed those interventions to suit the evolving circumstances. We are focused on strengthening our great Union, halving inflation by the end of the year, easing the pressure on households, and boosting the economy and protecting growth—proving our economy is more resilient than predicted—as well as boosting employment to well above pre-pandemic levels and ensuring more people have the security of a steady wage. As a united Government, we will continue to remain focused on what really matters to the British people.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Public Service Pensions: Cost Control Mechanism and the Reformed Scheme Only Design
John Glen Excerpts(1 year, 7 months ago)
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The Chief Secretary to the Treasury (John Glen)
The Government have today published a policy statement on the cost control mechanism (CCM) in public service pensions titled “Public Service Pensions—the Cost Control Mechanism and the Reformed Scheme Only Design”.
Following recommendations from the Independent Public Service Pensions Commission (IPSPC) in 2011, the CCM was introduced into the valuation process for the reformed public service pension schemes in the Public Service Pensions Act 2013 following consultation with member representatives. It was designed to ensure a fair balance of risk regarding the cost of providing defined-benefit (DB) public service pensions between members and the taxpayer. If, when the CCM is tested, scheme costs have increased or decreased by more than a specified percentage of pensionable pay compared to a target cost, then member benefits—and/or member contributions—in the relevant scheme are adjusted to bring costs back to target.
Following a review by the Government Actuary and a full public consultation process, the Government confirmed in October 2021 that it would implement three reforms to the CCM in time for the 2020 valuations:
Reformed scheme only design;
Wider 3% cost corridor; and
Economic check.
The policy statement published today provides further details on how the reformed scheme only design will operate from the 2020 valuations onwards, in particular with regard to those pension scheme members in scope of the remedy for the McCloud litigation.
“Reformed schemes” in this context mean the public service pension schemes introduced as part of reforms following the IPSPC review, from 2015 for most public service pension schemes and from 2014 for the local government pension scheme for England and Wales. The reformed scheme only design means that the CCM will only consider past and future service in the reformed schemes, with legacy scheme costs excluded from the mechanism. This will lead to a more stable CCM and ensure consistency between the set of benefits being assessed and the set of benefits potentially being adjusted, thereby ensuring fairness for both taxpayers and scheme members.
However, pension scheme members of most schemes in scope of the McCloud remedy will have a choice between benefits in respect of their service from 1 April 2015 and 31 March 2022 to be calculated on the basis of the reformed scheme or the previous, legacy public service pension scheme. The policy statement confirms that all service on or before 31 March 2015—31 March 2014 for the local government pension scheme in England and Wales—will be excluded from the CCM as this service is exclusively in the legacy schemes. All service from 1 April 2022 onwards will be included in the CCM, as this service will be exclusively in the reformed schemes. In particular, the statement provides details of how service during the McCloud remedy period—1 April 2015 to 31 March 2022 for most schemes—will be treated under the reformed scheme only design and concludes that McCloud remedy costs will not have a material impact on the CCM from the 2020 valuations onwards.
The full policy statement can be found at: www.gov.uk/government/publications/public-service-pensions-cost-control-mechanism-and-the-reformed-scheme-only-design
A copy has been placed in the Libraries of the House.
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Oral Answers to Questions
John Glen Excerpts(1 year, 7 months ago)
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John Stevenson (Carlisle) (Con)
The Chief Secretary to the Treasury (John Glen)
I would like to inform the House that the Chancellor is not with us today because he is at the G7 in Japan.
The refocused investment zones programme will grow the UK economy and bring investment to areas that have traditionally underperformed economically. The programme will catalyse 12 high-potential, knowledge-intensive growth clusters across the UK, including four across Scotland, Wales and Northern Ireland, in our key future sectors.
Peter Gibson
I warmly welcome the Government’s announcement that the Tees valley will be the location of one of their new investment zones, and this £80 million investment will unlock new opportunities for my region. Does my right hon. Friend agree that this is further evidence of levelling up for Darlington and the Tees valley? Can he outline a timescale for when we will see things start to happen?
John Glen
The Tees Valley investment zone will boost productivity and drive sectoral growth while providing benefits for the local communities that my hon. Friend represents. The Government want to make rapid progress on delivering investment zones. We are engaging with partners to ensure that we can support those with the ambition to move at speed, and we intend to have all proposals agreed by the end of the financial year, and sooner if at all possible.
John Stevenson
Business investment and wealth creation will clearly be central if we are to rebalance the economy and close the gap between less successful and more prosperous areas. Would the Minister therefore agree that prioritising investment zones in areas that need a helping hand is the right course of action? And does he envisage an investment zone in the borderlands area in the near future?
John Glen
My hon. Friend is tireless in his advocacy for his constituents. The areas of England that are eligible to host an investment zone were identified through a rigorous analytical assessment that reviewed every place in England and shortlisted based on their strengths in innovation, productivity, potential and levelling up need, as well as the strength of local leadership, knowledge assets and sectoral strengths.
The borderlands area is already benefiting from the £452 million borderlands growth deal, which was signed just two years ago and aims to create 5,500 jobs. My hon. Friend is also familiar with the recent £134 million investment signed off through the housing infrastructure fund, leading to 10,325 homes in St Cuthbert’s garden village.
Jim Shannon (Strangford) (DUP)
The Minister mentioned the four investment zones, including one for Northern Ireland, in his opening answer. Of course I make a plea for my constituency, as everyone will. What discussions has he had with the Department of Finance back home about a potential investment zone in Strangford, to ensure that people in my constituency can have the same opportunities as people across the United Kingdom?
John Glen
I think the whole House will agree that the hon. Gentleman must be the most effective advocate for his constituents. We will see what happens. There will be a rigorous process, including wide consultation, and we expect to have an outcome that benefits his constituents and people across Northern Ireland.
Stewart Hosie (Dundee East) (SNP)
The incentives offered by investment zones include 100% business rates relief and enhanced capital allowances. With the exception of reduced national insurance contributions, it is hard to see the difference between an investment zone and an enterprise zone. What additional fiscal support are the Government providing to differentiate these investment zones from enterprise zones?
John Glen
The key distinction is that we have identified areas that have clusters, often relating to a university, and that have potential in a key sector. The investment zones will be worth £80 million over five years, and we are obviously working very closely with partners. It is difficult to be precise about the numbers, because there will be bespoke collaborations depending on which sectors are involved.
Stewart Hosie
I thank the Minister for his answer but, of course, enterprise zones and, indeed, their near cousin, the freeport, also spoke about clusters in the same kind of language. What steps are the Government taking to ensure that investment zones do not suffer from the same problem as enterprise zones and freeports, which was a woeful failure to deliver the number of permanent, good-quality jobs that was initially promised?
John Glen
That is a legitimate concern to raise and it is why we have followed the analytical approach to which I referred. We will be working closely with the Department for Levelling Up, Housing and Communities to look at each proposal by the end of the year. We will be having that certainty on the tax incentives over those five years and making local authorities an accountable body for the delivery of this. The right hon. Gentleman’s whole political doctrine is about the distinctions that exist in different communities around the United Kingdom, and that is why we have a variety of interventions designed to make an effective impact in different places across the UK.
Munira Wilson (Twickenham) (LD)
The Chief Secretary to the Treasury (John Glen)
The Chancellor has regular discussions with Cabinet colleagues on a range of issues. The autumn statement 2022 provided an additional £2.3 billion in funding for schools this year and next, over and above the totals announced at the spending review in 2021. That means that school funding next year will be £58.8 billion, exceeding 2010 levels of per pupil funding in real terms. That will help schools to manage costs, including those of school meals.
Munira Wilson
Since Liberal Democrats in government rolled out universal infant free school meals in 2014, funding for them has increased by just 11p. Given the soaring food costs, that is resulting in a real shortfall in meeting schools’ costs, which is having to be subsidised by cutting teaching budgets. The shortfalls range from 11p per meal in my local authority area of Richmond upon Thames to as much as 39p per meal in Hampshire. Will the Treasury provide the extra cash so that free school meal funding reflects the true costs that schools face or will the Minister continue to leave our schools and children short-changed?
John Glen
I do not agree with that analysis. The free school meals funding for 2023-24 was set in line with precedent every year, using inflation forecasts in the autumn prior. About 1.9 million pupils are claiming a free school meal at lunchtime, which equates to 22.5% of pupils in state-funded schools; together with the 1.25 million infants supported through the universal infant free school meal policy, this is having an impact. However, I recognise the pressures across the whole economy, which is why, as I said, the Government gave those additional funds in the autumn statement last year.
Bob Blackman (Harrow East) (Con)
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Chief Secretary to the Treasury (John Glen)
The Government are taking action to protect struggling families by providing support, worth £3,300 per household on average over this year and last, to help with higher bills. That includes targeted support for the most vulnerable in our society through additional cost of living payments and the uprating of benefits by 10.1% this year. The Government have also increased the national living wage by 9.7%, representing an increase of more than £1,600 in the annual earnings of a full-time worker on the national living wage.
Alexander Stafford
Does my right hon. Friend agree that the best support in the cost of living crisis, beyond the £94 billion that the Government have already spent, is the cutting of inflation to ease pressures—especially on food, fuel and energy—for families in Rother Valley and up and down the country?
John Glen
I absolutely agree. The Government are doing three things to reduce inflation: we are remaining steadfast in supporting the independent Monetary Policy Committee at the Bank of England as it continues to take action to return inflation to target; we are making responsible decisions on tax and spending, so that we are not adding fuel to the fire; and we are tackling high energy prices by holding down energy bills for households and businesses, alongside investing in long-term energy security.
David Simmonds
Lowest-income households in my constituency are the biggest beneficiaries of a strong economy. Does my right hon. Friend agree that reducing debt, reducing inflation and balancing the books are the most effective Government interventions to support low-income households?
John Glen
Absolutely. It is right that we continue support for the cost of living challenges. I have mentioned the energy price guarantee; we are also sticking to that plan to avoid unnecessary inflationary pressure. [Interruption.] On average this year, as a result of Government decisions made from—[Interruption.]
Mr Speaker
Order. Members will have to continue their conversations at another time. Carry on, Minister.
Sarah Champion (Rotherham) (Lab)
I listened with interest to the answer that the Minister gave about support for households, but it does not match the reality in Rotherham, where constituents have had increases in rent, mortgages, fuel and food, as well as cuts to public services. What is he going to do to deliver the support that we need to make ends meet, because the offers on the table are not cutting it?
John Glen
Everyone can see that the Government have made a range of interventions over the past two years, which means support for all of those on means-tested benefits—8 million people. Eight million pensioner households will benefit from the non-discretionary payments, effectively. The household support fund, which we repeated, provides another £1 billion to give local authorities discretion in individual circumstances to offer supplementary support. Of course, I recognise that this is an incredibly challenging time for the most vulnerable, but we have tried to target those interventions on them, listening to the Low Pay Commission and increasing the national living wage to £10.42. We recognise that these are difficult times, but we will get through them.
Daniel Zeichner (Cambridge) (Lab)
The Chief Secretary to the Treasury (John Glen)
As the Minister for public spending, I oversee the Government’s budgeting system, and a key element of that is incentivising Departments to manage spending effectively so that value for taxpayers’ money is maximised. That is why the Government launched an efficiency and savings review at the autumn statement 2022. Through the review, Departments re-prioritised and identified further efficiencies, building on the 5% efficiency challenge set out in the spending review 2021, to better deliver value for money for the taxpayer.
Afzal Khan
The then Chancellor, now Prime Minister, spent £1.3 million of public money on focus groups, which included asking what the public thought of him. Following the public’s resounding rejection of the Tories in last week’s elections, we now know what the public think of him. Will the Government stop wasting taxpayers’ money to boost the Prime Minister’s ego, do the right thing and call a general election?
Nick Smith
Some £7.9 billion was wasted on useless and overpriced personal protective equipment; meanwhile, opportunists who saw the Tories coming are now profiteering on the back of the public purse. Does the Minister regret that this money was not spent wisely? Nearly £8 billion could buy us 20 new hospitals.
John Glen
Our priority was clear throughout the covid crisis, and that was to get PPE to the frontline as quickly as possible. Due diligence was carried out on all companies that were referred to the Department. Despite all those steps being taken, some instances of fraud did occur with unscrupulous suppliers taking advantage of the situation. This Government take that fraud seriously, and the Department of Health and Social Care is exploring every available option to bring those who commit fraud to account. We have also made a number of other interventions, including investment in the taxpayer protection taskforce to normalise higher compliance activity in HMRC, alongside other measures to deal with fraud elsewhere in some of the emergency schemes that we set up to help this economy and this country get through covid.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Last week, the Public Accounts Committee revealed that our country lost £9 billion-worth of tax revenue during the pandemic because HMRC redeployed 4,000 staff members whose jobs were to chase down tax avoiders. The Prime Minister was Chancellor at the time and presumably signed off that decision. Can the Minister tell me whether the Prime Minister did that as a deliberate act to give the green light to tax avoiders, or is it just another example of Tory incompetence?
John Glen
I think that is a ridiculous suggestion, to be honest. HMRC received £863 million to modernise the tax system, and that included £136 million invested over the spending period to deliver improvements in terms of a single customer record and account. On what happened over covid, I have already set out the investment we made, including the £100 million in the taxpayer protection taskforce. We take fraud very seriously. Now it is about HMRC looking at financial records of excessive trading to come to terms with those businesses that used some of those schemes fraudulently. We will continue to work on that.
Ashley Dalton (West Lancashire) (Lab)
The Chief Secretary to the Treasury (John Glen)
Three of the Prime Minister’s five priorities are economic priorities: to halve inflation this year, to grow the economy and to reduce debt. We are on track to halve inflation this year to ease the cost of living. We have taken the difficult, but responsible decision needed to get net debt falling and secure the future of public services, and we have a clear plan to grow the economy to create better paid jobs and opportunity right across the country.
Ashley Dalton
The consumer voice organisation Which? has recently found that 2 million UK households missed a key payment for their mortgage, rent, loan or credit card. Last month alone, 700,000 of these related to housing, so when will the Tory Government wake up to the fact that the cost of living crisis is far from over and what do they intend to do about it?
John Glen
In previous answers, I have set out a number of the interventions the Government have taken to help the most vulnerable. I have mentioned the household support fund, the benefits that accrue to all those who are on means-tested benefits, particularly pensioner households, and those who are eligible for disability benefit. As I have also said, the money that the Government have made available is designed to focus on those who are most in need, and we will continue to look out for the most vulnerable through this difficult time.
Gareth Bacon (Orpington) (Con)
John Glen
I could not agree more. Responsible public spending is at the core of getting our economy into a state where it can grow, and the £90 billion of unfunded spending pledges made by Opposition Members will be scrutinised very carefully, I am sure, by many in the months ahead.
Rachel Reeves (Leeds West) (Lab)
The Conservatives have now had 13 years in office—wages lower, the weekly food shop astronomical, energy bills unprecedented, 24 Tory tax rises and the national debt has ballooned —so can I ask: after 13 years of Conservative Government, does the Minister think that people feel better off, or worse off?
John Glen
What I can tell the right hon. Lady is that, since 2010, there has been a 25% increase in real take-home pay for workers on the national living wage and, recently, the national living wage increased to £10.42 an hour—a 9.7% increase—for those over the age of 23. In 2009-10, there was a deficit of £158 billion. Before we got into covid, it was down to £38 billion. We have gone through the most tremendous challenges that this country has seen for about 100 years. I think most people in this country understand that this Government have acted on the challenges we have faced in office.
Rachel Reeves
The Government have had 13 years, and the answer to the question “Do people feel better off?” is a resounding no. This morning, I met 22 newly elected council leaders from the Labour party, who are creating emergency plans to help to tackle the cost of living crisis in their communities. Why will the Conservative Government not play their part, do the right thing, close the loopholes in their oil and gas tax and help working people in Britain, as a Labour Government would do?
John Glen
I congratulate those successful across the country in last week’s elections, but what business leaders want and what the country wants is steady policy making, delivering growth in the economy, dealing with the biggest scourge on the economy, which is inflation—[Interruption.] The right hon. Lady says from a sedentary position that we have had 13 years. We spent £400 billion when we had a global pandemic, where we had to shut down the economy. When we came out of it, we had high inflation consequential on a war that we have not had in Europe for over 70 years. Those are the realities and that is what this Government have responded to.
Kevin Foster (Torbay) (Con)
John Glen
I am always happy to meet my hon. Friend. I congratulate him on his leadership of his council candidates last week and the excellent result that he secured. Of course, we have invested in many coastal communities across the country, and we are keen to discuss the specifics of how the Government can support him as he drives that local constituency and economy forward.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
John Glen
No, I do not recognise that characterisation. What I recognise is that the Government are determined to see the economy grow. I see investment in investment zones focused in the hon. Lady’s region, working with the excellent universities that she is familiar with. I see a Government who are putting £100 million into the foundation model taskforce, £900 million to invest in a supercomputer to fund AI, a quantum strategy that is generally seen as world leading, as well as £160 million of investment in the tech sector. So this is a Government who are committed to the growth industries of the future.
Jane Hunt (Loughborough) (Con)
John Glen
Delivery of new hospital infrastructure and prioritisation within health budgets is a matter for the Department of Health and Social Care, but I know from frequent conversations with the Secretary of State that he is working tirelessly to ensure as many new hospitals as possible, and that wider improvements to the health estate can occur. I shall make representations to him after these questions.
Andrew Gwynne (Denton and Reddish) (Lab)
John Glen
I am sorry, I cannot answer that question. But I am happy to meet the hon. Gentleman to look at the serious matter he has raised and get an answer for him.
Richard Fuller (North East Bedfordshire) (Con)
The Chief Secretary to the Treasury knows that the long hidden business case for East West Rail represents a bad deal for taxpayers, and that MPs from across Parliament have written about greener, better alternatives for growth in the Ox-Cam arc. He will know that on Thursday the Conservatives won the mayoralty in Bedford for the first time because the Conservative candidate, Tom Wootton, called for a review of Bedford Council’s working and its support for East West Rail. Will my right hon. Friend meet me to discuss that further urgently?
John Glen
I would be happy to meet my hon. Friend, and congratulate the Mayor of his home town of Bedford for the success he had last week.
Dr Luke Evans (Bosworth) (Con)
I thank the Chancellor for two weeks ago meeting Leicestershire MPs and the senior leadership of the county council to discuss funding there. Of particular concern is the core funding of special educational needs and disabilities, social care and transport such as buses. What more can the Minister do to address the problems with county council funding that we have in Leicestershire?
John Glen
I know my right hon. Friend the Chancellor welcomed that meeting on 25 April. The Government remain committed to improving the local government finance landscape, and in doing so they will work closely with local partners, including Leicestershire, and take stock of the challenges and opportunities across the sector. I thank my hon. Friend for his deep thinking into how improvements can be made.
Mike Amesbury (Weaver Vale) (Lab)
Why are the Prime Minister and Government Ministers so keen to protect non-dom status while not investing sufficiently in our NHS, as Labour would do?
Jonathan Gullis (Stoke-on-Trent North) (Con)
Day one on the job and Labour in Stoke-on-Trent talk about cancelling the £56 million of levelling-up funding, which is UK-leading, going to the great city of Stoke-on-Trent. Will the Chief Secretary to the Treasury confirm that the Conservative Government will have the backs of the people of Stoke-on-Trent and deliver this important levelling up?
John Glen
We are very committed to the people of Stoke-on-Trent and recognise that enormous investment, thanks to my hon. Friend’s work in campaigning for investment through the levelling-up fund. It is down to the council to deliver on that significant investment and make a difference on the ground.
Dave Doogan (Angus) (SNP)
The transition to net zero should be the overarching priority for all of us. With that in mind, when will the Treasury finally get its act together with the Acorn project in the north-east of Scotland and accelerate its funding to ensure that the people of the north-east of Scotland do not just have to listen to warm words about the just transition, but can get a job in the just transition?
John Glen
I think that we have made commitments on the first phase. The Chancellor is considering the next steps further and will update the House in due course.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Financial Times is reporting today that there have been meetings between the Treasury and the Department of Health and Social Care about compensation for victims following the infected blood inquiry. Will the Minister confirm that those meetings have taken place and who was present, and offer reassurance to those who were infected and affected that compensation will be implemented in full, as Sir Brian Langstaff has recommended?
John Glen
I believe that the Minister for the Cabinet Office updated the House on this matter a couple of weeks ago, and I am sure that he will be keen to do so again when those conversations have taken place.
Hannah Bardell (Livingston) (SNP)
This morning, before I left my constituency, I attended a rally organised by “Hands off Howden Park” and “Save our Pools”, which are two incredible campaigns in my constituency trying to protect our arts venues and pools from closing. Unfortunately, they have been mismanaged by the Labour and Conservative administration, and those results are the reality to be faced after a decade and a half of austerity has decimated public funding. When will the Government stop wasting money on things like Brexit and nuclear weapons and properly fund our pools and arts venues?
John Glen
We do not typically make specific decisions on local authorities from Whitehall, but we have committed to significant additional funds for local authorities and funding for the Scottish Government through the Barnett formula. I will leave the hon. Member to continue to lobby and campaign with her constituents to get those decisions made on the ground.
Cost of Living Increases
John Glen Excerpts(1 year, 7 months ago)
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The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; notes the use of a windfall tax on energy firm’s profits to pay around half of the typical family’s energy bill through the Energy Price Guarantee, also notes the fact that the Government has frozen fuel duty for 13 consecutive years to support motorists; welcomes the expansion of free childcare to all eligible parents of children aged nine months to four years old; and notes that Labour will fail to grip inflation or boost economic growth, with their plans for the economy simply leading to unfunded spending, higher debt and uncontrolled migration.”
Even in times of economic challenge, this is a Government who prioritise helping families face down the cost of living. I think Members across all sides of the House recognise that having come through the covid crisis, families and businesses across the country have felt additional global headwinds. After two decades of low inflation, the world has been confronted with fast-growing prices. We are not alone. While we tackle this, our friends in Ukraine are at war and we are supporting them diplomatically, militarily and economically. We have faced down those challenges while supporting our economy and, because of the action we took, we avoided a recession. Our sensible, credible economic plan is working. The International Monetary Fund said we are on the right track, unemployment remains very low by historic standards, and measures in the spring Budget deliver the largest permanent increase in potential GDP that the Office for Budget Responsibility has ever scored in a medium-term forecast, as a result of Government policy.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I realise that this will bring back painful memories for the right hon. Gentleman, but he may recall that the previous Prime Minister crashed the economy. The UK has been uniquely impacted. The issues with Ukraine and covid are impacting the rest of the world, but they are impacting the UK in a slightly different way because of the previous Prime Minister’s actions. I know that the right hon. Gentleman wishes to erase all memory of that, but he must acknowledge that her actions have had a consequence, and the British taxpayer is still paying the price.
Paul Bristow
Could my right hon. Friend help me? Some of the faces on the Opposition Benches seem so glum because we have avoided a recession—could he explain why?
John Glen
My hon. Friend is right. I approach the job of government with a sense of humility about the challenge we face.
I recognise that we have made significant progress in recent months—that has been generally acknowledged. I will now set out where else we will make progress. Although it is welcome that wholesale energy prices have been falling, many families remain under significant pressure. The Government understand that. Food prices are contributing to headline inflation. Rising food prices, however, are not a unique issue to the UK, as my hon. Friend the Member for Wantage (David Johnston) pointed out. It is a problem that advanced economies are facing. For example, as he correctly pointed out, in Germany, food price inflation is above 22%. We are fully alive to the fact that some people remain in real distress. I want to assure Members and their constituents that we will always stand ready to help where we can.
Dr Luke Evans
Is it not about compassion in government? That is why pensioners on a fixed income and people on benefits will receive a 10% increase. Also, the fourth iteration of the household support fund is there directly to help the most vulnerable to get through those tough times.
John Glen
My hon. Friend is absolutely right. In a moment I will set out exactly what interventions we have made and how we are continuing to intervene to support the most vulnerable in our communities across the United Kingdom.
The best thing we can do to help people’s money go further is to deliver on our plan to halve inflation and grow the economy. In doing so, we will meet the Prime Minister’s five pledges to the British people. Three of those are economic—two of which I have mentioned—and reflect people’s priorities. Inflation makes us all poorer. It has to be tackled head-on, which is why, working closely with the Bank of England, we are bearing down on it. We are also growing the economy.
John Redwood (Wokingham) (Con)
Will the Minister confirm the IMF figures that in 2020 to 2022—that important three-year period after we left the EU—the UK was the fastest growing economy of the G7? The Opposition’s forecast that the UK might be a poorer performer this year is just a forecast, and most forecasts are usually wrong.
John Glen
As always, my right hon. Friend is on the money. The point is that forecasts predict many different things. I have been in the Treasury for nearly five years; forecasts for every fiscal event rarely prove to be true at the next fiscal event.
We must continue to focus on taking the right decisions, decision by decision, and prove those forecasters wrong. That means long-term, sustainable and healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world. It also means reducing debt, which we are on track to do. In fact, because of the decisions we have taken and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than back in the autumn. That means more money for our public services and a lower burden on future generations—deeply held Conservative values, which we put into practice today. It is these steps that will make our country and our people better off. We are also taking action to shelter the most vulnerable while we achieve these longer-term ambitions for the economy.
In the Budget, we announced that the energy price guarantee would remain at £2,500 per year until July 2023. That was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to very high oil and gas prices caused by global circumstances, including of course Russia’s invasion of Ukraine. The levy is expected to raise just under £26 billion between 2022-23 and 2027-28, on top of around £25 billion in tax receipts from the sector in the same period through the permanent tax regime. The energy price guarantee measure will save the average family a further £160 on top of the energy support measures already announced, bringing total Government support for energy bills to £1,500 for the typical household since October 2022.
It is worth recapping those measures. This Government have helped all domestic electricity customers with £400 off their energy bills through the energy bills support scheme. The energy bills support scheme alternative funding provides £400 to around 900,000 households that are not supplied by domestic electricity contracts and are unable to receive support automatically through the energy bills support scheme.
Our support has not stopped there. Alongside holding down energy bills, freezing fuel duty and increasing universal credit, we are giving up to £900 in cost of living payments to households on means-tested benefits. Starting from today, over 8 million families across the UK will receive the first £301 cost of living payment from the Government. That is the first of up to three payments for those on means-tested benefits, totalling £900 through 2023-24. Those entitled do not need to apply for the payment or do anything to receive it. The payments will be accompanied by a payment of £150 for people on eligible disability benefits this summer and a payment of £300 on top of winter fuel payments for pensioners at the end of 2023.
These are carefully designed interventions, targeted at the most vulnerable across communities in the United Kingdom. The latest payment follows on from the £650 cost of living payment delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households.
The Government of course need to recognise that some people will fall into difficulties. They have enabled local authorities to provide additional support with the cost of household essentials through a 12-month extension to the household support fund in England worth £1 billion, including Barnett funding. We are also ensuring that more than 10 million working-age families will see an increase in their benefit payments from April 2023, based on the September inflation figure of 10.1%.
While we shelter the most vulnerable, the public also rightly expect us to look further to the future, making sure we are taking steps to grow sustainably and securely in the long term. This Government are unashamedly pro-growth, because expanding the productive capacity of the economy is the only way to solve the productivity puzzle, which has dogged us for decades, and improve living standards for all.
One reason we are held back is because a great number of people have left the labour market altogether. As a Conservative, I believe there is virtue in work and getting people into work is the best way to avoid the ills and perils of poverty. There has been an increase of more than 1.5 million working households since 2010, which shows that we are on the side of working families. That includes our new game-changing childcare offer that will entitle working parents in England to 30 hours of free childcare per week, once their child is nine months old, and close the gap between parental leave ending and the current childcare offer.
In addition to making provision on free childcare, the Budget set out to remove barriers for the long-term sick and disabled, for jobseekers and for older people with our pension tax reforms. Part of the plan is welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a White Paper setting out reforms that will support more people who are long-term sick or disabled to try work without any fear of losing their benefits. Other policies that we announced at the Budget will then ensure that those individuals are better supported to stay and succeed in work. Overall, the Office for Budget Responsibility expects the spring Budget package to result in 110,000 more individuals in the labour market by the end of the forecast period.
The UK saw the fastest growth in the G7 over 2021 and 2022. Cumulative growth over the 2022 to 2024 period is predicted to be higher than that of Germany or Japan, and at a similar rate to that of France or the US. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We are continuing to lay the groundwork for a vibrant, innovative and growing economy that benefits communities and families up and down the country.
Having sat and listened to the shadow Minister—I was not smiling, but reflecting on what I heard—I think it is very unfortunate that the Labour party continues to play politics and snipe from the sidelines without a clear and coherent plan.
Tom Randall (Gedling) (Con)
I notice that the Opposition motion refers to freezing council tax; the shadow Minister also mentioned freezing council tax under Labour. However, Labour-run Gedling Borough Council is increasing council tax by 2.98% this year, in spite of the fully costed Conservative amendment that would have enabled a council tax freeze. Does my right hon. Friend agree that whereas Labour’s rhetoric is about freezing taxes, the reality is tax, tax and tax again?
John Glen
Absolutely, and I think the good people of Gedling will come to the right conclusions next week.
What is really clear is that this Conservative Government will get on with the business of resetting the conditions for growth after this enormously difficult period. We are setting the conditions for protecting the vulnerable and delivering for the British people. As a united Government, we remain focused on what really matters for the British people. I urge the House to reject the Labour motion.
Scottish Government and Welsh Government Funding
John Glen Excerpts(1 year, 8 months ago)
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The Chief Secretary to the Treasury (John Glen)
In addition to changes in funding at supplementary estimates 2022-23, and in line with the statement of funding policy, the Welsh Government are switching £65.000 million from resource DEL to capital DEL (general). £ million Scottish Government Welsh Government Resource DEL excluding depreciation1 36,009.512 15,576.221 Capital DEL (general) 6,063.628 2,694.523 Capital DEL (financial transactions) 348.742 194.714 Total DEL 42,421.882 18,465.457 1Due to the scale of tax devolution in Scotland, Scottish Government DEL funding is shown excluding tax and welfare block grant adjustments. Welsh Government DEL funding is shown including tax block grant adjustments.
The Scottish Government have also been provided with an additional £16.300 million resource DEL in relation to the implementation of international financial reporting standard 16 (IFRS16).
Revised 2022-23 funding is as follows:
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Public Service Pensions: Superannuation Contributions Discount Rate
John Glen Excerpts(1 year, 8 months ago)
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The Chief Secretary to the Treasury (John Glen)
SCAPE—superannuation contributions adjusted for past experience—is the process for setting employer contribution rates at valuations of unfunded public service pension schemes. As part of the SCAPE process, the SCAPE discount rate is used alongside many other factors such as earnings changes, changes to life expectancy and demographic assumptions to determine the appropriate employer contribution rate. Valuations as at 31 March 2020 are currently under way and will result in new employer contribution rates which will be implemented from April 2024.
The current methodology for setting the discount rate, based on the OBR’s forecast of long-term GDP growth, was adopted in 2011. At the time, the Government expressed an intention to review the discount rate methodology every 10 years. A 2021 consultation met this intention and sought views on the most appropriate methodology for setting the SCAPE discount rate.
The Government have today published their response to the June 2021 consultation on the methodology used to set the SCAPE discount rate and have concluded that the existing methodology best meets the balance of the Government’s objectives for the SCAPE discount rate, and therefore do not intend to modify the methodology.1
The SCAPE discount rate to be used as part of the ongoing 2020 valuations will therefore be based on the expected long-term GDP growth figures, published by the OBR in July 2022. Based on these figures, the new SCAPE discount rate is CPI+1.7% p.a.
The Government are aware that the updated SCAPE discount rate will generally lead to higher employer contribution rates for most unfunded public service pension schemes resulting from the 2020 valuations. In recognition of the cost pressure that an increase to the employer contribution rate would bring to existing departmental budgets, the Government have committed to providing funding for increases in employer contribution rates resulting from the 2020 valuations as a consequence of changes to the SCAPE discount rate; this commitment is for employers whose employment costs are centrally funded through departmental expenditure. These funds will be used to pay for employer contributions and therefore will contribute to meeting the costs of public service pensions provision which means this will be cost neutral for the Exchequer.
1 https://www.gov.uk/government/consultations/public-service-pensions-consultation-on-the-discount-rate-methodology.
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Economic Crime Levy Allocations Update
John Glen Excerpts(1 year, 8 months ago)
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The Chief Secretary to the Treasury (John Glen)
Today I am confirming the allocation of £300 million between 2023-24 and 2025-26 generated from the economic crime (anti-money laundering) levy. Announced at Budget 2020, the levy was legislated for in the Finance Act 2022. The levy supplements approximately £200 million of additional Government investment to tackle economic crime over the 2021 spending review period.
The levy funding has been allocated to deliver benefits to the entire anti-money laundering system across both the public and private sector and will underpin the priorities set out in the next three-year, public-private Economic Crime Plan.
Over the next three years, the levy has been allocated to:
Invest over £100 million in state of the art technology which will analyse and share data on threats in real time, to give law enforcement the tools it needs to stay ahead of criminals.
Provide funding for more skilled financial crime investigators. This includes funding to hire 475 new investigators and economic crime training for more than 6,500 existing investigators in the National Crime Agency and across national and regional intelligence, investigation and prosecution agencies. New and better trained officers will lead to more cases investigated, more criminals prosecuted, and more assets recovered.
A further £60 million will fund new specialist intelligence teams in the National Crime Agency and expand the combating kleptocracy cell in order to tackle the most complex global money laundering networks.
Funding for c.75 officers to sustain the increased staffing of the UK financial intelligence unit and provide funding for 22 new financial investigators to analyse suspicious activity reports embedded in regional organised crime units. The suspicious activity reporting regime is a key pillar of the UK’s anti-money laundering (AML) system and is a critical tool for law enforcement to identify and disrupt money launderers.
Invest £20 million in Companies House and the Insolvency Service to fund the creation of two new intelligence teams. These new teams will improve our understanding of how UK companies are misused to launder the proceeds of crime and help put a stop to it. A further £600,000 of funding has been allocated for the deployment of UK experts overseas to raise the global standards on beneficial ownership, multiplying the impact of our domestic reforms to Companies House.
£1.2 million for a dedicated surge team to accelerate the fundamental reform of the AML supervisory regime, leading to more effective risk-based supervision, more dissuasive enforcement, and greater sharing of high-value information and intelligence.
Recognising the importance of accountability and in line with the principle of transparency, this announcement made on 27 March will be followed in 2024 by the publication of an annual report on the operation of the levy. A more wide-ranging review of the levy will be undertaken by the end of 2027. These reports will be laid before Parliament.
[HCWS675]
Oral Answers to Questions
John Glen Excerpts(1 year, 8 months ago)
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David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Chief Secretary to the Treasury (John Glen)
Responsibility for transport and air quality within Greater London is devolved to the Mayor of London and Transport for London via the Greater London Authority Act 1999. It is for the Mayor to assess the economic impact of the proposed expansion of the ULEZ, and to consult properly to ensure that it is not just a tax on the poorest motorists.
David Simmonds
Small business owners and elderly and disabled residents affected by the ULEZ in my constituency are concerned about the fact that the Mayor’s process has not been as independent or robust as it should be. Will my right hon. Friend consider commissioning the Treasury’s own independent assessment of the impact of the ULEZ, so that my constituents and local business owners can really understand how it will affect them?
John Glen
As the Prime Minister said just last week,
“the Mayor of London should listen to the voices of commuters, families”—
including many of my hon. Friend’s constituents—
“and small businesses as he inflicts his…tax on them.”—[Official Report, 15 March 2023; Vol. 729, c. 832.]
As the House has just heard, our Budget last week supported hard-pressed motorists by cancelling the planned increase of about 11p in fuel duty, saving drivers about £5 billion this year.
Robbie Moore (Keighley) (Con)
Martin Vickers (Cleethorpes) (Con)
The Chief Secretary to the Treasury (John Glen)
The Government are committed to creating an environment in which economic growth benefits all. The latest data indicates that productivity in Greater Lincolnshire grew by 8.4% from 2010 to 2020, compared with UK productivity growth of 7.9% over the same period. Coastal communities such as Cleethorpes play a vital role in the economy. I am pleased that, following the announcements on the second levelling-up fund, more than £18 million has been granted for the Cleethorpes masterplan.
Martin Vickers
The county of Lincolnshire has great opportunities for economic development in both rural and urban areas. In particular, the Cleethorpes constituency is a major centre for the renewable energy sector and contains a major port at Immingham. Freeport status has been granted for the Humber freeport, but I understand that we are awaiting final Treasury sign-off. Can the Minister give us an indication of when that will happen?
John Glen
I am pleased to confirm that the full business case for the Humber freeport has now been conditionally approved by the Treasury, with full approval subject to the customs site being designated and the freeport signing a memorandum of understanding with the Department for Levelling Up, Housing and Communities. The Humber freeport is already open for business, supporting the regeneration of the region by creating jobs and attracting new business investment. I am sorry that Treasury processes can sometimes appear tortuous.
Carla Lockhart (Upper Bann) (DUP)
The Chief Secretary to the Treasury (John Glen)
Tax-free childcare provides financial support for working parents with their childcare costs. In addition to tax-free childcare, the Chancellor announced at the spring Budget that all eligible working parents in England will be able to access 30 hours of free childcare a week for 38 weeks of the year, from when their child is nine months old until they start school.
Carla Lockhart
I thank the Minister for his response. When will the Government start to reward the working families of this United Kingdom? We have a Chancellor who is giving tax breaks to the wealthy to top up their pension pots, yet he cannot support working families by increasing the personal allowance or by offering tax-free childcare that supports all families with childcare needs, particularly families with older children. The high-income child benefit charge remains untouched, leaving households that earn much less than others unaffected. Can the Chancellor update us on his plans to reform this deeply unfair practice?
John Glen
I do not accept the overall characterisation that the hon. Lady has given. Just in November last year, 428,000 families and 511,000 children benefited from tax-free childcare. The announcements last week will make a significant contribution, and of course that work will start immediately, with the Department for Education consultation. We have a commitment of £204 million for the coming financial year, and £288 million for the following year, to increase supply so that we can deliver this as quickly as possible.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I congratulate the Treasury team on the excellent new policy of providing much more childcare support to families. Will my right hon. Friend persuade the Chancellor to meet me and a small group of colleagues to talk about the policy in the round and about how we can give more support to all families, providing more flexibility where informal childcare is provided—for example, by grandparents—and ensuring that families who want to look after their children at home are not, in effect, left out and left in poverty as a result of the decisions they make for their family?
John Glen
I thank my right hon. Friend for her question, and I welcomed the chance to discuss this matter at length with her recently. The Chancellor has indicated that he would be happy to meet her, and I would also be happy to meet her again.
Kate Osborne (Jarrow) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government remain committed to full genuine gender equality and to supporting women. In particular, we are supporting women into work through our new childcare package, which I just mentioned, allowing people to return to work sooner; encouraging business investment through schemes such as the community investment tax relief; and creating new job opportunities with our labour market package. In developing proposals for the spring Budget, the Treasury takes care to consider the equality impacts on those sharing protected characteristics, including gender, in line with our legal obligations and the Government’s strong commitment to promoting fairness.
Kate Osborne
I thank the Minister for his response. Let me help him out. If he had made an adequate assessment, he would have found that the spring Budget failed women. It failed young women, women in work and pensioners. Women are more likely to rely on and work in public services, and this Budget made their lives worse, not better. Most of the UK’s poorest pensioners are single women, and the gender pensions gap needs to be addressed. Will he agree to urgently put forward a compensation package to deal with the injustice faced by 1950s women—the WASPI women?
John Glen
I do not accept that. I think the WASPI issue has been covered many times, by Ministers from the Department for Work and Pensions and elsewhere. We are putting in £4.1 billion by 2027-28 to expand free childcare. This Government have a record to be proud of: we have increased the number of women in full-time work; we introduced shared parental leave; we introduced the Domestic Abuse Act 2021; and we made a range of interventions last week that many women up and down the country will be very pleased with.
Mike Amesbury (Weaver Vale) (Lab)
The Chief Secretary to the Treasury (John Glen)
The Government strongly encourage the effective utilisation of brownfield land, whether it was industrial, commercial or residential in its former use. We invest heavily in brownfield remediation programmes, including £1.8 billion at spending review 2021, as well as the levelling-up fund. National planning policy also sets out what planning policies and decisions should give substantial weight to the value of using suitable brownfield land.
Yasmin Qureshi
Bolton town centre is in a parlous state. We lost out in the latest round of levelling-up funding, and the Tory council failed even to send the earlier application for funding. As an ex-industrial town, we have large brownfield mill sites standing derelict and unused, and they are eyesores. We could retrofit them to create affordable social housing to alleviate our housing crisis, develop retail units for new businesses, and support local charities and community groups with such units. With that in mind, what discussion has the Treasury had with Bolton Council and the Department for Levelling Up, Housing and Communities about the merits of such a scheme for the borough?
John Glen
I agree with the hon. Lady that Bolton has great opportunities. Its brownfield register shows that it has more than 100 brownfield sites. Of course, the Government have given the Greater Manchester Combined Authority £150 million—£27 million just last year—to deliver local brownfield remediation. The breadth of the existing funds means that specific land remediation funding is not required, but there is provision in the Greater Manchester area, and I think that she should speak to the metro Mayor about it.
Wendy Morton (Aldridge-Brownhills) (Con)
The west midlands trailblazer devolution deal, launched yesterday, brings further support for regeneration and infrastructure along with £100 million of brownfield funding, which is good news for areas such as mine. Does my right hon. Friend agree that this issue is key to delivering homes and jobs while protecting our precious greenbelt and will he consider that in any impact assessment study that he undertakes?
John Glen
My right hon. Friend makes a very sensible point. This is about finding appropriate development in different communities, and a range of factors will obviously be involved. We have worked closely with local authorities to ensure that we get the right package of measures and legislative changes to enable the development she and her constituents aspire to.
Tommy Sheppard (Edinburgh East) (SNP)
Rachael Maskell (York Central) (Lab/Co-op)
The Chief Secretary to the Treasury (John Glen)
The Government are committed to delivering social and affordable housing and are investing £115 billion in the affordable homes programme from 2021 to 2026. That is the largest investment in affordable housing in a decade and includes investment in supported housing, social and affordable rent and shared ownership.
Rachael Maskell
The affordable homes programme will deliver just 32,000 homes over five years while 1.2 million households are waiting for social houses, yet there was no mention of new money in the Budget last week, which was a massive disappointment in the light of the scale of the housing crisis. In York, we are seeing a net loss of social housing. Will the Chief Secretary ensure that social housing is prioritised, that money comes forward and that we see a real boost to the affordable homes programme so that York, and places like it, can have the housing they need?
John Glen
That is a top priority of this Government and I continue to work with colleagues across the Department for Levelling Up, Housing and Communities and other Departments to deliver it.
Chloe Smith (Norwich North) (Con)
Gareth Johnson (Dartford) (Con)
The Chief Secretary to the Treasury (John Glen)
I am grateful to my hon. Friend, who has met me on a number of occasions to make the case for the Dartford crossing. Obviously, in the current difficult circumstances with inflationary pressures, we have had to make some tough choices, but I want to be very clear with my hon. Friend: we remain committed to delivering it. This is a two-year delay on construction, not a cancellation, and I will continue to update him in due course.
Alexander Stafford (Rother Valley) (Con)
John Glen
I hesitate, because my hon. Friend is so effective in campaigning for his constituency. I am glad that we were able to confirm that extra £20 million in the Budget. We will continue to look with a constructive mindset at all the many bids that he brings forward to the Treasury.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
James Wild (North West Norfolk) (Con)
Given that the Chancellor has protected the new hospitals budget, may I express the huge frustration of my constituents at delays in the announcement that the RAAC-ravaged—reinforced autoclaved aerated concrete-ravaged—Queen Elizabeth Hospital in King’s Lynn will be part of the programme and urge that decisions are announced as soon as possible?
John Glen
Given that I answered this question five weeks ago, I admire my hon. Friend’s consistency. I very much regret that we have not been able to make that decision yet. As I think I said last time, it is a matter for the Secretary of State for Health and Social Care, and conversations have developed. We have made a commitment on the quantum of money, and I will leave it for my colleague to make that announcement imminently.
Jeff Smith (Manchester, Withington) (Lab)
Tulip Siddiq (Hampstead and Kilburn) (Lab)
On a point of order, Mr Speaker. The Minister said to me in her response that the Chief Secretary had just confirmed with her that we had signed the memorandum of understanding on regulatory co-operation with the EU. Could you please advise me whether she meant that both sides had signed and the agreement has been secured with the EU? I cannot find the details anywhere. Can you advise me where MPs are able to see the agreement?
The Chief Secretary to the Treasury (John Glen)
Further to that point of order, Mr Speaker. I can confirm that we have always been ready to sign the MOU, from two years ago—[Interruption.] Well, we have made it very clear to the EU that we are ready to sign. It is a matter for it to come to the table, and we very much hope it will be able to do that. What happened was that as the Financial Secretary came to the Dispatch Box she did not quite hear exactly what I said, and for that I apologise on behalf of the Government. It was my fault.