Scottish Government and Welsh Government Funding

John Glen Excerpts

Thursday 30th March 2023 Written Statements

[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).

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:

Public Service Pensions: Superannuation Contributions Discount Rate

John Glen Excerpts

Thursday 30th March 2023 Written Statements

[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.

[HCWS697]

Economic Crime Levy Allocations Update

John Glen Excerpts

Monday 27th March 2023 Written Statements

[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

Tuesday 21st March 2023 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

2. Whether his Department has made an assessment of the economic impact of ultra low emission zones.

[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)]

3. What fiscal steps he is taking to support businesses with the cost of energy.

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[Martin Vickers (Cleethorpes) (Con)]

5. What assessment he has made of the economic outlook for (a) Greater Lincolnshire and (b) Cleethorpes constituency.

[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)]

7. If he will make an assessment with Cabinet colleagues of the potential impact of increasing the tax-free childcare allowance on the ability of parents to work.

[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)]

8. If he will make an assessment with Cabinet colleagues of the potential impact of the spring Budget on gender equality.

[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)]

10. Whether he is taking steps with Cabinet colleagues to support homeowners with increases in mortgage rates.

--- Later in debate ---

[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)]

13. What recent assessment his Department has made of the impact of withdrawal from the EU on the economy.

--- Later in debate ---

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

14. If he will take fiscal steps to increase funding for social and affordable housing.

[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)]

15. What fiscal steps he is taking to help reduce economic inactivity.

--- Later in debate ---

[Gareth Johnson (Dartford) (Con)]

T5. Delaying the lower Thames crossing will have a detrimental impact on Dartford’s economy and on its traffic problems, so does the Chancellor of the Exchequer agree that the completion of the lower Thames crossing is vital if we are to promote economic growth, not just in Dartford but throughout the south-east of the country?

[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.

[Mr Speaker]

I call the shadow Chancellor.

--- Later in debate ---

[Alexander Stafford (Rother Valley) (Con)]

T10. On behalf of all the residents of Rother Valley and especially Dinnington, I thank the Chancellor for the £12 million that we got in the Budget out of the new fund for capital regeneration projects to revitalise our high street, taking out the burnt-out building and rejuvenating the whole high street. Of course, there are other high streets across Rother Valley, such as in Maltby, Thurcroft and Swallownest, that also need help. Can the Chancellor therefore look favourably on future applications for those high streets so that they, too, can get the money that Dinnington has so necessarily got?

[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)]

T4.   At the same time as the Chancellor has been dishing out tax cuts for the pensions of the richest earners, the Tories are considering making millions of people work even longer than they had planned before they can get their state pension. Will the Chancellor today rule out changing the state pension timetable?

[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)]

T6. The head of the Institute for Fiscal Studies has said of the Chancellor:“Continuing to muddle through, massage the figures, and implement poorly designed policies will only make the problems worse.”That is a pretty damning verdict on his Budget, is it not?

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[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.

[Mr Speaker]

I think that clears it up. The answer was no.

Annual European Union Finances Statement

John Glen Excerpts

Friday 3rd March 2023 Written Statements

[The Chief Secretary to the Treasury (John Glen)]

I am today laying before Parliament, “The European Union Finances Statement 2022 on the implementation of the Withdrawal and Trade and Cooperation Agreements’” (CP 759). This is an annual publication and the 42nd in the series.

This year’s edition is the second in the publication series to cover the UK outside the EU. It continues to include an updated government estimate of the financial settlement on withdrawal from the EU, which can be found in annex A, contributing figures in Chapters 2 and 4, and annex C outlines the cumulative payments with their constituent parts, along with HM Treasury’s forecast.

This year’s edition follows the model of the previous edition, based on the European Scrutiny Committee’s recommendations on how to present the information. The cut-off date for reporting for this publication is 31 December 2022, as these statements will continue to be published every calendar year. The focus of this statement remains the implementation of the withdrawal agreement and the trade and co-operation agreement.

Similar to last year, the statement separates backward-looking reporting on the payment of net liabilities made by the UK from HM Treasury’s forecast of outstanding liabilities. Chapter 2 gives a breakdown of the April and September 2022 invoices received from the EU, and their payment during that calendar year, of £5,030,023,023.

Chapter 3 of the statement provides detail on the verification arrangements that HM Treasury has undertaken. HM Treasury works with the European Commission and its implementing partners to ensure their systems and controls over financial reporting are suitable for the specific requirements of the withdrawal agreement. Chapter 4 breaks down forecast outstanding UK net liabilities to the EU from January 2023, providing a point estimate of £13.2 billion (€14.9 billion) of the total outstanding net liability to the EU.

HM Treasury estimates that the current net value of the financial settlement is £37.9 billion. This estimate is within the original estimated range of £35 billion to £39 billion and shows a material reduction against last year’s estimate of £42.5 billion. This is primarily due to the decrease in the estimation of the UK’s share of liability for EU pensions. Taking into account the financial settlement with the EU, the Government have determined how £14.6 billion of spending by 2024-25 can be allocated to their domestic priorities, rather than be sent in contributions to the EU.

HM Treasury has presented a reconciliation to the methodology adopted in previous years to enable comparison on a consistent basis. This is provided in annex A, along with an explanation of some the principal assumptions underpinning forecast methodologies prepared for different purposes.

This statement reports on the status of EU programme association in Chapter 5.

[HCWS599]

Public Service Pension Scheme Indexation and Revaluation 2023

John Glen Excerpts

Monday 20th February 2023 Written Statements

[The Chief Secretary to the Treasury (John Glen)]

Public service pensions continue to be among the very best available.

Legislation governing public service pensions in payment requires them to be increased annually by the same percentage as additional pensions, state earnings related pension and state second pension. Public service pensions will therefore be increased from 10 April 2023 by 10.1%, in line with the annual increase in the consumer prices index up to September 2022, except for those public service pensions which have been in payment for less than a year, which will receive a pro-rata increase.

Separately, in the career average revalued earnings public service pension schemes introduced in 2014 and 2015, pensions in accrual are revalued annually in relation to either prices or earnings depending on the terms specified in their scheme regulations. The Public Service Pensions Act 2013 requires HMT to specify a measure of prices and of earnings to be used for revaluation by these schemes.

The prices measure is the consumer prices index up to September 2022. Public service schemes which rely on a measure of prices, therefore, will use the figure of 10.1% for the prices element of revaluation.

The earnings measure is the whole economy year on year change in average weekly earnings, non-seasonally adjusted and including bonuses and arrears, up to September 2022. Public service schemes which rely on a measure of earnings, therefore, will use the figure of 7% for the earnings element of revaluation.

As announced by the then Secretary of State for Health and Social Care as part of the Government plan for patients on 22 September 2022, the effective date of revaluation will be 6 April 2023 for the NHS Pension Scheme England & Wales, subject to a consultation by the Department for Health and Social Care. The NHS Pension Scheme (Scotland), the Local Government Pension Scheme England & Wales and the Local Government Pension Scheme (Scotland) will also use 6 April 2023 as the effective date, subject to consultation and other processes by the Scottish Government and the Department for Levelling Up, Housing and Communities. For all other schemes in scope of this order, the effective date of revaluation remains 1 April 2023.

Revaluation is one part of the amount of pension that members earn in a year and needs to be considered in conjunction with the amount of in-year accrual. Typically, schemes with lower revaluation will have faster accrual and therefore members will earn more pension per year. The following list shows how the main public service schemes will be affected by revaluation:

Customs Fraud and the European Union

John Glen Excerpts

Thursday 9th February 2023 Written Statements

[The Chief Secretary to the Treasury (John Glen)]

In March 2018, the European Commission took the first steps towards infracting the UK, alleging that between November 2011 and October 2017, the UK had failed to prevent undervaluation fraud involving importations of Chinese textiles and footwear. On 8 March 2022, the Court of Justice of the European Union (CJEU) published its judgment, finding against the UK on most liability points.

The UK has argued throughout the case that it took appropriate steps to counter the fraud in question. However, since these infringement proceedings were raised, the UK has taken proportionate and increased steps to combat this fraud without impacting legitimate trade, including by liquidating suspect traders through enforcement action. The UK takes a comprehensive and dynamic approach to tackling customs fraud risk and evolves its responses as any new potential threats emerge.

Whilst the UK has now left the European Union and this is a legacy matter from before our departure, the Government are keen to resolve this long-running case once and for all and are committed to fulfilling their international obligations.

Throughout this process, the Government have also been conscious of the risk of further protracted legal proceedings, which could open UK taxpayers to not only a larger principal bill, but also continued substantial interest accrual. Considering this, in June 2022 the UK took the proactive step of making a payment of €678,372,885.63, which the then Chief Secretary to the Treasury set out in a statement to the House on 30 June (HCWS167). This represented the minimum, indisputable amount the UK considered due at that time in light of the CJEU judgment and, vitally, stopped interest accruing on this portion of the bill.

Following further discussions with the European Commission, on 13 January 2023, the UK made a final principal payment to the EU of €700,351,738.31. This constitutes the entire remaining principal due and the figure paid reflects the 12.43% share back that the UK is entitled to from its time as a member state.

On 6 February 2023, the UK made a final payment to the EU of €1,227,884,519.53, representing the interest due on the principal amounts paid. These are substantial sums but represent the final payments and draw a line under this long running case, with the UK fulfilling its international obligations.

Now that the UK is no longer part of the EU customs union, we do not have to remit any duties to the European Union, a tax that in 2021-22 represented a £4.9 billion contribution to the Exchequer. Outside the EU, we can set our own law, including tax and trade policies, that work for the UK. Furthermore, taking into account the financial settlement with the EU, the Government have determined how an additional £14.6 billion of spending by 2024-25 can be allocated to its domestic priorities, rather than be sent in contributions to the EU. This additional spending was already included in the overall spending plans that the Government set out at previous spending reviews.

[HCWS561]

Oral Answers to Questions

John Glen Excerpts

Tuesday 7th February 2023 Commons Chamber

[Chloe Smith (Norwich North) (Con)]

15. If he will make an assessment of the potential contribution of payroll employees to supporting economic growth.

[The Chief Secretary to the Treasury (John Glen)]

Unemployment is at a record low of 3.7%, although we recognise that there are labour shortages due, in part, to a rise in working-age inactivity. Tackling that inactivity and supporting growth remains a priority for the Government, and the Secretary of State for Work and Pensions is working on a thorough review, which will conclude very shortly.

[Chloe Smith]

I am glad my right hon. Friends have taken up the urgent issue of economic inactivity. Does the Minister agree that support for disability and poor health must be improved to help people to start, to stay and to succeed at work? Will he ensure that spending on Access to Work keeps pace, and will he look at a disability employment endowment fund?

[John Glen]

Absolutely, I will look at that. The Government have already committed £1.3 billion of funding to help those with health conditions or disabilities to get into work and to thrive. This is a complex area with a number of interlocking factors, at which we are looking very carefully at this moment.

[Sarah Green (Chesham and Amersham) (LD)]

16. What steps he is taking to help ensure access to in-person banking services.

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

18. What recent discussions he has had with the Secretary of State for Levelling Up, Housing and Communities on the impact of inflation on projects to be delivered under the levelling-up fund.

[The Chief Secretary to the Treasury (John Glen)]

The Government recognise that inflation has created a challenging delivery landscape for capital infrastructure projects, including the levelling-up fund. That is why we have made £65 million in delivery support available to successful applicants to ensure that local residents see the benefits of the Government’s investment.

[Jonathan Edwards]

Thank you for getting me in, Mr Speaker. As the Minister said, there have been significant inflationary costs since many of these projects were announced. The feedback I am getting about many of the capital projects in the Swansea bay area is that the same can be said for the city deals. What discussions are taking place with delivery partners to ensure that sufficient central support is available for projects that are in the pipeline to be completed?

[John Glen]

There is a constant dialogue at a central and local level to evaluate projects and look at what can be done to maximise delivery in the anticipated timeframe. Obviously, inflation affects the whole economy and every Secretary of State who comes to see me raises the same issue. That is why the Government are so determined to halve inflation and set the conditions for growth.

[Mr Speaker]

I call the shadow Minister.

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

Following the recent levelling-up round 2 announcements, in which all five bids from Birmingham were refused, as were both bids from the great city of Wolverhampton, but, miraculously, the one from the Prime Minister’s constituency was approved, the Conservative Mayor of the West Midlands Combined Authority, Andy Street, said:

“Fundamentally this episode is just another example as to why Whitehall’s bidding and begging bowl culture is broken”.

What is the Chief Secretary’s response to the Conservative Mayor’s comments?

[John Glen]

My response is to explain that there is a rigorous process of scoring and evaluating all bids very carefully, as there has been over both rounds. In rounds 1 and 2, 45% was given to constituencies held by Opposition parties and 66% was targeted at category 1 constituencies. I recognise the disappointment some colleagues will feel and, therefore, there is another round. Details of that will be made available in due course.

[Mr McFadden]

Right now in the United States, job opportunities and investments throughout the country are being driven by the Inflation Reduction Act. The European Union is responding with an incentive package of its own. But the new Energy Secretary describes both those policies as “dangerous”. Does the Chief Secretary agree that the Inflation Reduction Act is dangerous? Or does he think that the UK needs a response that makes sure that we do not lose out on the green transition and that we, too, need a Government who want to see investment and jobs from the green transition in every part of the UK?

[John Glen]

The Government are totally committed to meeting our net zero obligations. In the comings weeks, as we prepare for the Budget, the Chancellor will be considering these matters in the decisions he brings to the House. Every economy will have a different set of pressures, but we will do everything we can to address the need to find the conditions for growth, deal with inflation and ensure that we set the economy fair for the future.

[Kate Hollern (Blackburn) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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[Kevin Foster (Torbay) (Con)]

T7. I only have to look at the Bench behind my right hon. Friend to know that the needs of Torbay will be at the centre of the Treasury’s thinking. What fiscal steps will he take in response to the “Communities on the Edge” report produced by the Coastal Communities Alliance?

[The Chief Secretary to the Treasury (John Glen)]

I take that report and my hon. Friend’s advocacy for the needs of coastal communities seriously, and I look forward to meeting him shortly. Alongside the rural England prosperity fund, the £2.6 billion UK shared prosperity fund gives local leaders in coastal areas the freedom to target local issues, but I look forward to further conversations with him.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T5.   Last year’s register of overseas entities was meant to crack down on corrupt elites using the UK to launder illegal wealth, but today’s BBC and Transparency International report shows that it is clearly not working, with less than half the required firms making declarations and others fudging it. That brings into question the Government’s commitment to tackling illegal wealth and wealth inequalities. What will the Government do about this?

--- Later in debate ---

[James Wild (North West Norfolk) (Con)]

Given the serious condition of the Queen Elizabeth Hospital in King’s Lynn, does the Chancellor agree that it would be better value for money to build a new hospital rather than to patch this one up? Will the Treasury back the plan by the Department of Health and Social Care to do just that and include it in the new hospitals programme?

[John Glen]

As we discussed when we met two weeks ago, it is a top priority for us to resolve the profile of spending for hospitals like that one, in which reinforced autoclaved aerated concrete was used and which need that urgent work. We are working on it quickly, but I do not want to steal the thunder of the Secretary of State for Health and Social Care, who will ultimately make those decisions.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The Public Accounts Committee has expressed concerns about the difficulties taxpayers face in getting timely responses and action from His Majesty’s Revenue and Customs. My constituent Kirsty Lloyd and her former employer Llion James have missed out on thousands of pounds-worth of statutory maternity pay support, which they feel is because of delays and poor communication with HMRC. Their case has now timed out. Would the Treasury consider extending the time during which a claim can remain active in cases where there is a dispute with HMRC?

[Robin Millar (Aberconwy) (Con)]

My hon. Friend the Member for Ynys Môn (Virginia Crosbie) has run a tenacious campaign for a freeport. Can my right hon. Friend confirm that the benefits of such a freeport would be felt across north Wales and comment on the benefits that students in my own constituency might feel when considering a future career in north Wales?

[John Glen]

My hon. Friend is absolutely right that freeports offer tax relief, simplified customs processes and business rates retention. The evaluation process for the three bids that came in at the end of November is well under way and I hope that conclusions will be made in the very near future.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

As the hon. Member for South West Bedfordshire (Andrew Selous) said, some businesses have bought in energy at a very high rate because of when they sealed their contract. Many of my local pubs and hospitality businesses will go bust in the beginning of the next financial year because their bills are so out of kilter; they say they would have to charge £15 a pint to survive. Even in London—even in Shoreditch—that is just not feasible. What extra support is the Treasury even considering as we approach the financial statement next month?

--- Later in debate ---

[Richard Burgon (Leeds East) (Lab)]

It would cost around £1 billion to give nurses an inflation-matching pay rise. Scrapping the non-dom tax avoidance scheme used by the super-rich would raise more than £3 billion. Why, then, is the Chancellor putting non-doms before nurses?

[John Glen]

The Chancellor is not doing that. There is a clear process in place, and we continue constructive dialogue with all professions in dispute with the Government and with their employers. This is obviously a challenging circumstance and we recognise how difficult it is.

[Kit Malthouse (North West Hampshire) (Con)]

When the Chancellor acceded to the Treasury throne, he appointed a panel of four advisers drawn from the City. Has the panel met, has he added anybody from small business or industry, and where can we find the minutes, please?

Charter for Budget Responsibility

John Glen Excerpts

Monday 6th February 2023 Commons Chamber

[The Chief Secretary to the Treasury (John Glen)]

I beg to move,

That the Charter for Budget Responsibility: Autumn 2022 update, which was laid before this House on 26 January, be approved.

Before I start my remarks, I pay tribute to my predecessor, Mr Robert Key, the former Member for Salisbury, who sadly died on Friday. Robert was a Member of Parliament for 27 years, a distinguished parliamentarian and former Minister, and a dedicated Anglican. I put on record my affection for him; my thoughts and prayers are with his wife Sue and the rest of his family.

The charter for budget responsibility is, at its heart, about how we chart a course for growth. It is a blueprint for managing the public purse responsibly. It is a path to cement stability in our economy and invest in public services. It is, in the current economic climate, about acknowledging that public finances remain vulnerable and knowing the risks that arise from debt being close to historic highs. This Government take these risks extremely seriously and believe that stable public finances are a key ingredient in the success of our economy, both today and in the future, in the south and the north, for the elderly and our youngest. This charter sets out this Government’s approach to managing the nation’s money so that everyone can see we are being prudent with the nation’s finances.

We debate this charter today in the face of difficult economic times. Like many countries, the UK faces the twin challenges of a recession and high inflation, as global energy prices have been exacerbated by Putin’s war in Ukraine. We have turned the corner in the fight against inflation that has plagued nations across Europe. Inflation has now started to fall, with inflation in the UK lower than many EU countries. A warmer winter has helped keep a lid on energy prices that jolted upwards following Putin’s illegal war in Ukraine. There is, however, a challenging road ahead. The International Monetary Fund says that 90% of advanced economies are predicted to see a decline in growth this year, and that is why we are taking action to support the economy through these extremely challenging times.

[John Redwood (Wokingham) (Con)]

Does the Minister not think there is some difficulty in trying to steer the economy on the basis of a five-year forward debt forecast when the official forecasters have been more than £100 billion out in two of the last three years, and £75 billion out this year with a one-year forecast?

[John Glen]

I will address the provisions of the charter and my right hon. Friend’s point directly in a few moments. As the Chancellor set out last week, we have a credible plan to generate economic growth by getting people back into employment, reinvigorating a culture of enterprise and continuing to drive up standards in education, and ensuring that that happens everywhere. The Chancellor’s plans to generate growth need to be underpinned by sustainable public finances, but the global economic shocks we have faced mean that borrowing remains high. We are expected to borrow £177 billion this year—double pre-pandemic levels. That is contributing to ever larger public debt.

Along with high debt in a time of rising inflation and interest rates comes the £120.4 billion we are projected to spend this year on debt interest alone. Let me remind the House why that is. For almost two years, in the face of a historic pandemic, we took unprecedented, bold, decisive action to support people, jobs and the economy. We rolled out vaccines at a world-leading pace, we paid 80% of people’s wages, and we gave grants to businesses to help cover their bills. The costs of inaction in the face of covid-19 do not bear thinking about. I am proud to represent a Government who took the big decisions to keep the public and the economy healthy.

As inflation rose to figures we have not seen in more than 40 years, led primarily by increasing energy prices, we again took action to safeguard the nation by contributing to people’s bills. Nobody in this Government would argue that that is not money well spent, but we are also cognisant of the facts. At nearly 100% of GDP, public debt is at its highest level since the early 1960s. It would not be sustainable to continue to borrow at current levels indefinitely. If debt interest spending were a Department, its departmental budget would be second only to the Department of Health and Social Care. Not only does that direct our resources away from vital public services, but for those of us who have paid attention to the economy, it is clearly unsustainable in the long run. It is unsustainable because increasing debt leaves us more vulnerable to changing interest rates and inflation. For every percentage point increase in interest rates, the annual spending on debt will increase by £18.2 billion. That is money we could be using to invest in schools or hospitals and in the transition to net zero.

Aside from investing in the services that we need and that so many rely upon, there is another important moral point to debt. Letting our debt increase is simply racking up debt on the nation’s credit card and handing the bill to our children and grandchildren. We are not alone in our ambition to reduce debt as a share of GDP over the medium term—Germany, Canada and Australia have made similar commitments. It is not just numbers on a spreadsheet; it will have a material impact on the lives and living standards of those who have not yet been born.

Instead, we choose a responsible, fair approach. We are demonstrating fiscal discipline, which will support the Bank of England in bringing inflation down. That is carefully balanced against the need to support the most vulnerable and to protect vital public services. At the autumn statement we announced a series of difficult decisions worth around £55 billion to get debt down, while ensuring that the greatest burden falls on those with the broadest shoulders.

All Members will hope that, having faced the pandemic, war in Europe and a bout of rising prices, we will have seen the worst of this economic storm. The truth, however, is that we do not know exactly what lies ahead, and we need to create the room to respond comprehensively in the future, should another shock occur. Last year my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) came to this place to approve rules to guide us on a path to strengthen the public finances after the worst of the pandemic had passed. By the third year of the forecast, in 2025-26, those rules require underlying debt—that is, public sector net debt excluding the impact of the Bank of England—as a percentage of GDP to be falling and everyday spending to be paid for through taxation by the same year.

Since then the context has changed yet again. To continue protecting the most vulnerable and investing in public services, the Chancellor updated the fiscal rules at the autumn statement, and we are updating the charter for budget responsibility. It will give everyone the confidence and certainty that we are going to repair our public finances. It will provide the foundation for long-term growth. In following them, we will be able to get debt down while protecting the public services upon which we all rely. The rules require that we reduce the deficit so that debt falls as a share of the economy in five years’ time. Expenditure on welfare will continue to be contained within a predetermined cap and margin set by the Treasury unchanged from the level set in 2021. I am pleased to say that the Office for Budget Responsibility confirmed in November that we are on track to meet all our rules, with debt falling and the deficit below 3% GDP in the target year of 2027-28.

Aside from the fiscal rules, the charter remains unchanged. We continue to be at the forefront of financial management through our monitoring and management of the broader public sector balance sheet. The independent Office for Budget Responsibility provides transparency and credibility via its economic and fiscal forecasts. Many colleagues have remarked on the important principle that our fiscal plans are transparent, fully costed and accompanied by an independent assessment of the economic and fiscal implications. The Government agree with this principle. There may of course be extraordinary circumstances where that cannot be the case, as we saw during the pandemic, and it was right not to delay announcing critical help for households and businesses, but in normal times major fiscal announcements should be made with one of the OBR’s two forecasts. As is usual, the spring Budget on 15 March will be accompanied by a full OBR forecast.

This updated charter puts stability first. It sets a credible plan to deliver on the Prime Minister’s key promises to get debt falling and to halve inflation, and it fosters the conditions for growth. It continues our historic support for households, as it allows us to increase the national living and minimum wage and pensions. It maintains gross investment at record levels in innovation, infrastructure and education. We have protected the most vulnerable and vital public services, and we are protecting the economy. After making the difficult decisions at the autumn statement, today we have a choice: we can sit idly by and let our economy slip into disrepair, or we can secure the foundations of our future by protecting the foundations of our economy. For those reasons, I commend this motion to the House.

--- Later in debate ---

[John Glen]

It is a privilege to close this debate on behalf of the Government. I thank those who contributed to the debate, including the distinguished Chair of the Select Committee, who highlighted some of the issues and presumptions of Government policy. I cannot comment on what will happen with fuel duty, as that will be the Chancellor’s decision. I thank the right hon. Member for Dundee East (Stewart Hosie) for his contribution, in which he seemed to suggest more targets and a poverty of ambition on behalf of the Government, and I can assure him that that is not the case.

I would like to respond to my right hon. Friend the Member for North West Hampshire (Kit Malthouse), who made a number of observations about the independence of the OBR; its certification and validation role; and the iterative process and whether that compromised the apparent independence of the Treasury. He described economics as not just an art or a science but even psychology. I can confirm that the OBR’s remit is unchanged: it is the Government’s official forecaster. But—as he notes and I am pleased to confirm—the Treasury maintains considerable analytical capability to support the policy advice to Ministers, and it does a very good job of it too. There is a clear separation between the OBR and policymaking, but it is a matter of securing credibility for those policies, and I think he would agree with me that that is a very important point.

[Kit Malthouse]

I guess the issue is: whose forecasts are they? If the OBR produces forecasts and Treasury officials say, “Well, Chancellor, we have looked over the forecasts and we think they are right,” that is qualitatively different, in the public’s mind, to the Treasury producing a forecast and the OBR saying to the public, “Well, we have looked over them and we think they are right.” While it does say that the Treasury reserves the right to disagree with the OBR, the nature of the iterative process presumably means that will never happen, because they agree before anything is published.

[John Glen]

What we can agree is that the budget responsibility committee has discretion over all judgments underpinning its forecasts. Of course, there is obviously a range of views—my right hon. Friend the Member for Wokingham (John Redwood) is always clear in his disagreements with what the OBR may or may not forecast—but what we are saying is that there is validity in and a need for an official forecast, and that is what we have.

With respect to the shadow Chief Secretary, the right hon. Member for Wolverhampton South East (Mr McFadden), before he gets a little too complacent he should be wary of the £90 billion of uncosted net spending commitments that his party has made since the turn of the year. I think the OBR would be very interested in what we would find there.

The charter represents our bedrock to prosperity. It will get debt falling but invest in the future. It will rebuild our fiscal buffers, bolster our economic fundamentals and deliver for the whole country. A vote for this charter is a vote for sustainable public finances, and that is why I commend the motion to the House.

Question put and agreed to.

Resolved,

That the Charter for Budget Responsibility: Autumn 2022 update, which was laid before this House on 26 January, be approved.

Business of the House (8 fEBRUARY)

Ordered,

That at the sitting on Wednesday 8 February, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on

(1) the Motion in the name of Secretary Suella Braverman relating to Police Grant Report not later than three hours after the commencement of proceedings on that Motion, and

(2) the Motions in the name of Secretary Michael Gove relating to Local Government Finance not later than three hours after the commencement of proceedings on the first such Motion or six hours after the commencement of proceedings relating to Police Grant Report, whichever is the later; proceedings on those Motions may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Penny Mordaunt.)

Oral Answers to Questions

John Glen Excerpts

Tuesday 20th December 2022 Commons Chamber

[John Penrose (Weston-super-Mare) (Con)]

3. What recent assessment he has made of the effectiveness of the Financial Conduct Authority in protecting customers from loyalty penalties in the insurance market.

[The Chief Secretary to the Treasury (John Glen)]

The Government welcome the Financial Conduct Authority’s pricing rules, introduced in January this year, which require insurers to offer a renewal price no greater than the price the firm would offer to a new customer for the same policy. The Financial Conduct Authority has confirmed there is no evidence of widespread non-compliance with those rules.

[John Penrose]

The FCA’s cheap and, we hope, effective measures to stop insurance company customers being ripped off is in stark contrast to the energy price cap, which was introduced for exactly the same reason, but has not held down the price of energy and has larded hundreds of pounds of extra hedging costs on to every household’s energy bills to boot. Since the Treasury is spending vast amounts of taxpayers’ cash on energy subsidies at the moment, will my right hon. Friend speak to the Secretary of State for Business, Energy and Industrial Strategy about replacing the failed energy cap with a version of the FCA’s much cheaper and more effective approach as soon as energy prices return to normal?

[John Glen]

I am very happy to look at that question further. The Government previously considered, but rejected, asking Ofgem to implement a relative rather than an absolute price cap in energy markets, which would have similarly prevented energy suppliers from charging those large differentials, because it was judged that it was more likely to distort competition in the fixed-term tariff market. As ever, I am happy to continue the conversation with my hon. Friend and I know he will take the matter up further with the regulator.

[Mr Speaker]

We now come to the SNP spokesperson.

[Stewart Hosie (Dundee East) (SNP)]

Subsequent to the changes to the insurance market to protect people from the loyalty payment, the Chancellor announced his Edinburgh reforms to wider financial services regulation and a great many consultations. At a quick glance, many of them closed very quickly—on 5 February, 17 February, 3 March, 5 March and 17 March. Given that the Treasury Select Committee warned over a decade ago that the Government

“needs to take the time required to get its reform of financial regulation right”,

how can we be convinced that the rather painful lessons of the financial crash have not been forgotten?

[John Glen]

For four and a half years, I was the Economic Secretary to the Treasury, and many of those reforms were baked up over a lot of consultation with industry over many months. The Edinburgh reforms represent an incremental advance on those reforms and have high prudential regulatory standards very much at their core.

[Stewart Hosie]

I will come to that, because the Minister is absolutely right. I did quote from a 2010 report. But in June this year, the Treasury Committee, in its report on the future of financial services regulation, warned:

“Weakening standards could reduce the financial resilience of the UK’s financial system and undermine international confidence in that system and the firms within it.”

Given the intention to review capital requirements, and the new remit letters and secondary objectives for the Prudential Regulation Authority and the FCA, how will the Chancellor and the Minister ensure the regulatory focus on stability is maintained?

[John Glen]

I gave evidence to that inquiry and I heartily agree with its conclusions. Stability is at the core of the regulators’ objectives, but so is the need to look at the competitive landscape across the globe and ensure that the UK, with the city of London as a global hub for financial services, evolves and remains competitive, taking account of the risks but also developing frameworks in line with expectations, so that we can remain that world-leading global hub.

[Peter Grant (Glenrothes) (SNP)]

5. What recent assessment he has made of the potential impact of his policies on levels of poverty in Scotland.

--- Later in debate ---

[Mark Eastwood (Dewsbury) (Con)]

6. What fiscal steps his Department is taking to level up communities.

[The Chief Secretary to the Treasury (John Glen)]

The Treasury is making significant investments to level up communities across the UK—101 towns, including Dewsbury, will benefit from more than £3.2 billion from the towns fund, supporting long-term economic and social regeneration. Of course, communities will also benefit from the £4.8 billion levelling-up fund, the £2.6 billion shared prosperity fund and the £250 million community ownership fund.

[Mark Eastwood]

The decision on the £47 million Penistone line levelling-up fund bid is due to be announced shortly. Can my right hon. Friend assure me that this important round 2 category 1 bid will be subject to the same financial considerations and eligibility as bids submitted in round 1?

[John Glen]

I can absolutely reassure my hon. Friend that all round 2 bids are undergoing a robust and thorough assessment through that decision-making process. That is consistent with the approach taken in round 1. Of course, the individual decisions will be made in due course in the very near future.

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

One way the Government could level up low-income families with young children is through healthy start vouchers. This year, I have tabled four written questions asking what the take-up rate of that scheme has been since digitisation in April, but the Government have been unable to give me an answer, despite the fact that we are eight months on and in the middle of a cost of living crisis. How do the Government know what the take-up rate of the scheme is and whether it is working in balancing out inequalities?

[John Glen]

I obviously cannot answer that specifically, but I can say that the Government have, over recent weeks, shown the commitment to helping the most vulnerable across the United Kingdom. But I take the hon. Lady’s question seriously, and I am very happy to look into that and to work with colleagues across Government to find an answer.

[Kevin Foster (Torbay) (Con)]

As the Minister will know, fiscal steps in investment zones can help to boost and level up communities—I am thinking in particular of Paignton in South Devon, where South Devon College and the photonics industry exist side by side. Will he meet me to discuss how that initiative could help to support growth in Paignton?

[John Glen]

I am very happy to meet my hon. Friend, who is, as ever, fighting strongly for his constituents. As he knows, the investment zones are designed to be a meaningful mechanism to catalyse growth, sometimes, although not exclusively, through university, looking at where we can find clusters across the United Kingdom to drive the economy forward.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Clearly, we need to level up on housing. In my constituency, many people just cannot afford a private rented home or to own their own home, and we need more social housing, but that is not possible without Government subsidy. What is the Treasury considering to make sure that people who desperately need a permanent roof over their head can get it?

[John Glen]

We are working very closely with the Department for Levelling Up, Housing and Communities to look at specific interventions. We have just released an extra amount of capital money to work alongside the Ukraine support scheme. But I totally recognise that this is a critical issue, and we will make further announcements about it in due course at the next fiscal event.

[Jason McCartney (Colne Valley) (Con)]

I fully support my hon. Friend the Member for Dewsbury (Mark Eastwood) in his levelling-up bid for the Penistone line, as it goes through my constituency, with stations in Brockholes and Honley. I also have my own levelling-up bid to regenerate a disused mill in Marsden for commercial space. These bids are good not only for connectivity and regeneration, but for the economy, because they create jobs and growth. Does the Minister agree that this allocation of funding therefore makes sense?

[John Glen]

I absolutely agree with my hon. Friend—perhaps unsurprisingly. The Government have developed a bespoke and objective index of priority places. We are very keen for this investment to work effectively, wherever it is. I very much respect the representations he has made this morning for the bid in his own constituency.

[David Linden (Glasgow East) (SNP)]

An important part of levelling-up communities is to invest in the community transport network. Last week, I visited Shettleston-based Community Transport Glasgow alongside Councillor Laura Doherty. They were telling me that they were having real difficulty attracting volunteers because of HMRC rules around mileage rates. Is that something that the Government are willing to look at? Will the Minister be willing to meet me and Community Transport Glasgow to discuss that issue?

[John Glen]

We keep these matters under review, but I am sure my colleague the Financial Secretary, who takes a close interest in these matters, will follow up in the appropriate way.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

7. What steps his Department is taking to help ensure value for money in public spending.

[The Chief Secretary to the Treasury (John Glen)]

Value for money is a central priority for the Government and at the heart of every decision we take. The Government take our responsibility for managing the public purse seriously. The Government recently launched the efficiency and savings review, and that will help to keep spending focused on the Government’s priorities and manage pressures from higher inflation. It will include renewing our efforts to drive efficiency, tackle waste and re-prioritise spending away from lower value and lower priority programmes.

[Mrs Hodgson]

I hear what the Minister has just said, but he will be as aware as I am that, in the 2020-21 annual report from the Department of Health and Social Care, the Government wrote off a total of £8.7 billion-worth of the personal protective equipment they had acquired in the first year of the pandemic. When families are facing a choice between heating and eating this Christmas, does the Minister understand the real public anger that people are facing these difficulties at this time, when the Government are having such rampant waste of public money?

[John Glen]

I acknowledge that figure in that report, but it refers to the write-down that was necessary following a situation where we acquired a lot of PPE at a time of acute demand and shortage of supply. It was an adjustment for that. Of course, 97% of all PPE was suitable for use in healthcare and non-healthcare settings. While I take the general point that the hon. Lady is making about concern for the most vulnerable in communities, which has been addressed by the £37 billion of support we have put in this year, those are the facts around the figure that she raises.

[Mary Glindon]

Figures suggest that at least £3 billion has been spent on agency staff in the civil service over the past three years, plugging the gaps in our public sector at a huge premium to employment agencies. With Public and Commercial Services Union members in the civil service now out on strike for fair pay and terms and conditions, and thousands of contingency staff already drafted in to break the strikes, can the Minister say how much this dispute is costing the taxpayer? Does he agree that it is a false economy not to give these dedicated public servants a decent cost of living pay rise?

[John Glen]

Strikes are obviously very regrettable, and we as Ministers work closely with civil servants day in, day out, and we very much value the contribution they make to government. I will be looking carefully with Secretaries of State in the coming weeks at efficiencies across government and how we can get the economy, the country and public finances in the best possible place as we move forward through the pay review round next year.

[Sir Christopher Chope (Christchurch) (Con)]

Are the Government not just paying lip service to the need to get improved productivity in public services? For example, the NHS produced an internal report in April on its efficiency, or lack of productivity. I requested that that report be made available in the Library more than one month ago, and I have not even had a reply to the question. Why are the Government not more open with Members about the need for productivity improvements?

[John Glen]

I can be very open with my hon. Friend today. We are absolutely committed to driving forward productivity across the economy and in the public sector. I will look into the specific question he has not had answered. That will involve conversations with the Secretary of State for Health and Social Care, as well as across the Cabinet.

[Mr Speaker]

I just remind everybody that Members’ letters must be answered when they put requests in, please. We now come to the shadow Minister.

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

I echo the good wishes to you, Mr Speaker, to the Minister and to the whole House for a very happy Christmas.

Last year, the then Prime Minister and the then Chancellor, who is now the Prime Minister, announced a star chamber to crack down on waste and fraud in public expenditure. How often has the star chamber met, and how much of the £6.7 billion estimated to have been lost to covid fraud and error has been recovered?

[John Glen]

As the right hon. Gentleman knows, we have instituted a range of interventions, investing in His Majesty’s Revenue and Customs fraud prevention measures to embed those in business as usual. I have been in post for the past eight weeks, and I will be having a series of meetings in January.

[Mr McFadden]

The Minister could not tell us whether the star chamber has met at all.

On top of all the examples that have been cited today, the rescue of the energy company Bulb is estimated by the Office for Budget Responsibility to be costing another £6.5 billion, partly as a result of our hedge fund Prime Minister’s failure to hedge against rising energy prices. Why do the Government not show more respect for public money and chase down every penny of these losses before putting up taxes for 30 million people at a time when the public already face the biggest cost of living crisis for generations?

[John Glen]

I agree with the right hon. Gentleman about the imperative of chasing down all waste. The Government are providing continued funding for the Bulb Energy special administration regime while the sale of Bulb’s customers to Octopus is pursued by the energy administrator as an exit route from the SAR, but I will look at what the right hon. Gentleman said and reflect carefully on what we can do further.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

8. Whether he has had recent discussions with the Secretary of State for Education on the potential merits of increasing student maintenance loans in line with actual rather than forecast levels of inflation.

[The Chief Secretary to the Treasury (John Glen)]

Treasury Ministers meet regularly with Ministers at the Department for Education to discuss matters of shared interest, including student finance. The Government are considering options for changes to loans and grants for 2023-24, and an announcement will follow in due course.

[Steve McCabe]

The Institute for Fiscal Studies reports that the real value of maintenance loans is the lowest for seven years. Rents, which account for 45% of bills, are rising; food costs are rising; one in 10 students are using a food bank; and 80% say they cannot make ends meet. Why does the Minister not make his Christmas present a proper increase in the level of maintenance loans? Because it is a loan, he would not even have to pay for it.

[John Glen]

I thank the hon. Gentleman for his question. I have a lot of respect for him and I recognise the issue that he refers to. Of course, many higher education providers have hardship funds that students can apply to, and there is £261 million—a quarter of a billion pounds—of student premium funding available this year to support disadvantaged students. On the specific issue of the uprating, of course there needs to be a delay to operationalise those additional sums. That is at the core of the issue. However, as I said, the Department for Education will report on the matter in due course.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

9. What recent steps he has taken to ensure fairness in the application of the tax system.

--- Later in debate ---

[Tom Hunt (Ipswich) (Con)]

15. What steps he is taking to increase funding for the education sector.

[The Chief Secretary to the Treasury (John Glen)]

At spending review 2021, the Department for Education was allocated a total of £87 billion, providing a cash increase to our education system of about £18 billion by 2024-25. Young people and adults benefited from the biggest long-term settlement for post-16 education in England since 2015. Of course, at the recent autumn statement, an additional cash increase of £2 billion was provided for both 2023-24 and 2024-25.

[Tom Hunt]

There have been significant improvements in special educational needs and disabilities provision in Ipswich in the last few years. Just last week, the Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Claire Coutinho), was at the Sir Bobby Robson School, which has 66 new places. Suffolk has had 1,000 new SEND places since 2019, and all of that is because of the investment that my right hon. Friend just mentioned. However, it is ever so slightly frustrating that Suffolk is still unfairly funded compared with other areas, including not just London but Norfolk, where a SEND pupil will get £99 more per head than those in Suffolk. I want young people with SEND in Norfolk to have every chance, but there is no reason why young and vulnerable people in Suffolk and Ipswich should get any less funding and investment. Will he commit to reviewing the bizarre quirk that means that Suffolk SEND kids get less than kids elsewhere?

[John Glen]

My hon. Friend is somewhat of an expert in the subject. I agree that it is critical that we get it right. Decisions on the distribution of high-needs funding are a matter for the Department for Education, but I reassure him that, as a result of the additional funding announced at the autumn statement, Suffolk’s high-needs funding is increasing by 11% per pupil in 2023-24 compared with this year. The Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Claire Coutinho), who has responsibility for children, families and wellbeing, will be happy to meet my hon. Friend to describe and discuss the different mechanisms of allocation and, indeed, how the high-needs formula works across different local authorities.

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

A merry Christmas to everybody when it comes. What steps is the Minister taking to review further education funding for people with disabilities? It is very important that people have equal opportunities across the United Kingdom and that our education system has inclusion at its core.

[John Glen]

I completely agree with the hon. Lady, and I am working with colleagues in different Departments looking at the challenges to help people back into the workplace. It is particularly difficult when people need support for such a range of needs and conditions. We must treat everyone as an individual and be ever more creative in the solutions that we bring forward. I look forward to working with her and colleagues in Government to try to assist in improving the situation.

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

T1. If he will make a statement on his departmental responsibilities.

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[Mary Glindon (North Tyneside) (Lab)]

T2.   Further to my previous question on best value in the public sector, can the Minister confirm how much money the civil service strike is costing the taxpayer and whether any cost-benefit analysis has been carried out on the merits of giving civil servants a decent pay rise?

[The Chief Secretary to the Treasury (John Glen)]

The cost of strikes is always regrettable. It is regrettable to those who rely on the services that those individuals deliver.

[Dame Maria Miller (Basingstoke) (Con)]

T6. Hampshire Hospitals NHS Foundation Trust is waiting for Treasury allocations to be made that would allow the start of a public consultation on our new hospital in Basingstoke, funded by the Government’s flagship hospital infrastructure plan. Can my right hon. Friend confirm when Basingstoke might be getting news on those allocations—perhaps even an early Christmas present?

[John Glen]

I am sorry that I cannot give an early Christmas present. Allocations from that funding are the responsibility of the Secretary of State for Health and Social Care. I encourage my right hon. Friend to speak to the Health Secretary, who is working hard with the Treasury and other parts of Government to look at capital projects across the whole of health. Announcements will be made in due course, early in the new year, I hope.

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

T5. Changes to the eligibility criteria for the warm home discount mean that those in receipt of disability living allowance, personal independence payment and attendance allowance can no longer claim it. I am sure the Minister will tell me that disabled people are being compensated via the two disability cost of living payments, but new research by YouGov has found that millions of disabled people are spending this winter living in cold and damp homes. What is he doing to ensure that no disabled person has to choose between eating and heating?

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[Richard Fuller (North East Bedfordshire) (Con)]

The Chancellor was absolutely right in Edinburgh to include environmental, social and governance ratings agencies within the regulatory perimeter. But will he ensure that in the guidance, ESG objectives are consistent with the long-term actuarial goals of pension funds, to ensure that money is available in 20 or 30 years’ time, when people wish to retire?

[John Glen]

My hon. Friend is an expert in this area. He is absolutely right to point to that concern. We must ensure joined-up regulatory innovation to make sure there are no unforeseen circumstances. He puts his finger on a very important point.

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

I refer to my entry in the Register of Members’ Financial Interests. The Chancellor knows that a workforce plan cannot work if the Government cannot retain staff in the NHS. We cannot retain staff in the NHS if we do not pay them—that is why they are out on strike today. Will the Chancellor, instead of hiding behind the pay review body, admit that the Government set the remit for the pay review body? The only way to end this dispute is for Government to sit down with the trade unions and negotiate.

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[Alicia Kearns (Rutland and Melton) (Con)]

Merry Christmas, Mr Speaker.

Rural poverty is devastating, but it is often hidden by the relative affluence of surrounding rural areas. To ensure that councils have the funding that they need to support those who are living in rural poverty, will the Chancellor and his officials meet me to discuss putting social mobility into funding formulas alongside deprivation, to get councils what they need and to end rural poverty?

[John Glen]

I would be very happy to meet my hon. Friend. Representing a rural constituency myself, I totally understand the tension in fully reflecting the needs of a sometimes diverse set of communities. I am happy to meet her to discuss the matter further.

[Dame Margaret Hodge (Barking) (Lab)]

A happy Christmas to everybody.

The latest estimate that I have seen is that the Government’s failure to clamp down on tax havens in our overseas territories and Crown dependencies has cost us £65 billion—almost half what we spend on the NHS, or a third of our education budget. Does the Chancellor agree that our public finances would be in a far better shape, our taxes would be far lower and our tax system would be far fairer if we had cracked down on our tax havens?

[John Glen]

We always need to be vigilant about tax evasion and work closely with the overseas territories and Crown dependencies on those matters. A lot of progress on registers has been made in recent years, and more is due to be made. I will continue to reflect carefully and work with the Economic Secretary on further improvements to get things to where they need to be.

[Sir Robert Buckland (South Swindon) (Con)]

Does the Chancellor agree that investor confidence in the United Kingdom will be increased only if we bring forward the overdue reforms to the law of corporate criminal liability? If so, will he and the Treasury support further amendments to the Economic Crime and Corporate Transparency Bill, including those that would implement the Law Commission’s recommendations to create further “failure to prevent” offences?

[Mike Amesbury (Weaver Vale) (Lab)]

Will Treasury Ministers work with Transport Ministers to give Avanti West Coast’s customers an early Christmas present by removing the contract from it, putting it into public ownership and saving the taxpayer an absolute fortune?

[John Glen]

I recognise the significant concerns about the delivery of that service. I am in ongoing conversations with the Secretary of State for Transport to look at what more can be done.

[Nick Fletcher (Don Valley) (Con)]

The people of Doncaster will be eternally grateful for the help that they received through the pandemic and for what they are receiving through the cost of living crisis, but Doncaster still needs a new hospital. Although money is tight, will the Chancellor meet me with the Secretary of State for Health and Social Care to see how we can achieve that goal in the new year?

[John Glen]

I am more than happy to meet my hon. Friend again to discuss the matter in detail. As I mentioned in my reply to my right hon. Friend the Member for Basingstoke (Dame Maria Miller), the situation with the capital programmes is under urgent review across the country. I hope that further announcements will be made in the new year, but I will certainly meet my hon. Friend anyway.

[Munira Wilson (Twickenham) (LD)]

A few months ago, the Chancellor promised at the Dispatch Box that he would make a further announcement about the energy bill relief scheme before Christmas. Nothing has yet been forthcoming. Small businesses, charities and schools in my constituency either face going under or face huge deficits in the coming year. Will he confirm when he will make a further announcement about support for businesses, the public sector and charities, and whether this House will have the opportunity to scrutinise it?

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[Alison Thewliss (Glasgow Central) (SNP)]

Asylum seekers, who are at the very sharpest end of the cost of living crisis, have seen only a 13p increase in asylum support payments. Will the Chancellor uprate that? It should not fall to brilliant charities like Refuweegee to ensure that asylum seekers get a Christmas this year.

[John Glen]

I think that communities up and down the country are doing amazing work to support, in particular, the Ukrainian visitors who came here this year at very short notice. We have just agreed a new package of support with the Department for Levelling Up, Housing and Communities, which gives guarantees going forward into next year.