Oral Answers to Questions
Laura Trott Excerpts(1 month, 3 weeks ago)
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Laura Trott (Sevenoaks) (Con)
During the election campaign, I held a press conference at which I outlined the glaring funding gaps in Labour’s plans and the taxes they might raise to pay for them. One of those taxes was employer national insurance contributions. The right hon. Member for Bristol North West (Darren Jones)—now Chief Secretary to the Treasury—responded at the time by arguing that this was a list of things that “Labour isn’t doing.” Is it correct that raising employer national insurance contributions is something Labour isn’t doing?
James Murray
The right hon. Member will have to wait for the Budget tomorrow. She was a Minister not that long ago, so she might still remember that the Budget is the time when such announcements are made. Let me restate our commitment, so it is crystal clear, that we will protect working people by not increasing national insurance, income tax or VAT. Might I add, very briefly, that I note the Conservatives suddenly have a new-found interest in the livelihoods of working people? It is a shame, frankly, that they never prioritised that during their 14 years in office, during which, time and again, they made working people pay for their mistakes.
Oral Answers to Questions
Laura Trott Excerpts(3 months, 2 weeks ago)
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Laura Trott (Sevenoaks) (Con)
Ten years ago, the now Chancellor argued in this House that winter fuel payments should be means-tested and cut for “the richest pensioners”. The Chancellor’s 10-year campaign has now come to fruition and she has proposed removing the winter fuel payment from pensioners on just £13,000 a year. Does she still think that a pensioner on £13,000 a year is rich?
Rachel Reeves
What came to an end in July was 14 years of a Conservative Government who presided over a fall in living standards, the highest tax burden in 70 years, a debt, as a share of our economy, of almost 100%, and a £22 billion black hole in the public finances just this year. What we have not heard from those on the Opposition Front Bench, or indeed from any Conservative Member of Parliament, is an apology for the mess that they have left this country in, which this Government are now picking up.
Oral Answers to Questions
Laura Trott Excerpts(7 months, 2 weeks ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
The Chief Secretary to the Treasury (Laura Trott)
The Office for Budget Responsibility expects UK living standards to grow in all years of the forecast period.
Allan Dorans
The Building Societies Association described the housing market as “broken”, with first-time homebuyers facing the toughest housing market conditions in 70 years. With the International Monetary Fund projecting interest rates to be around 5% for the remainder of the year and the Government rejecting the Scottish National party’s calls to reinstate mortgage interest relief, does the Chancellor anticipate any relief for first-time buyers in the near future?
Laura Trott
The hon. Gentleman will know that the Bank of England is independent. The good news is that the OBR expects inflation rates to fall to near target in the very near future.
Marion Fellows
The Warm this Winter campaign has found that households will have to pay an additional £1.3 billion to help energy companies to cover bad energy debt. What assurance can the Minister give that the extra charge will be passed on to indebted customers to alleviate their debt burden, rather than it being allowed to just alleviate debt for energy companies?
Laura Trott
It is good news that energy prices are set to fall. The hon. Lady will know that the Chancellor abolished the surcharge in one of his first Budgets.
Patricia Gibson
The UK is set to have the highest level of inflation in the G7 and the lowest rate of growth in the entire OECD in 2025. Bizarrely, the Chancellor claimed ludicrously that the Tories are winning the war on inflation. With GDP per capita continuing to fall as part of the longest unbroken decline since records began, who does the Minister think in the real world really believes that this plan is working, and that the cost of living crisis is easing?
Laura Trott
It is important to note that inflation has more than halved since the Prime Minister took office, and is now at 3.2%. That will have a material impact on the cost of living pressures on households. In addition, support this year includes cutting national insurance rates across the UK and raising the local housing allowance. Benefits are up by 6.7%, the national living wage is up by 9.8%, and pensions are up by 8.5%. We are on the side of the British people.
Dame Caroline Dinenage (Gosport) (Con)
As you know, Mr Speaker, it is not solely households who face increased cost pressures: businesses across our communities do as well, particularly small music venues, which are shutting at the rate of two a week. Ahead of the Culture, Media and Sport Committee’s inquiry into that issue, what thought has the Minister given to a VAT cut for grassroots music venues across our constituencies?
Laura Trott
I know my hon. Friend cares deeply about this matter. I know she has a report coming out in a few weeks, and I look forward to reading it.
Theresa Villiers (Chipping Barnet) (Con)
It is crucial to bring down inflation and ensure that we create the right climate for reductions in interest rates and further tax cuts. Does the Minister agree that is the best way to tackle the cost of living pressures?
Greg Smith (Buckingham) (Con)
In the past financial year, Buckinghamshire Council supported 4,186 people struggling with the cost of living through the £4.8 million of funding from the household support fund. The council’s Helping Hand scheme continues, with £2.4 million of funding through to this September. Does my right hon. Friend agree that Buckinghamshire households who are struggling with the cost of living should get in touch with Buckinghamshire Council to get the help and support that they need from the Helping Hand scheme, which is funded by this Government?
Laura Trott
My hon. Friend is completely correct. The household support fund has done so much to help people struggling with the cost of living. I commend the way that Buckinghamshire Council has handed out the money, and, indeed, will continue to do so throughout the year.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Westminster’s cost of living crisis disproportionately affects those on low incomes, young people, and people living in rural areas with limited travel options. One example is the soaring cost of car insurance, which is inexplicably higher in Scotland than in most other parts of the UK. A 22-year-old with five years’ driving experience might expect their premiums to go down, yet they pay on average £667 more than they did when they passed their test at the age of 17. Why are the UK Government doing absolutely nothing to hold insurance companies to account?
Laura Trott
I cannot comment on the specifics of car insurance companies, but what I can say is that for people struggling with the cost of living, whatever form that struggle takes, working-age benefits are going up by 6.7% this year.
Drew Hendry
Clearly, the Minister has paid no attention to this matter at all. This issue is exceptional to the UK. While prices for car insurance have more than doubled in the UK, they have gone up by only 18% across the EU over the same period, and car insurance has gone down by 20% in an independent Ireland. What are the reasons? Is it Brexit, or shameless profiteering? Or, as we suspect, has Westminster just given up on people in the cost of living crisis?
Laura Trott
I think that we have heard enough from the Brexit zombies on the other side of the Chamber.
Laura Trott
I am, if the hon. Gentleman would just like to listen. The national living wage is up by 9.8% this year, which helps with exactly the type of costs that he is talking about.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
The Chief Secretary to the Treasury (Laura Trott)
In 2020, the Treasury undertook a comprehensive review of the Green Book and how it is used in practice, and we have made several changes as a result. We regularly update the Green Book to ensure that it remains fit for purpose, and we published a further technical update in 2022.
Chris Loder
I represent a rural constituency in Dorset in the south-west of England. My right hon. Friend will know that it is important to me and my colleagues in the region that the Government give due consideration to the south-west when it comes to allocating funds and investment opportunities to it. Typically, the Green Book has not adequately allocated funds in favour of Dorset and neighbouring counties. What steps will she take to correct that?
Laura Trott
My hon. Friend is, as ever, a brilliant advocate for his local area. I note that West Dorset is getting £4.4 million from the UK shared prosperity fund, and the wider Dorset area is benefiting from a range of other significant investments, including £9.7 million from the future high streets fund, but I am happy to meet him to discuss the matter further.
Jim Shannon (Strangford) (DUP)
Like the hon. Member for West Dorset (Chris Loder), I represent a rural constituency. Strangford is the reason I am here, and I want to represent it well. What steps will the Minister take to ensure that all updates to and volumes of the Green Book apply to Northern Ireland as well as to other areas across this great nation?
Laura Trott
The hon. Gentleman raises an excellent point—one that I will be discussing with the Northern Ireland Finance Minister in a couple of weeks.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Chief Secretary to the Treasury (Laura Trott)
The hon. Gentleman will know that this is an issue that is close to my heart, as a former Pensions Minister. We did a huge amount of work to increase the uptake of pension credit. I know that this matters a lot to Members, and work is being done in everyone’s constituency, including the hon. Gentleman’s.
Sir Jeremy Quin (Horsham) (Con)
The lifetime ISA is a positive instrument, but I understand that under its terms there are circumstances under which savers lose not only the benefits of the ISA but also part of their capital investment. That does not seem right; will the Minister please meet me to discuss it?
Scottish Government and Welsh Government Funding
Laura Trott Excerpts(9 months ago)
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The Chief Secretary to the Treasury (Laura Trott)
In addition to changes in funding at supplementary estimates 2023-24, and in line with the statement of funding policy, the Welsh Government have chosen to draw down £265.056 million in resource departmental expenditure limit excluding depreciation, £47.230 million in capital DEL (general) and £37.420 million in capital DEL (financial transactions) from the Wales reserve in 2023-24. £million Scottish Government Welsh Government Resource DEL excluding depreciation1 37,608.692 16,718.329 Capital DEL (general) 6,073.634 3,079.192 Capital DEL (financial transactions) 349.926 124.682 Total DEL 44,032.252 19,922.203
The Scottish Government have confirmed that they wish to carry forward £14.758 million in capital DEL (general) outside of the Scotland reserve and defer a reduction of £52.838 million in capital DEL (financial transactions) from 2023-24 to 2024-25.
The flexibility to carry forward funding outside the reserve and to defer the reduction in capital DEL (financial transactions) was exceptionally agreed to help the Scottish Government and Welsh Government to manage late changes to their budgets.
Revised 2023-24 funding is as follows:
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.
[HCWS373]
European Union Finances: Annual Statement
Laura Trott Excerpts(9 months ago)
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The Chief Secretary to the Treasury (Laura Trott)
I am today laying before Parliament “The European Union Finances Statement 2023 on the implementation of the Withdrawal Agreement” (CP 1043). This is an annual publication; this year’s edition covers the period from 1 January 2023 to 31 December 2023.
[HCWS370]
Oral Answers to Questions
Laura Trott Excerpts(9 months ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chief Secretary to the Treasury (Laura Trott)
As a result of decisions at the spring Budget, the Scottish Government are receiving around £295 million in additional funding in 2024-25 through the Barnett formula.
Martyn Day
According to the Commons Library, the Government have cut the Scottish Government’s capital funding by 16% in real terms from 2022-23 to 2024-25. The Institute for Fiscal Studies forecasts that there will be a further 16% cut by 2029. After 14 years of austerity, inflation and covid, can the Minister tell me why the Chancellor is taking a hammer to our Scottish public services?
Laura Trott
The hon. Gentleman is aware that the block grant has been going up in real terms. He will also be aware that the Scottish Government can switch resource to capital—unlimited amounts, if they choose to do so. He will also be aware, I am sure, that the Scottish Government can borrow up to £400 million of capital each year if they so wish.
Deidre Brock
The Tories have failed to invest in our public services and high-growth industries, dragging the nations of the UK into recession and increased income inequality. The UK Government continue to impose hard cuts to public services. The Commons Library has found that the Scottish block grant will have fallen in real terms in every year since 2020, yet UK Government Ministers continue to deny that fact. Does the Minister understand what “real terms” actually means, and does she see the devastating impact that this is having on public services?
Laura Trott
Just to be absolutely clear, the Scottish Government’s total departmental expenditure limit is growing in real terms over this Parliament by over 1% a year on average.
Alan Brown
Obviously, the Minister does not understand what “real terms” means after all. Analysis by the Institution of Civil Engineers shows a multiplier effect: every £1 spent in the construction industry brings in an additional £2 of spend. That means that the real-terms cut to the Scottish Government’s block grant for capital by £1.6 billion over two years further deprives our economy of a wider £3 billion. Why do this Government think that it is okay to decimate infrastructure spend in Scotland?
Laura Trott
The Scottish Government are well funded to deliver their devolved responsibilities, and receive 25% more funding on average per person than the equivalent UK Government spending in other parts. That translates to £8.5 billion more a year on average.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Consequentials have consequences. The Chancellor announced in his Budget £20 billion of cuts for the public sector, including cuts of 13% in some Departments, and that defies logic. The public sector is crying out for funding, but his choices, if implemented, will lay waste to it. Does the Minister agree with the IFS, which said that it would be genuinely surprising if the Chancellor’s plans could be carried out, or with the Institute for Government, which said that
“these spending plans will be impossible to deliver”,
or with the Resolution Foundation, which said that the plans were fiscal fantasy?
Laura Trott
Over the next Parliament, our plans are for spending to go up in real terms—I want to be absolutely clear about that. Equally, spending has gone up in real terms over this Parliament too. The hon. Gentleman will have noticed that at the beginning of my answers, I explained that Scotland is getting £295 million extra this year through Barnett consequentials.
Drew Hendry
It is no wonder that the Institute for Fiscal Studies says that there is a “conspiracy of silence” from both the Government and the Labour party over the scale of these cuts. As a percentage of UK spending, the Scottish block grant is set to fall to its lowest ever level under devolution, dwarfing its other plans. For Scotland, House of Commons Library figures show capital funding falling by 16% over the next two years. The Chancellor has already confirmed that the Scottish energy sector is the biggest loser from his Budget, and he is doubling down. Why are this Government and this Chancellor trying to be the new hammer of Scots?
Laura Trott
The only area in which I agree with the hon. Gentleman is that I would love to know what the Labour party’s spending plans are for the next Parliament—perhaps Labour Members will enlighten us this evening. I will repeat what I said at the beginning about capital: the Scottish Government have unlimited ability to switch from resource spending to capital spending. That is a choice that they have.
Afzal Khan (Manchester, Gorton) (Lab)
Chris Stephens (Glasgow South West) (SNP)
The Chief Secretary to the Treasury (Laura Trott)
The rise in inflation caused by Putin’s illegal war in Ukraine and the subsequent energy price shock has put enormous pressure on households. Thanks to work by the Bank of England and the Government, the rate of inflation is going down, with the Office for Budget Responsibility expecting it to be back to target next autumn.
Chris Stephens
Since the disastrous Tory mini-Budget of 2022, households are continuing to feel the squeeze at the supermarket, with food prices continuing to rise and real wages falling for the longest unbroken run since records began. Food prices have risen by 26% over the last two years. When will the Government listen to those who wish to follow the lead of Canada and France by introducing a price cap on staple food items at the supermarket?
Laura Trott
Real wages are now, happily, starting to rise and, as I have said, the OBR has said that inflation will be back to target next quarter. What would not help the cost of living is putting people’s taxes up, as the Scottish Government are doing.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The tax burden is at a record high, wages are stagnant, rents and mortgages are up by hundreds of pounds, and food prices have gone up by 25%. The Resolution Foundation has confirmed that this is the only Parliament on record during which living standards have fallen. Our constituents deserve better. When is the Minister going to give the British public a chance to vote for change and call for a general election?
Laura Trott
We have talked a lot today about the £400 billion of support that we put in during the pandemic and the £100 billion of support that we put in to support people during Putin’s energy price shock. The Labour party did not disagree with any of those things, and I think the hon. Lady in her heart of hearts will know that we have to pay for that—at least, I hope she does. We have had to take some difficult decisions, but because of that, the economy is turning a corner. We are able to reduce working people’s taxes, and I hope that she and her party will find it within themselves to support us in that endeavour.
Dr James Davies (Vale of Clwyd) (Con)
Nickie Aiken (Cities of London and Westminster) (Con)
The Chief Secretary to the Treasury (Laura Trott)
I commend my hon. Friend and my hon. Friend the Member for Kensington (Felicity Buchan) on their great work on this project. There appears to be a compelling case, and I know that the programme team at the Department of Health and Social Care is looking closely at the proposal.
Wendy Chamberlain (North East Fife) (LD)
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
Last night on BBC’s “Newsnight”, it was clear that the needs of Wales, in particular on health, are not met in the UK. When has the UK Government ever given England Barnett consequentials based on needs in Wales, Scotland or Northern Ireland? Surely the model of spending under which the Government in England decides for England, and everyone else gets a consequential of that, must end. Nordic countries do not calculate spend as a percentage of their neighbours’ spend. Why is the spending of Scotland, Wales and Northern Ireland dependent on what England decides to spend?
Laura Trott
The Barnett consequentials formula is long established. It gives a clear framework, through which we can understand spending in the devolved nations. The hon. Gentleman will know that it means higher per-person funding in each of the devolved nations than in England.
Mr Ranil Jayawardena (North East Hampshire) (Con)
I am delighted that my right hon. Friend the Chancellor is seeking to make the tax system more family friendly, including by collecting household data in the years ahead, but being family friendly includes looking after the family home. Sweden abolished inheritance tax in 2004. The result was a boom in entrepreneurship, economic growth and higher tax revenues. Will he, or one of the excellent ministerial team, meet me to discuss that further?
Budget Resolutions
Laura Trott Excerpts(9 months, 1 week ago)
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The Chief Secretary to the Treasury (Laura Trott)
It is a privilege to open the final day of debate on the Budget—a Budget with a plan to grow the economy, a plan for better public services and a plan to make work pay. Today’s debate is focused on a theme close to my heart: improving productivity. As some Members know, back in 2010, before I became a Member of Parliament, I worked for my noble Friend Lord Maude on an efficiency and reform agenda that saved the Government £14 billion a year by 2014. It captured everything from buying printer paper collectively to managing Government projects better and digitising services. That agenda not only cut costs but improved productivity.
Ahead of the pandemic, and under this Government, productivity in the private sector increased by an average of 0.7% a year between 2010 and 2019. [Interruption.] As I am sure Opposition Members will be interested to know, that contrasts starkly with the decline in public sector productivity by an average of 0.2% per annum between 1997 and 2009. Our success was entirely due to hard work behind the scenes and a relentless focus on output.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Rather than cherry-picking statistics, will the Minister tell us what she thinks about the fact—confirmed by the House of Commons Library—that the UK has the lowest investment in the G7 and is the second worst performer in the G7, post-pandemic, in terms of economic growth?
Laura Trott
I will say to the hon. Gentleman that since 2010 we have grown faster than France, Germany and Italy, and we are predicted to do the same in the next five years.
It is no coincidence that between 2010 and 2019 the number of violent crimes and burglaries halved. Our reading standards in schools, which were previously behind those of France, Germany and Sweden, raced ahead. The latest technologies, such as the NHS app and virtual wards, are now used by patients across the country.
However, this is not a “once and done” situation. The effect of the pandemic on productivity was significant. Moreover, as Lord Maude has put it, the focus on productivity must
“never end. This will always be a work in progress. There never can be a steady state… The public, for whom public services exist, deserve nothing less.”
That is why this Conservative Chancellor is willing to invest once again to drive change.
The head of the National Audit Office has said that if we can improve public sector productivity, the size of the prize is tens of billions of pounds, and the Office for Budget Responsibility estimates that raising public sector productivity by 5% would be the equivalent of about £20 billion extra in funding.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
While the Chief Secretary is on the subject of the OBR, may I ask her whether the OBR is correct in saying that the target public sector debt measure is forecast to increase, or whether her own personal calculations continue to suggest that debt will fall?
Laura Trott
I am sure that the hon. Gentleman will see in the OBR figures that public sector net debt overall is expected to fall, and public sector net debt excluding the Bank of England is due to fall in the fourth and fifth year of the forecast. [Interruption.] No, that is just the overall public sector net debt figure.
Steve McCabe (Birmingham, Selly Oak) (Lab)
May I pursue the Minister’s response to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty)? Why have the Government chosen a debt measure that excludes the Bank of England?
Laura Trott
To put it simply, it is because we are more in control of that figure. The overall figure is falling, but public sector net debt excludes the impact of the Bank of England on the figures.
The rise in public sector productivity will help us to manage the size of the state in the long term, while also maintaining public service quality and delivering savings for taxpayers. That is why, 14 years on, in my role as Chief Secretary to the Treasury, I am delighted to be leading our public sector productivity programme.
Mr Clive Betts (Sheffield South East) (Lab)
I am pleased that the Minister is in charge of that programme. Perhaps she can explain a little more about it. Local government currently has a deficit of about £4 billion. In the productivity plan for local government, the Government highlighted the need to reduce waste on equality, diversity and inclusion. I have found no Government figure showing how much that will save, but the TaxPayers’ Alliance says that it will save £50 million over three years, towards the £4 billion deficit. Has the Minister a figure that suggests that the saving in that part of the productivity plan will be greater?
Laura Trott
Yes, the savings in the productivity plan will amount to billions of pounds.
Let me say a little about the economic context. The last few years have not been easy. The pandemic, Putin’s illegal occupation of Ukraine, energy price rises, and now conflict in the middle east have taken their toll on the economy, on businesses and on families. However, because of the difficult decisions that the Government have taken, the economy is turning a corner. Inflation has more than halved, from 11% to 4%; real wages have risen for seven months in a row; and unemployment is down, from a high of 8% in 2010 to 3.9% at the end of last year. Because we have stuck to our plan, we have been able to cut the double tax on work, putting £900 back into working people’s pockets. On Sunday, the independent Institute for Fiscal Studies gave its verdict on our tax cuts for workers:
“genuinely putting a lot more money into the pockets of people”.
Christine Jardine (Edinburgh West) (LD)
The right hon. Lady is referring to the 2p cut in national insurance. That cut has been wiped out by the freeze in income tax thresholds, and the average worker on £35,000 a year will still be nearly £400 a year worse off this year than last year. How do these figures match up?
Laura Trott
I am sure the hon. Lady will be pleased to know that the average earner will be subject to the lowest effective tax rate since 1975.
Laura Trott
I am going to make a bit of progress.
Sadly, the Labour party is putting this in jeopardy. Labour Members have no plan to cut taxes, and cannot name a single one that they would cut. Instead, they are trying to pull the wool over the public’s eyes by pretending that they have refinanced their £28 billion a year plan to decarbonise. They themselves have said that their pledge costs £28 billion a year, and they are apparently not scaling their promises down. We all know what that means: more taxes for hard-working families. What the public and the House need to know is this: which tax will they raise to pay for the plan, and, if they are in government after the general election, will they stick to our spending plans as set out in the Budget? The British public deserve to know.
During this Parliament, total departmental spending has increased by 3.2% a year in real terms, and day-to-day departmental spending will grow at an average of 1% a year in real terms beyond the current spending review period. The Government are protecting the record increase in capital spending over this Parliament, which will deliver about £600 billion of public sector investment over the next five years. As announced in the Budget, we are also committing an additional £2.5 billion for the NHS in England in 2024-25, protecting day-to-day funding levels in real terms.
Tim Farron (Westmorland and Lonsdale) (LD)
Is the Minister aware that thousands of people in this country would love to work and be productive, but cannot because they are living with cancer? Cancer is not only a threat to people’s life, but it also limits their ability to earn a living. I am sure that she is aware that a third of people diagnosed with cancer wait two months for their first intervention that will help to cure them. Is there any room in the capital spending that she set out for large-scale investment in radiotherapy, as suggested by the all-party parliamentary group for radiotherapy? That would help to cure people more quickly and in a more targeted way, so that there is no collateral damage, and people can go back to work much sooner.
Laura Trott
I praise the hon. Gentleman for the work that he has done on this very important issue, and I know that the capital we are providing will help with issues such as the one he has highlighted.
We cannot just put more money into public services and hope for the best. I was delighted to read that the hon. Member for Bristol North West (Darren Jones) said recently that he was in favour of reforming public services, not splurging on them. Well, here’s hoping that the Labour party breaks the habit of a lifetime. I genuinely hope that he will agree with some of the measures on productivity that we have set out today, because outcomes are determined by how things are done. By focusing on outcomes, not funding, we can deliver real value for the taxpayer. It is a trap to think that simply spending more buys us better public services. Simply spending more is also not sustainable.
Keir Mather (Selby and Ainsty) (Lab)
On the subject of unfunded spending commitments, we on the Treasury Committee learned from the Office for Budget Responsibility this morning that the Government have not told it about the £46 billion ambition to scrap national insurance contributions altogether, and because the OBR has not been told, it cannot forecast the economic impact that that may have. How does that bake in long-term economic stability for the United Kingdom?
Laura Trott
Unlike the Labour party’s massive £28 billion unfunded tax commitment until 2030, our long-term ambition to cut national insurance and erase the double tax on work does not have a date on it. We have shown that, through careful stewardship of the economy over time, we can reduce people’s taxes without cutting spending.
Simply spending more is not sustainable. If no action is taken, public spending is forecast to grow faster than GDP from 2030; that accounts for pressures that we cannot avoid, such as demographic changes. That must be managed, using all the tools at our disposal—and not by borrowing more, or increasing taxes on the British public. Instead, we have to assess how we deliver public services, and improve them to make the UK more productive and ensure the long-term sustainability of public finances. Yes, this is about money, but it is also about delivering the best services for the public, because productivity is not a theoretical concept; it affects us all, in each area of our everyday lives.
I want better outcomes for children, and teachers being able to spend more time with pupils, rather than filling out paperwork. I want the police to spend more time on the beat, not on forms. As a Member of Parliament representing constituents in Sevenoaks and Swanley, I want nurses and doctors spending time with patients, not having to look at computer screens. Better public productivity means better value for money, better support for frontline workers to do their jobs effectively, and better results.
In last week’s Budget, the Chancellor announced that we are allocating £4.2 billion to investment in productivity. The package is broad and comprehensive, and includes £3.4 billion for the NHS—double its current budget for tech and digital transformation. The NHS says that that will unlock over £35 billion in the coming years—10 times the amount we will put in. At the next spending review, that will be the model for all our public services. The package also includes £105 million for 15 new special free schools across England, which I know will be welcomed across the House. That will create over 2,000 high-quality places for children with special educational needs and disabilities, and prevent local authorities’ use of costly independent provision.
The Budget provides £165 million to tackle the shortage of children’s home placements and to rebuild the children’s home estate. That will reduce the need for expensive and unsuitable emergency provision that does not produce the right outcomes for the children who need our help the most. There is £334 million to cut crime by improving policing technology, and £17 million for modernisation of Department for Work and Pensions services, and replacing the paper-based system for benefits. As a former Pensions Minister, I know the impact that such modernisation has had on the state pension. However, this is just the start. I am also committed to driving forward work to embed productivity at every level across the whole public sector.
Laura Trott
No, I will not. I have been very generous with my time.
When I began thinking about this agenda in 2009, no one could have foreseen the technological changes of the last decade. Those changes are revolutionising the private sector, and we must embrace them in the public sector, too.
Our job is not yet done on the economy, but we are making progress with our plan to reward work and create growth—a plan that would be put in jeopardy under the Labour party. This Budget does what it says on the tin: it sticks to the plan—a plan that Britain needs, a plan that is putting money back in the pockets of British people, and a plan that is working. I commend this Budget to the House.
Several hon. Members rose—
Oral Answers to Questions
Laura Trott Excerpts(10 months, 2 weeks ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
The Chief Secretary to the Treasury (Laura Trott)
The Government stand by households, with one of Europe’s largest support packages, worth on average £3,700 per UK household, but we all know that the key to reducing cost of living pressures is to bring down inflation, which we have more than halved, delivering on the Prime Minister’s promise.
Rachel Hopkins
Families in Luton and Bedfordshire, and indeed the rest of the country, are worse off because of 14 years of economic chaos and incompetence under the Conservatives. Does the Minister concede that, even if the Government’s inflation target is met, families will still be paying £300 a month more for their household bills than they were just 18 months ago?
Laura Trott
Fourteen years of the Conservatives has halved unemployment and increased employment by 4 million. Crucially, poverty is down: we have 1.7 million fewer people in poverty now than in 2010, including 400,000 children and 200,000 pensioners. That is a legacy to be proud of.
Patricia Gibson
The Joseph Rowntree Foundation’s report on poverty in the UK in 2024 reiterates that, consistently, the demographic with the highest poverty rates is children. Although 29% of the children in my constituency live in poverty, the Scottish Government are doing what they can with their limited powers via the Scottish child payment. Will the Chancellor and his team use their powers to make a concerted and determined effort to tackle the scourge of poverty, which is so damaging to our children?
Laura Trott
I reiterate: we have 400,000 fewer children in poverty now than in 2010. In addition, the national insurance contributions cut that we have introduced has been shown to cut child poverty dramatically. Crucially, the leading indicator of whether a child is in poverty is whether their parents are in work, and that is what we have delivered over this Parliament—[Interruption.] Yes it is—it absolutely is. Getting more people into work will help to solve child poverty.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The British public are still struggling with the Conservative cost of living crisis, and the Government are now forcing up council tax. Last week, for the first time in my life, a Conservative MP spoke for me when he said:
“There’s almost no point chopping £100 off tax bills nationally if you’re adding on to it with council tax.”
Labour Members agree with the hon. Member for Mansfield (Ben Bradley). Does the Chief Secretary agree with her hon. Friend and colleague?
Laura Trott
Council tax is a matter for councils, but we put in place a limit, which I do not believe existed under the previous Labour Government. More than that, the most difficult thing for councils and consumers more broadly is the £28 billion-worth of tax rises that Labour is planning in government.
Sam Tarry (Ilford South) (Lab)
Clive Efford (Eltham) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
This is an appalling tragedy, and my thoughts remain with all those affected. We understand the strength of feeling, and the need for action. The Government have accepted the moral case for compensation, and have acknowledged that justice needs to be delivered for victims. As such, the Government intend to respond in full to Sir Brian Langstaff’s recommendations for wider compensation following the publication of the inquiry’s final report in May this year.
Paul Girvan
The Minister’s answering that question has brought forth another question. The Chancellor was previously Secretary of State in the Department of Health, and three of his former colleagues all gave a commitment to address the issue. Now that the Chancellor is in a position to do something about that, how long is it going to take? As this Government’s days are numbered, the difficulty I have is whether this will be in place before we have an election. Will they ensure that the commitment is there?
Laura Trott
I know that the hon. Gentleman has a lifelong friend who has suffered from this terrible tragedy, and I can reassure him that we are determined to do right by the victims and those who have tragically lost their loved ones. The victims of the infected blood scandal deserve justice and recognition. On his question on timing, Governments of all colours have failed to sort this out, but I am pleased that the interim payments at least have been paid. As I have said, the Government are committed to the moral case for compensation and we are expecting the final report very soon. We will move as quickly as possible afterwards.
Clive Efford
We have had Sir Brian Langstaff’s recommendations since April 2023. Mrs Dorricott, the wife of the Chancellor’s constituent Mike, told the inquiry that the Chancellor, when he was Health Secretary, told Mr Dorricott:
“Don’t worry about this, we’ll sort it.”
He is now the Chancellor, with his hands on the purse strings, so will he now—through his colleague the Chief Secretary to the Treasury—confirm that the Government have identified the contingencies to pay the compensation to the people hit by the infected blood scandal?
Laura Trott
I can confirm that we are working with the Cabinet Office and the Department of Health and Social Care to ensure that we can respond as quickly as possible once the inquiry reports.
Selaine Saxby (North Devon) (Con)
Dr Luke Evans (Bosworth) (Con)
The Chief Secretary to the Treasury (Laura Trott)
The Government are committed to ending low pay. From 1 April 2024, the national living wage will increase by 9.8%, to £11.44. That represents an increase of more than £1,800 to the annual earnings of a full-time national living wage worker and it is expected to benefit about 2.7 million workers.
Dr Luke Evans
I congratulate the Government on increasing the national living wage, because that will make a huge difference. However, after speaking to not only those in the public sector, at the likes of my local Leicestershire County Council and Hinckley and Bosworth Borough Council, but small businesses in the private sector, I know that there is a trade-off, because they have to foot that wage bill. What steps can the Government take to make sure that those businesses and the public sector have the money to pass on to those who are earning so well?
Laura Trott
I thank my hon. Friend for his question, and I will take the two parts of it in turn. The Government continue to support businesses with the higher costs through a generous package of support. At the autumn statement, we showed our commitment to supporting small businesses by extending the 75% retail, hospitality and leisure relief, and by freezing the small business multiplier, which will protect more than 1 million properties from the multiplier increase. Yesterday, we announced a wide-ranging package of support worth £600 million for local councils, including £500 million of new funding for social care.
Mr Gregory Campbell (East Londonderry) (DUP)
I understand that concerns were expressed some years ago about how a significant increase in the minimum wage may well have a knock-on effect, particularly on the hospitality sector. Given that that did not come about with previous living wage increases, will the Chief Secretary commit her Government to ensuring that future increases will be monitored closely to enable and assist small businesses to increase wage levels systematically and sustainably over the longer term?
Laura Trott
I can commit to the hon. Gentleman that we are absolutely monitoring the effects, but, as I said, a good package of support is in place for businesses.
Theresa Villiers (Chipping Barnet) (Con)
Paul Blomfield (Sheffield Central) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
The university sector is one of the jewels of this country and I am proud that we have four of the world’s top 20 universities. I am happy to look at any individual proposals from the hon. Gentleman.
David Duguid (Banff and Buchan) (Con)
Last June the Exchequer Secretary announced the energy security investment mechanism, and I welcomed the announcement in last November’s autumn statement that the floor price would rise with inflation from April. How and when will that be legislated for, and will he look at alternative ways of setting that floor price, other than the 20-year reference period that is already used?
Public Service Pension Scheme Indexation and Revaluation 2024
Laura Trott Excerpts(10 months, 3 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Laura Trott)
Public service pensions continue to be among the very best available. Scheme Police Fire-fighters Civil Service NHS Teachers LGPS Armed Forces Judicial Revaluation for active member 7.95% 7.7% 6.7% 8.2% 8.3% 6.7% 7.7% 6.7%
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 08 April 2024 by 6.7%, in line with the annual increase in the consumer prices index up to September 2023, 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 2023. Public service schemes which rely on a measure of prices, therefore, will use the figure of 6.7% 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 2023. Public service schemes which rely on a measure of earnings, therefore, will use the figure of 7.7% for the earnings element of revaluation.
The effective date of revaluation listed in the order is 1 April 2024, but some schemes have chosen to move their effective revaluation date to 6 April 2024 in order to manage interactions with the annual tax allowance.
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:
[HCWS211]
Oral Answers to Questions
Laura Trott Excerpts(1 year ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Chief Secretary to the Treasury (Laura Trott)
A very merry Christmas, Mr Speaker. The Government guarantee to maintain the £2.4 billion annual budget for farmers across the UK for every year of this Parliament. As agriculture is devolved, it is ultimately for the Scottish Government to decide how to allocate that money to farming in Scotland.
Mr Carmichael
The Minister will be aware of the frustration that is felt by many farmers and crofters in Scotland that the £33 million that was given to the Scottish Government for a specific purpose as part of the Bew review has been deferred hitherto. What will she do in future to ensure that where money is given for the express purpose of supporting Scottish agriculture, it is in fact used for that purpose?
Laura Trott
The right hon. Member raises an excellent question. The SNP Government are yet to clarify when this ringfenced money will be returned. I hope they will do so this afternoon at the Budget.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
May I echo your comments, Mr Speaker, with Christmas wishes for all the House staff, your staff and Members? The UK Government’s attempt to overhaul the EU subsidy scheme has left English farmers 50% worse off in cash terms than in 2020. While the Scottish Government have sought to protect our farmers’ payments, can the Minister guarantee that the UK Government will not try to undermine their payments and devolution by back-door use of the United Kingdom Internal Market Act 2020?
Laura Trott
I note that the hon. Member did not answer my question, nor that of the right hon. Member for Orkney and Shetland (Mr Carmichael) about when the ringfenced money will be returned.
Mr Speaker
Order. Questions are normally to the Minister, not the other way around.
Laura Trott
Very good point, but I still maintain that the hon. Member needs to clarify that matter. It is up to the Scottish Government if they would like at any point to top up the amount that goes to Scottish farming. I encourage them to do so this afternoon at the Budget.
Drew Hendry
I do not think any Scottish farmer will be reassured by what the Minister has just said. I just said that the Scottish Government are protecting those farmers’ payments, while English farmers are losing out, as we know. What we do not have from the UK Government is detail on what they will be doing after 2025. If we had remained in the European Union, we would know that figure for farming subsidies so that the Scottish Government could make plans to help farmers plan ahead. Can the Minister apologise for that situation and guarantee that in the early months of next year we will have clarity on farming payments?
Laura Trott
The UK Government have laid out plans for the agriculture transition in England that go beyond the current spending review, giving farmers increased certainty over policy and spending intent for years to come. The Scottish Government could decide to provide farmers in Scotland with similar certainty if they chose to do so.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
The OBR revised up its growth figures after data revisions by the Office for National Statistics indicated the economy had recovered more fully from the pandemic than had been expected, which means that the current level of real GDP is nearly 3% higher than was predicted in March forecasts.
Kerry McCarthy
The Government put a positive spin on the provisional local government finance settlement yesterday, but the Local Government Association said that it did not provide enough funding to meet the severe cost and demand pressures on councils, and assumed that all councils would increase their tax bills by the maximum allowed next year. What will that do for my constituents’ living standards?
Laura Trott
As the hon. Lady will know, we put billions of pounds into councils this year, and the provisional settlement is above what is expected to be the inflation rate next year. If she has specific issues with her local council, I shall be happy to take that up with her.
Lloyd Russell-Moyle
We have seen one of the greatest falls in living standards in a generation, and the Chancellor has callously removed the household support fund from councils. In Brighton the fund pays for free school meal vouchers in the holidays, the warmth and wellbeing scheme, career centres, family hubs, and food banks such as the one in Whitehawk where my constituency office has its surgeries. Will the Minister think again about scrapping the household support fund, so that councils can support the very worst off?
Laura Trott
I want to reassure the hon. Gentleman: no decision has been made about the household support fund. More broadly, however, we have pulled in an average of £3,700 per household this year to help people with exactly what we are talking about. This Government are on the side of people during what is a very difficult time.
Justin Madders
According to the Low Pay Commission, one in five people who should be receiving the national minimum wage do not even get that. This is a huge failure of enforcement. How can we have increased living standards if people do not even receive the legal minimum to which they are entitled?
Laura Trott
If the hon. Gentleman can give individual examples, I ask him please to let us know. It is, obviously, extremely important that we enforce this, but I should point out that we will increase the levels by 9.8% next year, which will make a significant difference to households up and down the country.
Greg Smith (Buckingham) (Con)
Is not the more fundamental problem with the question posed by Opposition Members the fact that the OBR’s forecasts are never right?
Laura Trott
All I can say is that they have definitely gone in the right direction, because the economy next year will be billions of pounds bigger than we thought it was going to be in March.
Samantha Dixon (City of Chester) (Lab)
The Chief Secretary to the Treasury (Laura Trott)
Value for money is at the heart of Government spending and it is one of the key considerations for any decision involving the use of public funds across Government. As Chief Secretary, I am committed to tackling waste and promoting productivity across the public sector.
Samantha Dixon
Last year, Government officials admitted that they were paying companies to burn and destroy 15,000 pallets of unusable personal protective equipment each month. Does the Treasury have any idea how much wasted PPE has gone up in smoke this year?
Laura Trott
During the pandemic our priority was absolutely clear: to get PPE to the frontline as quickly as possible. There was an unprecedented global increase in demand for PPE during the emergency response to the pandemic and items were procured at pace. The Department of Health and Social Care continues to seek to recover fraud losses to ensure that public funds are protected.
James Murray (Ealing North) (Lab/Co-op)
Throughout the pandemic, people across the country made extraordinary and heart-wrenching sacrifices, yet as they did so, a small minority were instead making millions of pounds by ripping off the taxpayer. With conflicts of interest, defective goods and exorbitant profit margins, it has been greedy and grubby and this Conservative Government have enabled it all. As taxpayers, we want our money back, so Labour will create a covid corruption commissioner to chase down every pound we can. Does the Minister have any idea just how angry people are that our country has been taken for a ride?
Laura Trott
The hypocrisy is absolutely astonishing. During the pandemic the shadow Chancellor wrote that the strategy of turning to big-name UK manufacturers was not delivering the supply that was needed. Yes, we procured things very fast—we needed to do that to get things to the frontline—and we are trying to get back every single penny that was lost to fraud, but we make no apology for doing whatever we could to get PPE to the frontline as quickly as possible.
James Murray
The Minister’s response really does not reflect the seriousness of the situation. This is not just one bad apple; this is a rotten culture that goes to the very top, with £8.7 billion lost on wasted PPE and £7.2 billion lost to covid fraud. That is £15.9 billion of public money gone at a time when people and public services are struggling. Can the Minister remind the House who was Chancellor at the time that all of this was signed off?
Laura Trott
I do not know what more I can add to my last answer. This was done very quickly, at pace, because we were desperate to get PPE to the frontline as quickly as possible. We have set up initiatives to recoup money from fraudulent activity including the Public Sector Fraud Authority, which has already saved taxpayers £311 million in the first year of operation.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Theresa Villiers (Chipping Barnet) (Con)
The Chief Secretary to the Treasury (Laura Trott)
Inflation has now halved from 11.1% in October 2022 to 4.7% in October 2023, delivering on the Prime Minister’s pledge. This has happened not by accident but as a result of difficult decisions made by the Government and the Bank of England—Government decisions that were opposed every step of the way by the Labour party.
Theresa Villiers
Thank you for calling me to ask a question while I catch my breath, Mr Speaker!
A major component of inflation over this past year has, of course, been the energy price shock. What are the Government doing to ensure the continued expansion of renewable energy so that we have greater energy security, and so that we are more resilient in the face of energy price shocks from overseas?
Laura Trott
My right hon. Friend is right, and she nailed the delivery of her question while out of breath.
At the autumn statement, the Chancellor announced measures that demonstrate the Government’s ongoing commitment to renewable energy as a priority growth sector essential to our energy security and net zero ambitions. The announcements made include a new investment exemption from the electricity generator levy and a £960 million green industries growth accelerator.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (Con)
Mr Rob Roberts (Delyn) (Ind)
The Chief Secretary to the Treasury (Laura Trott)
I will write to the hon. Gentleman.
Sarah Dyke (Somerton and Frome) (LD)
Laura Trott
I know that the hon. Lady will have welcomed the most important change to cost of living pressures, which is inflation coming down. In addition, we have had the cost of living payments this year, and also benefits going up by 10.1% this year and by more than the expected level of inflation next year. We as a Government have done all we can to support people and will continue to do so.
Tim Loughton (East Worthing and Shoreham) (Con)
Rachael Maskell (York Central) (Lab/Co-op)
Right now, council leaders up and down the country are having to make very difficult decisions on cutting vital services—not because of profligacy, but because of Government cuts to their funding. What steps is the Chancellor taking to ensure that local authorities—such as that in York, which is the lowest-funded area—are adequately funded?
Laura Trott
The hon. Lady will have heard my answer to a previous question where I stated that we have put billions of pounds of extra money into local government this year to cover pressures. We recognise that those pressures are real, which is why the provisional settlement proposes an above-inflation rise for next year.
Mr David Davis (Haltemprice and Howden) (Con)
A fortnight ago, Kaye Adams, a TV presenter, won her case against His Majesty’s Revenue and Customs on IR35 status. Despite the fact that she won her first tax tribunal on the issue, HMRC took her to either a tribunal or court four times over a nine-year period, forcing her to spend £200,000 in legal fees. HMRC spent many times that, using two King’s counsel at the last hearing alone. This was over a net tax bill of £70,000. There is no conceivable economic case for that. What HMRC is trying to do is move the guidelines by coercing Ms Adams and using her as an example to intimidate other self-employed workers to give in to HMRC’s bullying. This is a disgrace. It has gone on for too long. The 2021 revisions were inadequate and ministerial oversight is too weak. When will the Government review IR35 and, ideally, abolish it?
Laura Trott
My hon. Friend is a brilliant advocate for his constituency. I hear what he has to say and I am happy to meet him to talk about it.
Martin Vickers (Cleethorpes) (Con)
My right hon. Friend is well aware of the threat to thousands of jobs at Scunthorpe steelworks and many more in the supply chain that supports it, all of which would have a devastating effect on the economy of northern Lincolnshire. Can he and his colleagues in the Department for Business and Trade bring a speedy conclusion to the negotiations and lift the cloud over Scunthorpe?