Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of introducing a system on universal basic capital based on the universal roll-out of sidecar accounts into which is paid a one off dividend from the National Wealth Fund.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government recognises the positive effect that saving can have on financial resilience and is committed to incentivising greater saving and investment. The Government supports people of all incomes and at all stages of life to save and offers a wide range of savings products, including the Individual Savings Accounts (ISAs), Junior ISA and Help to Save. We have also committed to consider what more can be done to support household savings as part of the Financial Inclusion Strategy which will be published later this year.
The purpose of the National Wealth Fund is to support the delivery of the Government’s industrial strategy, mobilise private capital and make an overall return for the taxpayer. This will support the Government’s clean energy and growth missions.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what role the Growth Mission Board will have in the Spending Review.
Answered by Tulip Siddiq
Delivering growth is the government’s number one mission; through the growth mission, the government is restoring stability, increasing investment, and reforming the economy to drive up prosperity and living standards across the UK. This will be reflected in the government’s approach to the Spending Review, as part of which departments will be required to prioritise growth within their spending plans. The Growth Mission Board will continue to drive forward the government’s growth mission to rebuild Britain and make every part of the country better off.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what role her Department’s Enterprise and Growth Unit will have in supporting (a) the Government’s Growth Mission and (b) the Spending Review next year.
Answered by Tulip Siddiq
The growth mission is the government’s central mission. The Enterprise and Growth Unit plays a key role in driving the mission forward. It is focused on policy development, in partnership with business, industry and other stakeholders, across the seven growth mission pillars outlined at the Autumn Budget. It works closely with other groups within HM Treasury, for example the International and Financial Services Groups and the new Growth Delivery Unit which is focused on delivery.
At the Spending Review, the Enterprise and Growth Unit is responsible for spending control for several departments and will work closely with departments to ensure spending plans are affordable and support the government’s missions.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor for the Exchequer, if she will publish the forecasts of the size of the UK labour force broken down by the net migration forecast by (a) the Office of Budget Responsibility and (b) other bodies for the forecast period used by that Office.
Answered by Tulip Siddiq
The independent Office for Budget Responsibility is responsible for producing forecasts of the UK economy, including the size of the labour force and net migration. The OBR’s latest forecasts, in the October 2024 Economic and fiscal outlook, are available at the OBR’s website.1.
The Office for National Statistics publishes National Population Projections. For the purposes of producing these projections, the ONS produces assumptions for the projected growth in population due to net migration. The ONS’s latest projections, published in January 2024, assume long-term net international migration of 315,000 per year from the year ending mid-2028 onwards. The projections are published on the ONS’s website here: National population projections - Office for National Statistics
1. https://obr.uk/efo/economic-and-fiscal-outlook-october-2024/
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the planned £20.4 billion of research and development spending on (a) economic growth, (b) the national investment rate and (c) crowding in of private investment.
Answered by Darren Jones - Chief Secretary to the Treasury
At Autumn Budget 2024, the government protected R&D by allocating £20.4bn to support its missions, including the growth mission. Recent Department for Science, Innovation and Technology published research has found an average rate of return to public R&D of 40% after 6 years from when the investment is made [1]. The government’s investment will also boost business investment in R&D. Although estimates of the impact on private investment vary, on average £1 of public R&D investment leverages around £2 of private R&D investment in the long run [2]. The Office for Budget Responsibility is responsible for modelling the impact of government policy on the economy.
[1] Returns to Public Research and Development - GOV.UK
[2] Research and development: relationship between public and private funding - GOV.UK
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of the amount of additional business investment due to the capital allowances measures in the corporate tax roadmap.
Answered by James Murray - Exchequer Secretary (HM Treasury)
As a government, we are determined to provide the stability needed by businesses to make investments that are critical to boosting growth in the UK.
That is why, in the Corporate Tax Roadmap, the Government has committed to maintaining the fundamental features of our world-leading capital allowances system, for the duration of this Parliament. This includes permanent full expensing system and the £1 million Annual Investment Allowance. As a result of permanent full expensing, the OBR expect business investment to increase by around £3 billion each year, and in the long run GDP will be 0.2% higher each year.
With a stable and predictable capital allowances system, businesses will be able to rebuild the confidence they need to make significant long-term investment decisions.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of capital spending on economic growth in the next (a) five and (b) ten years, specifying (i) the fiscal multipliers targeted and (ii) the private sector investment included.
Answered by Darren Jones - Chief Secretary to the Treasury
Economic growth is the number one mission of the government. Through the growth mission, the government will deliver a milestone of higher living standards in every part of the United Kingdom by the end of the Parliament.
Investment is a vital part of addressing the growth challenge. Autumn Budget began rebuilding Britain by increasing public investment and unlocking private investment. Public sector net investment will average 2.6% of GDP over the Parliament, with over £100 billion of additional capital investment over the next five years. This will strengthen the UK economy over the long term.
When making allocation decisions, the Treasury scrutinises individual capital spending proposals in line with the principles set out in the Green Book and Five Case Model, to ensure that they deliver value for money. It also considers these in line with the government’s wider priorities, such as growth, and their overall deliverability and affordability.
The independent Office for Budget Responsibility produces regular and comprehensive forecasts on the impact of current government policies, including judgements about fiscal multipliers.
The OBR confirms that the Budget will have a positive impact on GDP in the next parliament and into the longer term from additional public investment. If sustained, the OBR judges the higher public capital spending, and the higher private sector investment this incentivises, could increase potential output by 0.4% after 10 years, and 1.4% in the long run.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what (a) metrics and (b) fiscal multipliers she plans to use to take allocation decisions for capital spending to Departments in the next five years.
Answered by Darren Jones - Chief Secretary to the Treasury
Economic growth is the number one mission of the government. Through the growth mission, the government will deliver a milestone of higher living standards in every part of the United Kingdom by the end of the Parliament.
Investment is a vital part of addressing the growth challenge. Autumn Budget began rebuilding Britain by increasing public investment and unlocking private investment. Public sector net investment will average 2.6% of GDP over the Parliament, with over £100 billion of additional capital investment over the next five years. This will strengthen the UK economy over the long term.
When making allocation decisions, the Treasury scrutinises individual capital spending proposals in line with the principles set out in the Green Book and Five Case Model, to ensure that they deliver value for money. It also considers these in line with the government’s wider priorities, such as growth, and their overall deliverability and affordability.
The independent Office for Budget Responsibility produces regular and comprehensive forecasts on the impact of current government policies, including judgements about fiscal multipliers.
The OBR confirms that the Budget will have a positive impact on GDP in the next parliament and into the longer term from additional public investment. If sustained, the OBR judges the higher public capital spending, and the higher private sector investment this incentivises, could increase potential output by 0.4% after 10 years, and 1.4% in the long run.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of R&D tax reliefs on (a) business investment and (b) economic growth.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government recognises the important role that research and development (R&D) plays in driving innovation and economic growth as well as the benefits it can bring for society.
Overall, R&D reliefs will support an estimated £56 billion of business R&D expenditure in 2029-30, a nearly 20 per cent increase from £47 billion in 2022-23.
The latest evaluations (“Evaluation of the research and development tax relief for small and medium-sized enterprises” and “Evaluation of the research and development expenditure credit”) were published in 2020 by HMRC and can be found on the gov.uk website. In the Corporate Tax Roadmap published at Autumn Budget, the government committed to periodically evaluating the R&D reliefs to ensure they are as effective as possible and underpinned by a credible, up to date evidence base.
Asked by: Liam Byrne (Labour - Birmingham Hodge Hill and Solihull North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what metrics she plans to use to assess the value for money of capital spending allocated over the next five years.
Answered by Darren Jones - Chief Secretary to the Treasury
Economic growth is the number one mission of the government. Through the growth mission, the government will deliver a milestone of higher living standards in every part of the United Kingdom by the end of the Parliament.
Investment is a vital part of addressing the growth challenge. Autumn Budget began rebuilding Britain by increasing public investment and unlocking private investment. Public sector net investment will average 2.6% of GDP over the Parliament, with over £100 billion of additional capital investment over the next five years. This will strengthen the UK economy over the long term.
When making allocation decisions, the Treasury scrutinises individual capital spending proposals in line with the principles set out in the Green Book and Five Case Model, to ensure that they deliver value for money. It also considers these in line with the government’s wider priorities, such as growth, and their overall deliverability and affordability.
The independent Office for Budget Responsibility produces regular and comprehensive forecasts on the impact of current government policies, including judgements about fiscal multipliers.
The OBR confirms that the Budget will have a positive impact on GDP in the next parliament and into the longer term from additional public investment. If sustained, the OBR judges the higher public capital spending, and the higher private sector investment this incentivises, could increase potential output by 0.4% after 10 years, and 1.4% in the long run.