EU Budget (Surcharge)

Debate between Paul Flynn and George Osborne

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

Sadly not is the short answer to my hon. Friend’s question. The Prime Minister we should credit for the rebate is Margaret Thatcher.

[Paul Flynn (Newport West) (Lab)]

May I try to help the Chancellor? He is in danger of becoming illiterate as well as innumerate. The word “result”, which he used once today and three times last week, can mean a win, a loss or a draw or, as in this case, a confidence trick.

[Mr Osborne]

I take it as a win for Britain. Again, I do not want to follow lessons from Labour MPs about how to negotiate in Europe when they gave up much of the rebate, signed us into the eurozone bail-outs, gave up many of our vetoes over many years and refused to give the British people a say in referendums in key treaties.

Economic Policy

Debate between Paul Flynn and George Osborne

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

The great thing is that we, as a country, have experienced the shadow Chancellor’s economic policy, because he was the chief economic adviser to the Government. We had the biggest financial crisis in our history and the deepest recession for 100 years, and many people lost their jobs. We have had a dry run of what it would be like if he were ever allowed back.

[Paul Flynn (Newport West) (Lab)]

For the past three years, the Government have blamed all problems on the EU, the previous Government or the civil service. On what precise date will the Government take responsibility for the ineptocracy they have created?

[Mr Osborne]

Unless the hon. Gentleman can find anyone else to blame for the fact that there was an 11.5% budget deficit—[Interruption.] That was what we inherited from Labour, and we have cut it by a quarter. That just shows how economically illiterate Labour Back Benchers are.

Sovereign Grant Bill

Debate between Paul Flynn and George Osborne

Thursday 14th July 2011 Commons Chamber

[Mr Osborne]

I cannot speak on what happened last week, but I would just draw the hon. Gentleman’s attention to this distinction: two weeks ago, on the Floor of the House, we had something like a Second Reading debate about the principles of the Bill. In the comprehensive spending review statement last October, I set out how we proposed to proceed on the subject; that was quite well known. There is not a great deal of surprise about the idea in the Bill of a sovereign grant, linked to the revenues of the Crown Estate and so on. As I say, I accept that the procedure is rather unusual, but the effect is that the House had something akin to a Second Reading debate a couple of weeks ago, and we will use the debate on clause 1 to have something akin to a Second Reading today, too. I hope to address all the issues that people raised two weeks ago in my response on clause 1. Of course, we will have time later today to go through other parts of the Bill.

[Paul Flynn (Newport West) (Lab)]

A fortnight ago, the House was exceptionally thinly attended, even for a Thursday. Will the Chancellor tell the House when Back Benchers were informed that the Bill was coming before the House?

[Mr Osborne]

The problem that Parliament had was that under the procedures of the House, we had to receive a gracious message from Her Majesty the day before. I do not expect the hon. Gentleman to agree with the procedure, given his broader views on the monarchy, but we had to wait for that gracious message before making it publicly known that we would have a debate in the House. That is what happened. I spoke to the official Opposition, and the Prime Minister spoke to the Leader of the Opposition a week earlier, but I accept that the debate was not as fully attended as it might have been. However, we did spend a couple of hours discussing the matter a couple of weeks ago, and there were quite a number of speeches made, so even though the debate was not as fully attended as, for example, yesterday’s proceedings in Parliament, attendance was not that dissimilar to attendance today. Of course, there has been lots of notice of today’s debate.

[Paul Flynn]

rose—

[Mr Osborne]

I will give way, and then I should probably make some progress on clause 1 stand part.

[Paul Flynn]

I do not think it is fair to blame the monarch for the way in which the measures were rushed into the House. Normally, if there is a change to business, a business statement is made to the House as early as possible; I cannot remember one being made at all in this case. Most hon. Members had other pressing business on that day, and only those who were here in the morning had any idea that the measures were going ahead.

--- Later in debate ---

[Mr Osborne]

I thank my hon. Friend. When the Chair of the PAC, the right hon. Member for Barking (Margaret Hodge), spoke in the debate two weeks ago, she was very generous in her tribute and made it pretty clear that the PAC would be getting to work on its job. I served on the PAC, as its most junior member, with the hon. Member for Glasgow South West, and I remember us making an interesting visit to Kensington palace to investigate royal finances. For some years, therefore, the PAC has been establishing a reputation for examining the books in this area.

[Paul Flynn]

rose—

--- Later in debate ---

[Mr Osborne]

I think that that is pretty unlikely and pretty theoretical, to be honest. Since 1760, it has been an established precedent that the monarch hands over the revenues of the Crown Estate to the Government of the day. There are many powers that we vest in our monarch. The Queen has wisely, like her predecessors, chosen not to use those powers. As I say, I think that that question is pretty theoretical.

[Paul Flynn]

In the debate two weeks ago, the Member who represents the middle ages, the hon. Member for North East Somerset (Jacob Rees-Mogg), suggested that the Queen paid income tax at a higher rate than any other citizen. Will the new arrangements be so transparent that we know the precise rate of tax the monarch pays and whether the monarch gets the expected windfall of revenue from wind and tidal generation in their 15%? If that revenue becomes excessive, will it be curtailed to a suitable level?

--- Later in debate ---

[Mr Osborne]

The money is not paid directly. It comes into the Exchequer, like other revenues, and is then paid out to the royal family. It is paid out of general public funds through estimates voted by Parliament. The only link is that we have a formula for how much we give the royal family. However, there is no direct transfer of money from the Crown Estate to the royal family.

[Paul Flynn]

rose—

[Mr Osborne]

If the hon. Gentleman will allow me, I will make some progress.

I hope that I have answered the shadow Chancellor’s first question about the level of funds. In the end, it is a matter of judgment whether £34 million or so is the right amount for the future. The newspapers’ reaction to my statement a couple of weeks ago was not much of a guide. The Independent headline read, “Queen guaranteed £35m ‘recession-proof’ income”, while The Daily Telegraph wrote, “Monarchy ‘shorn of its dignity’ to save money”. I think we probably got it about right somewhere in between the two.

That leads to the second and probably most important question that the shadow Chancellor asked: how can we ensure that the sovereign grant is neither too high nor too low, and what can we do about it if it is judged to be either? Basically, the Bill introduces a number of important safeguards. First, it provides for a reserve fund so that any unspent surplus from the sovereign grant that year will go into a reserve fund. Under the civil list, there has always been a reserve fund. Indeed, it reached £37 million early last decade. We propose that the reserve fund should be capped so that it does not go above about 50% of the annual grant. In other words, assuming that the grant is likely to be £34 million, the reserve fund would not be allowed to rise above £17 million. However, it is right that the royal household has a reserve to call upon for major capital works that it needs to undertake, although, as I said, we are introducing for the first time a cap on that reserve.

The Bill retains as the three royal trustees the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse. It is our responsibility to act in any given year to ensure that the reserve remains within that 50% cap. If it is going to be higher, we can act to reduce the cash going to the royal household through the grant to below 15% of Crown Estate profits. That is one check.

--- Later in debate ---

[Mr Osborne]

First, the reserve will be audited by the National Audit Office, as the Bill makes clear. Secondly, the trustees of the royal finances—the Keeper of the Privy Purse, who is the Queen’s appointment, but also the Chancellor and the Prime Minister of the day—have oversight of the reserve. That is similar to the current arrangement. The Chancellor of the Exchequer—who undertakes this work more than the Prime Minister—and the Treasury will ensure that the reserve is used for proper purposes. As I have said, the reserve is also accountable to the National Audit Office and the Comptroller and Auditor General.

[Paul Flynn]

I have listened carefully to what the Chancellor has said, but I am still baffled as to why a simple mechanism that could be easily understood has not been used, perhaps similar to the one used to change pensions every year. Instead, we are to have a complex system under which, if the Crown Estate does well, royalty will win, and if it does badly, the taxpayer will lose.

[Mr Osborne]

As I have said, we could have chosen another mechanism, but I thought that it was not unreasonable to take a large, conservatively run property company to determine expenditure by the royal household, given that a lot of its expenditure is on property maintenance and the like. I completely accept that not every Member of the House will agree with that, but the effect, which is surely the important thing, is that the amount of money going from the public purse to the royal family will be broadly the same. They were receiving about £34 million on average from the civil list, the palaces grant and the travel grant, plus the money put into the reserves by the taxpayer, and they will go on receiving £34 million. We can have a debate about the mechanism, but the effect will be pretty much to continue through this Parliament with the sums that they were getting during the last one. We are of course talking in cash terms, which will mean about a 9% real cut, coming on top of a more than 15% real cut over the past 20 years.

I know that we are still debating clause 1, but I hope that the Committee will acknowledge that, in accepting the shadow Chancellor’s amendments to clause 7, we have tried to show that we are open to argument and open to trying to work on a cross-party basis. We want to ensure that the Bill proceeds with the consent of those in all parts of the House of Commons.

I want briefly to deal with the shadow Chancellor’s third and fourth questions. He asked about the issue of accountability, and he has tabled amendments proposing annual value-for-money studies. I would much rather leave the discretion with the Comptroller and Auditor General and the Public Accounts Committee. If they want to undertake such studies, they may do so, but I propose to leave that discretion with them. I remind the Committee that we are undertaking a pretty historic transfer of accountability to Parliament here. Parliament has fought for many decades to get scrutiny of the official expenditure of the royal family, and that is now happening through the Bill. Of course, the Public Accounts Committee will be able to ask the Keeper of the Privy Purse, as the accounting officer, to come before it to give evidence.

Let me deal with the fourth question, which was about royal protection. I am afraid that I will not be able to answer the shadow Chancellor’s request here. I have looked into it and made quite a number of inquiries to probe whether it would be possible for me to give the Committee more information about how much is spent on royal security. I have to say that I have run into a metaphorical brick wall in Whitehall, probably for very good reason, which is that it would not be appropriate—this was a view taken by Home Secretaries over many years—to reveal how much was spent on royal security because that might present a security risk. Unfortunately, I am not able to accede to the shadow Chancellor’s request. Let me reassure the Committee, however, that in the process, I have taken a look at the protection arrangements and costs, and I certainly satisfied myself that they are reasonable, proportionate, in line with the current threat assessment and pretty cost-effective. I am fairly confident that the Queen and her family are adequately protected.

I hope that I have answered the various questions asked. My hon. Friend the Member for Gainsborough asked a question about Frogmore, particularly the mausoleum for Queen Victoria and Prince Albert. The royal household has confirmed that it expects to carry out conservation work on the mausoleum over the next five to eight years, so in a few years’ time, my hon. Friend will be able to visit a much restored and improved mausoleum at Frogmore.