Oral Answers to Questions
David Gauke Excerpts(7 years, 2 months ago)
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Paula Sherriff (Dewsbury) (Lab)
The Chief Secretary to the Treasury (Mr David Gauke)
Annual funding to the Department of Health is already being increased by £17 billion by 2020-21. This reflects the priority that the Government put on investing in the NHS.
Kelvin Hopkins
OECD statistics show that the Governments of Germany, France, Holland, Sweden and Denmark spend an average of 9% of GDP on health compared with 7.7% in the UK—a massive difference of £23 billion a year. The NHS is desperately underfunded and it is no surprise that it is suffering, so is the Chancellor really going to take this seriously in the Budget?
Mr Gauke
I think the hon. Gentleman will find that the OECD has more recently put out revised numbers to show that the UK’s expenditure on health is very close to some of those other countries. The fact is that we can only have a properly funded NHS if we have a strong economy, and only the Conservative party can deliver it—a point that the people of Copeland may have noticed.
Paula Sherriff
When lives are on the line it is imperative that we as parliamentarians get it right. We need some honesty about what the current NHS crisis means: cuts to staff, longer waits, and hospitals at risk of closure. Does the Minister agree that the Government need to provide a long-term, sustainable financial package to guarantee NHS services for the future?
Mr Gauke
It was this Government who announced a long-term, financially sustainable package, which is why, in real terms, funding for the NHS will increase by £10 billion above inflation by 2020-21. Let us remember that since 2010 there are 2,300 more people attending accident and emergency departments within the four-hour A&E standard, 5,000 more operations every day, and 1,400 more people every day treated for mental health conditions, and the NHS is conducting 16,000 more diagnostic tests every day.
Mr Andrew Tyrie (Chichester) (Con)
For the past two years the Department of Health has cut its capital budget by 20% and used that for running costs and to pay for salaries. Did the Treasury press for these cuts in capital spending—I hope not—and does the Chief Secretary agree that raiding the capital budget is no way to find efficiency savings?
Mr Gauke
The switch from capital to resource was actually made at the request of the health service and the Department of Health. In terms of finding efficiencies in the NHS, and indeed in the public sector as a whole, it is important that we deliver sustainable efficiencies, embed a culture of efficiency, and ensure that we get value for money for the taxpayer.
Sir Gerald Howarth (Aldershot) (Con)
While I welcome this Government’s commitment to health, may I invite my right hon. Friend to take a leaf out of President Trump’s book and increase defence expenditure by 10%, funded from the bloated overseas aid budget?
Mr Speaker
It is quite a naughty idea, not because of its merits or demerits but because it has nothing to do with the Department of Health budget, as the hon. Member for Wellingborough (Mr Bone) is perfectly well aware. However, the Minister is a dextrous fellow and I am sure he can answer in an orderly way.
Mr Gauke
Although, as you say, Mr Speaker, there may perhaps have been a slightly tenuous link with the question, it was still a predictable question from my hon. Friend the Member for Aldershot (Sir Gerald Howarth). We are delivering on the 2%-plus expenditure commitment on defence, and we are increasing defence spending in real terms. Again, it is important that we have a strong economy so that we can properly fund our defence.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The shocking revelation that NHS Shared Business Services Ltd misplaced more than 500,000 pieces of sensitive medical data is a direct result of a health service that is being squeezed by the Chancellor’s purse strings. The Tory Government are clearly putting patient safety at risk through lack of resourcing and a targeted savings drive. Will the Chancellor immediately reassess the situation and the level of NHS funding?
Mr Philip Hollobone (Kettering) (Con)
Will the Chief Secretary confirm that record amounts of money are being spent on the NHS, that record numbers of patients are being treated and that he will give clear incentives to local authorities and health services to join up the delivery of NHS and social care?
Mr Gauke
My hon. Friend raises an important point. He is absolutely correct about the resources that we are putting in, but if we want to improve the quality of healthcare, particularly in the context of social care, it is also important that there is greater integration. That is why we announced the better care fund, which is making an important contribution to supporting social care and improving integration.
Peter Dowd (Bootle) (Lab)
The Chair of the Treasury Select Committee is absolutely spot on. If the Chancellor does discuss with the Department of Health any increase in levels of funding, will he point the Health Secretary in the direction of the Public Accounts Committee report, which says that he should stop “plundering” NHS funds? In particular, it asks him to stop his “repeated raids” on NHS capital funds, with £950 million having been taken out of £4.5 billion.
Mr Gauke
First, may I congratulate the hon. Gentleman on his promotion to the post of shadow Chief Secretary? He is my eighth shadow as a Treasury Minister, so I look forward to sparring with him over the weeks ahead.
Let me repeat what I said earlier: the agreement on the budget settlement for the NHS and the balance between resource spending and capital spending was reached with the Department of Health. Indeed, that switch towards more on resource was very much pushed by the Department of Health.
Peter Dowd
So I am the eighth shadow Minister,
“How very promiscuous of you”,
as I said in my tweet to the Chief Secretary.
Some 4,000 urgent operations have been cancelled, 18,000 people a week waited on trolleys in January, 3,000 community pharmacies are going to be lost and £4.6 billion has been cut from social care. When those funding levels are discussed with the Department of Health, will he tell his colleague that he should be caring for the NHS, not giving it a lethal injection?
Mr Gauke
If the Labour party’s policy could move beyond the level of placard design, that might help. Let me be clear: we are putting more money into the NHS and it is providing more support and help to people than ever before. I have listed some of the achievements since 2010. This Government remain committed to the NHS, which is why it has been a priority in our public spending plans for the past seven years.
Mr Speaker
We do need to speed up in terms both of questions and of answers.
Simon Danczuk (Rochdale) (Ind)
The Chief Secretary to the Treasury (Mr David Gauke)
The Treasury regularly discusses social care funding with the Department of Health and the Department for Communities and Local Government. We have introduced a new social care precept and additional grant funding for social care. Taken together, those provide an additional £7.6 billion of dedicated funding for social care over the four years of the current settlement. That means that councils can afford to increase spending on social care every year.
Simon Danczuk
The lack of funding for social care is having a devastating impact on people requiring care, carers and workers themselves. The 3% levy raises only £2.8 million for Rochdale. That does not even cover the cost of increasing the minimum wage for care workers. Does the Minister accept that?
Mr Gauke
As I say, it is not just about the council tax precept. We also have the better care fund coming in. We should also accept that this is not just about money. There is very variable performance around the country. It is worth pointing out that 50% of the delayed discharges attributed to social care take place in only 24 local authority areas.
Mr Andrew Turner (Isle of Wight) (Con)
Some areas, including the island, have taken the difficult decision to increase council tax by 3% to protect social care. Would the Chief Secretary to the Treasury consider finding ways of ensuring that councils have done all that they can to help themselves as well as ensuring that any Government support is made available now?
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
The Chief Secretary to the Treasury (Mr David Gauke)
The Government have focused on taking forward city deals with Edinburgh, Stirling and Tay cities and we are looking to agree city deals with all of Scotland’s great cities. The Government have also published their Green Paper on the industrial strategy and are engaging closely with the Scottish Government and local partners on how the strategy can work for all parts of the United Kingdom.
Corri Wilson
We heard earlier about investment in Yorkshire. Would the Chief Secretary to the Treasury acknowledge that the Ayrshire growth deal would provide a much-needed economic boost to the area and reflect the Government’s promise to drive growth throughout the whole country, as outlined in their recently published industrial strategy?
Maria Caulfield (Lewes) (Con)
Rehman Chishti (Gillingham and Rainham) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
The Government are taking forward plans for the lower Thames crossing and major road upgrades, such as at junction 5 on the M2. We are also establishing a Thames estuary 2050 growth commission, which will set out a vision for development in the area.
John McDonnell (Hayes and Harlington) (Lab)
Last week, the Government snuck out a statement on regulations denying 150,000 disabled people access to personal independence payments awarded by the upper tribunal. That was brutal. Last year, the previous Chancellor absorbed the costs when the Government were forced to halt cuts to personal independence payments to disabled people. In this case, are those disabled people being denied benefits because the Chancellor has refused to absorb the costs resulting from the upper tribunal decision?
Mrs Sheryll Murray (South East Cornwall) (Con)
Mr Gauke
My hon. Friend makes an important point, and road safety is a key priority for the £15.2 billion road investment strategy. In November 2016 we announced an additional £175 million to improve the 50 most dangerous roads in the country. As she will be aware, Cornwall has received £78 million from the local growth fund, including for investment in local roads.
Louise Haigh (Sheffield, Heeley) (Lab)
Our biggest businesses are already benefiting significantly from the cut to corporation tax, yet today we find that profit-making Caffè Nero has paid zero in corporation tax. Given that the Chancellor is trying to balance the Budget on the backs of the disabled and the ill, what more will he do to stop profit-making companies avoiding tax on his watch?
Adam Afriyie (Windsor) (Con)
I very much welcome this Government’s healthy commitment to scientific spending over several years, but it seems that our business investment in research is below the OECD average. May I urge the Chancellor to examine measures that will increase private company business expenditure on research?
Mr Gauke
As the Chancellor announced at the autumn statement, the Government are significantly increasing investment in research and development, rising to an extra £2 billion a year by 2020-21. We have also made the R and D tax credit regime much more generous. We want to ensure that the UK remains an attractive place for business to invest in innovative research.
Ms Angela Eagle (Wallasey) (Lab)
Given the shameful neglect of social care spending in the autumn statement and straws in the wind about how that is going to be put right in the Budget, will the Chancellor take account of the fact that authorities such as ours in Wirral are having to deal with £45 million-worth of pressure due to the number of our older people who are needing help, and that a 3% increase in council tax will deliver us only £22 million?
ECOFIN
David Gauke Excerpts(7 years, 2 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 21 February 2017. EU Finance Ministers are due to discuss the following items:
Early morning session
Ministers will be briefed on the outcomes of the 20 February meeting of the Eurogroup, and the European Commission will present an update on the current economic situation following the publication of the Commission’s winter forecasts on 13 February. Ministers are also expected to discuss points of clarification in relation to the intergovernmental agreement on the single resolution fund.
Anti-tax avoidance directive
Ministers will be invited to reach a general approach to the second anti-tax avoidance directive (ATAD2).
Current financial services legislative proposals
The Council presidency will provide an update on current legislative proposals in the field of financial services.
Criteria and process leading to the establishment of the EU list of non-co-operative jurisdictions for tax purposes
Council will take stock of further work that has taken place following the Council conclusions agreed at ECOFIN on 8 November 2016.
Preparation of the G20 meeting of Finance Ministers and central bank governors on 17 and 18 March 2017 in Baden-Baden
Ministers will be asked to mandate the Economic and Finance Committee (EFC) to finalise the EU terms of reference for the next G20 meeting of Finance Ministers and central bank governors.
Discharge to be given to the Commission in respect of the implementation of the budget for 2015
On the basis of a report from the European Court of Auditors, Ministers will be asked to approve a recommendation—to be forwarded to the European Parliament.
Budget guidelines for 2018
Ministers will be asked to adopt Council conclusions on the guidelines for the 2018 budget, which will serve as a point of reference in the forthcoming budgetary cycle.
European defence fund
The Commission will provide information on its European defence action plan, focusing in particular on the proposed launch of a European defence fund.
[HCWS484]
European Union Finances Statement
David Gauke Excerpts(7 years, 3 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
I am today laying before Parliament, the “European Union Finances 2016: statement on the 2016 EU Budget and measures to counter fraud and financial mismanagement” (Cmd 9400). This is a routine annual publication. It is the thirty sixth in the series. The statement gives details of revenue and expenditure in the 2016 European Union (EU) Budget, recent developments in EU financial management and measures to counter fraud against the EU Budget. It also includes a chapter and annex on the use of EU funds in the UK while we remain a member state.
[HCWS476]
National Infrastructure Commission Reports: 5G/Cambridge-Milton Keynes-Oxford Corridor
David Gauke Excerpts(7 years, 3 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
I am today depositing in the Libraries of both Houses two recent National Infrastructure Commission (NIC) reports, in accordance with the National Infrastructure Commission charter.
“Connected Future”, published on 14 December, sets out what the UK needs to do to become a world leader in 5G networks. The Government will consider the recommendations carefully and respond at Budget 2017. The Government have already taken steps to ensure that Britain is 5G ready and the Chancellor recently announced a £1 billion investment which will support 5G trials and investment in fibre networks.
“Cambridge-Milton Keynes-Oxford Interim Report”, published on 16 November, sets out immediate investment priorities and challenges to ensure a joined-up strategy for the area bringing together planning, housing and transport. The Government welcomed this interim report at autumn statement and committed to invest £137 million to support the Commission’s transport recommendations on the Oxford to Cambridge expressway, and East West Rail. The Government also welcomed the NIC’s work looking at a range of delivery models for housing and transport in the corridor, including development corporations.
The National Infrastructure Commission was set up in October 2015, to provide expert independent analysis of the long-term infrastructure needs of the country. As well as in-depth reports into specific issues, it produces a once-in-a-Parliament national infrastructure assessment (NIA) setting out a long-term vision for UK infrastructure.
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Charter for Budget Responsibility
David Gauke Excerpts(7 years, 3 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
What the British people want is a stable and successful economy—one that means jobs, opportunity and a high quality of life. That is what this Government are delivering, and what we will continue to deliver, because, unlike the Opposition parties, we are not ignoring economic realities, but facing up to them. We are not paying lip service to our responsibilities, but shouldering them, and we are not pretending that every problem can be solved by spending more, borrowing more or taxing more. We are restoring our public finances to health and investing sensibly and in a well-targeted way in the future success of this country.
That is how we have turned our economy around. Not only are we forecast to achieve faster growth than any other G7 economy last year, with near record employment and unemployment at its lowest rate in more than a decade, but, at the same time, we have made great progress on getting to grips with the public purse, cutting our deficit from its post-war high of 10.1% in 2010 to 4% last year, and borrowing £1 in every £10 we have spent, not the £1 in every £4 that we saw under the last Labour Government. As my right hon. Friend the Chancellor has pointed out, the recent fiscal sustainability report from the OBR reminds us of the action that we must continue to take to address our deficit.
The fiscal rules that we are looking at today strike the right balance for the challenges and opportunities that we face. They include a credible plan to return our public finances to balance; enough headroom to guard against economic shocks; and scope to invest in improving productivity. The structural deficit must be below 2% of GDP by the end of this Parliament, which sets the right course to ensure that the deficit is eliminated altogether next Parliament, and that debt will be falling by the end of this Parliament. The new medium-term welfare cap is an important component of the plan. A medium-term cap rather than an annual one allows us to ensure that we can control welfare spending without needing to make short-term changes to react to fluctuations in the forecast for spending.
To reiterate: the Government will deliver the overall total of welfare savings already identified, but we have no plans to introduce further welfare savings in this Parliament beyond those already announced. With welfare accounting for around a quarter of all our spending, the right course of action is not to refuse to consider any kind of control, but to ensure that our expenditure is stable and sustainable. We have already announced all the measures that we will take in this Parliament for savings in this area.
This then is a credible fiscal plan for three reasons: first, because it means tackling the deficit and bringing our public finances into balance, the importance of which continues to be completely overlooked by the Opposition party; secondly, because it sets feasible targets—in fact the OBR forecasts that we will meet our aims for this Parliament two years early—and, thirdly, because it also gives us the space to react to any short-term fluctuations in our economy in this period of adjustment. It also gives us the scope to address the long-term structural changes and invest in our future success. I refer specifically to the additional £23 billion that we will be investing in our national productivity—borrowing to fund improvements for businesses and families alike in our infrastructure, research and development and housing.
The charter enshrines our commitment to fiscal restraint. It reflects our refusal to allow public spending to sky rocket as it did under Labour; our determination not to put ourselves again in such a vulnerable position as Labour did in running up the largest structural deficit of any G7 country ahead of the great recession; our rejection of the reckless economics that the Labour party continues to favour, which is one of blank cheques, unfunded spending commitments and magic money trees. Is it not time that Labour finally started learning from its mistakes and caring about the economic security that the people of this country deserve? It clearly does not have a credible fiscal plan of its own. It clearly does not have much interest in the matter, because not a single Labour Back Bencher even attended this debate until the 67th minute of it. Let me invite them to join us in voting for a plan that is not only in the interests of working people today, but in the interests of their children and grandchildren who follow. I commend this charter to the House.
Question put.
Office for Budget Responsibility: Fiscal Sustainability Report 2017
David Gauke Excerpts(7 years, 4 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
The Office for Budget Responsibility (OBR) has today published its sixth fiscal sustainability report (FSR), fulfilling its legal obligation to publish an analysis of the sustainability of the long-term public finances and an assessment of the public sector balance sheet at least once every two years. The report was laid before Parliament earlier today and copies are available in the Vote Office and Printed Paper Office.
The FSR provides us with insight into how long-term economic and demographic trends, including our ageing population, are likely to impact the public finances over the next half century, without mitigating action. These long run projections are based on OBR assumptions of unchanged policy beyond the medium-term horizon. They are therefore not the OBR’s predictions of what will happen—but an illustrative projection of what may happen, if the Government did not take action.
In producing these projections the OBR must make stylised assumptions, and as they note, many of these assumptions are subject to a high degree of uncertainty. The results are highly sensitive to these assumptions, and this is particularly the case over the 50 year horizon in the FSR. For example, the OBR project that debt to GDP by 2066-67 could be between 40% of GDP higher or 101% of GDP lower than the central projection, depending on which assumptions are used to underpin projected growth in healthcare spending.
Their findings must be interpreted in this context. However, the FSR’s underlying conclusion is clear: fiscal sustainability will come under increasing pressure from both demographic change and the need to improve efficiency and productivity over the next 50 years. It is important that action continues to be taken to address demographic pressures and improve efficiency, particularly in the health sector.
While the FSR’s fundamental message is unchanged from previous reports, changes to the assumptions underpinning this year’s projections drive higher projected spending than in previous reports. Higher projected spending, alongside higher initial borrowing and debt, feeds through, in turn, to higher projected borrowing and debt by the end of the projections.
In terms of specifics, the FSR projects that spending on the state pension will rise from 5.0% of GDP in 2021-22 to 7.1% of GDP by 2066-67, putting significant pressure on taxpayers. To ensure that the state pension remains sustainable and fair across generations, the Government are carrying out their first review of state pension age. The Government will consider all the evidence—including an independent report by John Cridland—before formally responding by publishing their review by 7 May 2017.
The FSR also projects that health spending will rise from 6.9% of GDP in 2021-22 to 12.6% of GDP in 2066-67, due to the inclusion of non-demographic cost pressures in the OBR’s analysis for the first time. As the OBR note, there is significant uncertainty around this long-term projection, and it does not take into account the impact of any Government action to address projected cost pressures in future Parliaments. We are taking steps over this Parliament to improve the efficiency of the NHS. This includes funding for the NHS’s five year forward view plan, which sets out its vision for a sustainable long-term future for the NHS, and its proposals for reforms to help it meet future challenges. Decisions on funding in the longer term will be for future Governments to take.
Overall, the FSR demonstrates that the situation would be far graver without the significant progress made by this Government since 2010. The deficit the Government inherited in 2010 stood at 10% of GDP. We have now brought down the deficit by almost two-thirds of GDP and, by 2021-22, the OBR forecast that borrowing will have fallen to its lowest level in two decades. In 2018-19, the OBR forecast debt to fall as a share of GDP for the first time since 2000-01. The magnitude of the long-term fiscal sustainability challenge faced by the UK is similar to many other advanced economies, according to international institutions. Debt is projected to reach 141% of GDP in the US by 2046, and could reach over 180% of GDP in Germany by 2060. This compares to about 125% of GDP in the UK by 2046-47 and rising to about 200% of GDP by 2060-61 as projected in this year’s FSR.
Nonetheless, despite significant progress made to repair the public finances since 2010, today’s OBR projections suggest that, without further policy change, debt will reach over 234% of GDP by 2066-67 and continue on its upwards trajectory thereafter, driven by increased age-related spending.
Clearly, this would not be a responsible course of action. This provides the motivation for the fiscal framework that the Government set out at autumn statement 2016. We must continue to reduce the deficit and get debt falling over the medium term. And we must bring the public finances to balance at the earliest possible date in the next Parliament. The debate and vote on the new fiscal framework will take place next week, enshrining these commitments to fiscal responsibility into law.
As we look towards the next Parliament, ensuring that the public finances remain sustainable will continue to be one of this Government’s key priorities. In consideration of this fact, at autumn statement 2016, the Chancellor announced his intention to review public spending priorities and other commitments for the next Parliament in light of the evolving fiscal position at the next spending review. Fiscal discipline today will help us tackle any future economic shocks and reduce the burden of debt on future generations. Increasing life-expectancies and other economic trends will continue to pose challenges for the public finances. In response, we will continue to control public spending and grow the potential of the UK economy, including by targeting increased investment in infrastructure to increase the UK’s long run productivity challenge.
The FSR is yet another important example of the credibility and transparency that the independent OBR brings to the public finances, as recognised recently by the IMF’s fiscal transparency evaluation.
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Oral Answers to Questions
David Gauke Excerpts(7 years, 4 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
The Chief Secretary to the Treasury (Mr David Gauke)
We have regular discussions with Cabinet colleagues on how the Government can boost growth and productivity across Scotland and the UK. The Government are discussing city deals for Edinburgh and Stirling, and we are looking forward to receiving proposals from the Tay cities. The Government are focused on taking those deals forward as we look to agree city deals for all of Scotland’s great cities.
Patricia Gibson
Would the Chief Secretary to the Treasury agree that the Ayrshire growth deal would generate investment and create the economic conditions to achieve a step change throughout Ayrshire, an area of huge potential? Will he commit today to working actively and constructively with the four Ayrshire MPs, the three Ayrshire local authorities and the Scottish Government to support the deal, to the benefit of the whole county of Ayrshire?
Mr Gauke
Up to this point, growth deals have been city growth deals and, by definition, have focused on cities. As I said earlier, we have made a lot of progress on all the Scottish cities. Of course, it is open to the Scottish Government to take forward projects to enable growth in the county of Ayrshire, if they wish to do so.
Craig Tracey (North Warwickshire) (Con)
Nusrat Ghani (Wealden) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
As announced at the autumn statement, the Government are significantly increasing investment in research and development, which is rising by an extra £2 billion a year by 2020-21. That is the largest increase over a Parliament since records began in 1979. This includes an industrial strategy challenge fund, which will support collaboration between businesses and the UK’s world-leading science base. That will ensure that the UK remains an attractive place for business to invest in innovative research, and that the next generation of discoveries are made, developed and produced in the UK.
Nusrat Ghani
I thank the Minister for his answer. Scientifica, one of the largest employers in my constituency, won both business of the year and export business of the year for 2016 at the British Chambers of Commerce’s annual awards. I will be incredibly proud to join Scientifica when it opens the London stock exchange in March. Will he join me in congratulating Scientifica, and will he pledge to continue supporting such businesses, which export the best of British scientific innovation, collaboration and enterprise to the rest of the world?
Mr Gauke
I am delighted to join my hon. Friend in congratulating Scientifica, and I am happy to make that pledge. At the spending review, we committed to a £175 million reinvestment in UK Trade & Investment, now part of the Department for International Trade, to drive UK exports. We remain committed to ensuring that UK exporters receive world-class support. Indeed, as the Prime Minister will make clear today, maintaining the UK as one of the best places in the world for science and innovation is a priority for us.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
On Friday, I visited Wirecard, an innovative financial technology company in the emerging payments sector; it is based in Newcastle. It is concerned that leaving the European single market, and in particular the passporting rights, will diminish investment in fintech, an area in which this country leads, and which is growing in Newcastle and the north-east. What reassurance will the Minister give Wirecard?
Mr Gauke
As the hon. Lady will be aware, the Prime Minister will have just begun making a speech on this matter, and my right hon. Friend the Secretary of State for Exiting the European Union will make a statement to the House later. Let me just say that the UK is in a very strong position on fintech, and on ensuring that this successful sector is a priority. Indeed, the Minister for Trade and Investment, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), led a delegation of 33 companies to India, where the focus was, among other things, on this sector and promoting the best of British businesses. We will continue to ensure that the UK remains a strong place for the sector.
Alex Chalk (Cheltenham) (Con)
Will my right hon. Friend join me in welcoming the fact that Cheltenham’s GCHQ cyber-accelerator is now up and running? Does he agree that that key element of the Government’s £1.9 billion national cyber-security programme will allow start-ups to gain access to GCHQ’s world-beating personnel and digital expertise to bring jobs and opportunity to Gloucestershire?
Danny Kinahan (South Antrim) (UUP)
What discussions have taken place in Northern Ireland with the Department for Business, Energy and Industrial Strategy to ensure that catapult projects will happen in Northern Ireland just as much as in the rest of the UK, to help our science and business development?
Mr Gauke
We are, of course, determined to ensure that all of the UK is a good place for these businesses to develop, and to encourage the development of technology and businesses that are based on it. The future of the United Kingdom has to be as a highly skilled, technologically advanced, outward-looking country. We have engaged with all the devolved Administrations to further that aim.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
We Labour Members believe that encouraging investment is essential to making our economy more productive, and we recognise that that will be especially important post Brexit. Does the Treasury have a genuine indicator of how foreign direct investment has been affected by the referendum result, given that it was recently revealed that the Department for International Trade’s figures incorrectly include decisions taken before the vote for Brexit?
Mr Gauke
We are at an early stage, in terms of the impact on foreign direct investment. On the level of business investment since the referendum, the numbers have held up pretty strongly, although, as I say, it is early days and early data. The hon. Gentleman says he welcomes business investment in this country; he should listen to some of the things his party leadership is saying, which would do nothing but drive business out of the United Kingdom.
Chris Davies (Brecon and Radnorshire) (Con)
David Mackintosh (Northampton South) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
At the autumn statement, the Government backed recommendations made by the National Infrastructure Commission to invest £140 million in the Cambridge/Milton Keynes/Oxford corridor. That includes development funding for the expressway road scheme and £100 million to accelerate construction of the east-west rail line. The Government support the commission’s ongoing work, looking at a range of delivery models for housing and transport in the corridor.
David Mackintosh
How does my right hon. Friend envisage that benefiting the economy in Northamptonshire?
Mr Gauke
It is worth pointing out that in the terms of reference for the National Infrastructure Commission’s report the Government noted that the area contained four of the UK’s fastest growing and most productive places—Oxford, Cambridge, Milton Keynes and Northampton. We agree with the commission that transport investment is key to maximising growth potential in the area. We will invest in the east-west rail line and the expressway, which will better connect parts of the region with one another and with the rest of the country, supporting growth and jobs. The commission will issue its final report later this year, including work on delivery options for housing and transport, and we will carefully consider those recommendations.
Alex Cunningham (Stockton North) (Lab)
Mr Stewart Jackson (Peterborough) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
Progress has been made since 2010, with housing starts now at an eight-year high. However, the scale of the challenge requires us to go further. That was why my right hon. Friend the Chancellor announced in the autumn statement that the Government will invest £5.3 billion in housing. This includes investing £2.3 billion in the new housing infrastructure fund, which will deliver up to 100,000 homes in high-demand areas, an additional £1.4 billion to deliver 40,000 new affordable homes, and £1.7 billion to deliver a programme of accelerated construction on public land.
Mr Jackson
Does my right hon. Friend agree that supporting the off-site construction of new homes, as we have been doing in Peterborough, is one important way to get more good-quality homes built quickly?
Mr Gauke
I do agree that we should explore the potential of modern methods of construction, including off-site construction. We should also ensure that the Government support new entrants into the market, particularly SME builders. The accelerated construction programme announced by my right hon. Friend the Communities and Local Government Secretary in October, which aims to speed up the build-out of homes on public land, will include an element of off-site construction. The Department for Communities and Local Government is actively considering ways of encouraging diversification in the house building market.
Several hon. Members rose—
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
As someone who chairs a national charity based in Peterborough, and also as the Member of Parliament for Huddersfield, may I back the people who have been saying not only that we need a more diverse housing market and better provision, but that the future must be lower-cost housing and off-site construction, and to a highly sustainable standard?
Kelly Tolhurst (Rochester and Strood) (Con)
In my constituency, we face high levels of proposed new housing. Can the Minister assure me that that will be matched with increased investment in our local infrastructure?
Mr Gauke
I draw my hon. Friend’s attention to the housing infrastructure fund, which demonstrates the Government’s determination to ensure that when new housing is built in areas of high demand, we also deliver the infrastructure to support that housing. That will have a beneficial effect by getting more houses built, and also ensuring that the appropriate infrastructure is in place.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
For many in my constituency, home ownership is but a pipe dream, with more people renting privately than owning their own homes. What steps is the Minister considering to encourage private landlords at least to offer longer tenancies for these very many private renters in London and in Hackney South?
Mr Gauke
We look to put in place measures to support all sectors and all types of housing. The hon. Lady is absolutely right to say that private rented housing is a really important sector. However, I am sure that she agrees that we have to be careful about some of the proposals on rent controls that float around, which would be damaging for the private rented sector.
Fiona Mactaggart (Slough) (Lab)
The Chief Secretary to the Treasury (Mr David Gauke)
The Government and the relevant agency recognise the importance of the employees who work in this sector, but it is necessary to have terms and conditions that reflect the modern situation that applies across the economy as a whole.
Mrs Flick Drummond (Portsmouth South) (Con)
Mr Gauke
I can say to my hon. Friend that the very purpose of the national productivity investment fund is to support economic growth across all regions of the country. Further details specifying how and where the fund will be invested will be set out by the relevant Departments and agencies in due course. The Solent will not be forgotten, and we are taking action to improve rail services, with a new franchise expected to deliver more services and quicker journey times on South West Trains.
Louise Haigh (Sheffield, Heeley) (Lab)
It is simply not good enough to throw Concentrix under the bus. Today’s National Audit Office report finds that HMRC was at fault in the writing of the contract, in failing to monitor it, and in intervening to make things worse after a poor performance in summer 2015. Who at HMRC will be held accountable for the gross failings of this contract from beginning to end?
Ben Howlett (Bath) (Con)
Mr Gauke
The Government are committed to supporting the skills we need to deliver our national infrastructure. In the transport infrastructure skills strategy for 2016, we committed to creating 30,000 road and rail apprenticeships by the end of the Parliament. In addition, the Department for Business, Energy and Industrial Strategy is investing £40 million in the national college for high-speed rail, with additional funding for the college coming from local government and industry. Finally, Heathrow airport has committed to double the number of its apprentices to 10,000 by the time the new third runway is operational.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Changes to the rateable value for solar panels for organisations mean that business rates for organisations with solar rooftop installations, such as schools, hospitals and SMEs, could increase dramatically—six to eightfold—in April. Do the Government recognise the huge damage that this will cause to organisations that have installed panels in good faith, as well as the solar panel industry?
Dr James Davies (Vale of Clwyd) (Con)
Mr Gauke
I can confirm to my hon. Friend that Treasury Ministers have regular discussions with ministerial colleagues about how the Government can boost growth and productivity across Wales and the UK. At autumn statement 2016, the Government confirmed that the door was still open for a growth deal with north Wales, and we are committed to negotiating a city deal for the Swansea Bay city region in south Wales. I look forward to receiving proposals from partners in the north Wales region over the coming months.
Mr Speaker
The right hon. Gentleman is always very well briefed for these topical questions—reading out the screed! Very good.
John Cryer (Leyton and Wanstead) (Lab)
Given the Chief Secretary’s earlier comments about attempts to stimulate house building, can he guarantee that at the end of this Parliament the supply of rented homes will be larger than it was at the beginning?
Andrew Selous (South West Bedfordshire) (Con)
There are currently 87,000 ultra-low emission vehicles on our roads, but the Committee on Climate Change says that we need 1.7 million by 2020. What more can the Treasury do to help us to reach that challenging target?
Equality: Autumn Statement
David Gauke Excerpts(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Mr David Gauke)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“affirms that introducing tax-free childcare, increasing the national living wage, increasing investment in affordable housing, reducing the universal credit taper, boosting investment in schools to create more good school places and taking 1.3 million individuals out of paying income tax so far this Parliament will benefit all genders and races; welcomes the fact that there are more women in work than ever before; further welcomes the Government’s publication of distributional analysis along with the Autumn Statement 2016; and welcomes the action the Government is taking to develop a strong economy that works for everyone, regardless of their background.”
It is a great pleasure to move an amendment in the name of a female Prime Minister. It is the Government’s foremost aim to make sure that this is a country that works for everyone in our society, wherever they are from, and whatever their gender, race, age or background. To deliver that objective, we need to build a strong and stable economy by boosting productivity, creating jobs, and bringing our public finances under control. That is how we will be in the best position to create a sustained rise in living standards for all British people. Our entire economic approach is based on a determination to make people better off now and in future, in all parts of the UK, and across the full breadth of our society. That is why we reject the assumptions in the motion and believe instead that the plans that we have set out will deliver a stronger economy that works for everyone.
I want to reflect on the measures that we have taken to strengthen our economy in this way, because people, regardless of their race or gender will benefit from our work to restore the economy to long-term health, which begins with bringing our public finances under control. With UK debt soon reaching a 50-year high of 90.2% of GDP, we must pursue a credible fiscal path to make it fall. Over the past six years, we have cut the deficit by almost two thirds to 4% of GDP, and we confirmed in the recent autumn statement that we will deliver a surplus as soon as possible in the next Parliament, while in the interim bringing cyclically adjusted borrowing below 2% by the end of Parliament, and getting public sector net debt, as a share of GDP, falling in this Parliament too.
People across our society benefit from the business-led recovery that has been at the heart of our economic approach. We have made sure that Britain is open for business with our competitive tax regime, by cutting over £10 billion-worth of red tape, and with our extensive investment in infrastructure, skills and research. The autumn statement took that further with a whole host of measures, including the new national productivity investment fund of £23 billion over the next five years. It is as a result of such measures that over 1 million new businesses have started since 2010, taking us up to a record 5.5 million small businesses at the beginning of the year. By the way, I am pleased to say that about 1.2 million small and medium-sized enterprises in the UK are majority women-led—more than ever before—and they contribute about £115 billion to the economy in total.
Jess Phillips (Birmingham, Yardley) (Lab)
With regard to the infrastructure spending, which the Minister heralds as part of the recovery, how many of the jobs that will be created by that will go to women?
Jess Phillips
I will make a more substantive speech about that shortly, but currently in the construction industry 1% of jobs go to women—1%. I ask the Minister again: what percentage of the jobs created by infrastructure spending does he think will go to women?
Mr Gauke
There are now more women doing science, technology, engineering and maths A-level subjects than ever before, which will ensure that more of them go into such jobs. I am trying to understand the hon. Lady’s point. Is she saying that we should not be spending money on infrastructure because that will have a disproportionate effect, favouring men? The purpose of infrastructure spending is to improve our infrastructure in order to improve our productivity—productivity that helps men and women. That is why we are doing that.
Jess Phillips
I am absolutely not saying that we should not spend money on infrastructure. What are the Government going to do to make sure that all the infrastructure spending set out in the autumn statement is shared equally between men’s and women’s jobs?
David T. C. Davies
I am grateful. My right hon. Friend will surely be aware that Alun Griffiths (Contractors) based in my constituency, which builds motorways, has received a parliamentary award for its commitment to championing women in the construction industry. Perhaps we should look carefully at tenders and make sure that such companies are considered.
Mr Gauke
There is a very important point to be made about how we encourage more women to become involved in engineering and construction. Increasing numbers of employers are taking more steps to do that—Crossrail is another example of where that is happening. The hon. Member for Birmingham, Yardley (Jess Phillips) seems to be objecting to infrastructure spending, which is a strange position—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I can hear the hon. Lady—[Interruption]—and she should not be speaking so loudly when she is sitting down, especially when I am speaking. She will have an opportunity to speak soon.
Mr Gauke
Thank you, Madam Deputy Speaker.
The global entrepreneurship and development index has ranked Britain as the best place in Europe for female entrepreneurs, which I am sure everyone in this House will welcome and want to see us build on. Our start-up loans programme is helping entrepreneurs set up a business or become self-employed, not only through a loan, but through access to mentors. By the way, this programme issues a high proportion of loans to black and minority ethnic applicants: BME-led businesses represent 24% of start-up loan recipients, with almost 10,000 loans issued to BME recipients so far.
Our support for business goes hand in hand with the historically high employment rate that we have in the UK, with today’s numbers confirming that the unemployment rate remains at an 11-year low, with employment remaining at near record highs.
Suella Fernandes
Does my right hon. Friend agree that this Government are helping women at work by introducing shared parental leave, flexible working hours and 30 hours of free childcare? Those have been pioneered by this Government, putting women first in the workplace.
Mr Gauke
Indeed. My hon. Friend makes an important point. I will deal with those measures in a moment.
It is worth pointing out that the impressive employment numbers are accompanied by rising living standards, which last year grew at their fastest rate in 14 years and currently stand at their highest-ever level. The benefits of this affect people across our society, but the House should note the evidence of particular benefits for women and people from black and minority ethnic groups. The number of women in work has increased by over 1.2 million since 2010. Indeed, the rate went up more in the previous Parliament than in the previous three Parliaments combined. That comes as the gender pay gap falls to the lowest on record, more women are on the boards or leading businesses than ever before, and there are no longer any all-male boards in the FTSE 100.
James Cartlidge
On the subject of pay, I refer to the excellent intervention my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) made on the hon. Member for Rotherham (Sarah Champion), who spoke for the Opposition and said that the national living wage was not adequate. Is my right hon. Friend aware that the only international comparator for minimum wage is The Economist Big Mac index, which shows that the only country with a more generous living wage than this country is Luxembourg?
Mr Gauke
My hon. Friend makes an interesting point. I did not know that and I am grateful to him for drawing it to the attention of the House. The national living wage, which was brought in by this Government, disproportionately benefits women.
The number of black and minority ethnic women in work is at a near record high, with nearly 400,000 women finding work since 2010, and the employment rate for people in black and minority ethnic groups is at a record high of 64.5%, its highest level since records began in 2001.
Sarah Champion
I am grateful to the Minister for outlining what companies are doing to help women and the black, Asian and ethnic minorities. That is fabulous, but the debate is about what this Government are doing and how the Government’s austerity is adversely affecting those groups.
Mr Gauke
The logic of the hon. Lady’s point appears to be that there is no link between what happens in the economy and Government policies. What has been demonstrated over the past 10 years is that there is a very clear link between Government policies and what happens in the economy, and it is because of the policies of this—[Interruption.] We are the fastest-growing economy in the G7 at present, so it is going quite well, given that, among the major economies, we were the economy that was most affected by the crash in 2008. We have put in place an environment where we are creating jobs and seeing living standards improving, and that is happening across the economy for men and women.
It is, of course, right that we continue our work to address long-standing barriers to work for BME people, including through Baroness McGregor-Smith’s review, new support in schools, and new guidance for jobcentres and local partners. We have also set a public target to increase the proportion of apprenticeships started by people from BME backgrounds to 20% by 2020, building on good progress since 2010.
So we are strengthening our economy by managing stable public finances, backing our businesses and creating jobs. At the same time, we are helping people regardless of gender or race make their money go further in their day-to-day lives. That is why we confirmed in the autumn statement that we will raise the personal allowance to £12,500 by the end of the Parliament. By 2020, it will have increased by over 90% since 2010, taking millions of the lowest paid out of paying income tax, and representing a tax cut for over 13 million women by 2018, compared to 2015.
We have also introduced the national living wage at £7.20 an hour to help over a million people on the lowest wages, and we announced at the autumn statement that we would raise this to £7.50 in 2017. The national living wage is focused on hard-working, low-paid workers, regardless of their gender or race, and hon. Members should note that women are expected to account for around two thirds of those who will benefit from this, with people from BME communities expected to gain disproportionately.
Kirsty Blackman (Aberdeen North) (SNP)
I understand what the Minister is saying about the national living wage and the increase in the floor, but on the 40% tax rate, only 27% of higher rate taxpayers are women, so the changes to the 40% tax rate disproportionately benefit men, not women. What are the Government doing about that?
Mr Gauke
Income tax in Scotland will be a matter for the Scottish Government. I look forward to seeing what they will do.
From early 2017, we are also introducing tax-free childcare to help working parents with their childcare costs. Parents will be able to receive up to £2,000 childcare support per child each year. We are also helping around 3 million households by reducing the universal credit taper, which will further strengthen the incentives for people to increase the number of hours they work and to earn their way out of financial insecurity and welfare dependency.
That goes hand in hand with our sustained investment in the public services that families value. That includes our focus on quality schools, with the highest-ever recorded proportion of children being taught in good or outstanding schools; the pupil premium, which will be worth £2.5 billion this year alone and will support pupils from disadvantaged backgrounds; and an investment of £23 billion in the school estate over the next five years.
Our investment in infrastructure—from the roads and rails we travel on, to the homes we live in—will help all. The recent autumn statement contributed to tackling our long-standing challenge to deliver more homes, with a further £5.3 billion investment in housing, including a £2.3 billion housing infrastructure fund to deliver infrastructure to unlock up to 100,000 new homes, and £1.4 billion to deliver 40,000 new affordable homes.
So our economic plans are based on delivering an economy that works for everyone, and that means an economy that benefits all races and genders. I note the efforts to analyse the effect of the measures we have taken on women and BME groups. Hon. Members will be aware of the research of the House of Commons Library and the Women’s Budget Group, on which the premise of today’s motion is based, but a cautious approach should be taken when analysing specific impacts on that basis. Their findings should not be considered without first undertaking an honest reflection on the flaws inherent in their research methodologies. Let me provide a few examples.
First, the House of Commons Library analysis looks only at taxes and benefits. That means it overlooks key parts of the broader economic picture, which includes the benefits to women and people from BME groups of a strong economy and rising employment and earnings. It also fails to take into account the public services that families value, such as support for childcare, schools and health services.
Secondly, the analysis has been based on assumptions made about how income is shared in any given household. For example, it is not reasonable to assume that the measure to limit support as part of child tax credits and universal credit to the first two children for new claimants will overwhelmingly affect women merely because women are usually the nominal payee of child tax credits, as the House of Commons Library did in previous analysis. This not only treats women rather than children as the beneficiary of child tax credits, but assumes that other sources of income, such as earnings, are not shared within a household in response to benefit changes.
Thirdly, the analysis makes a comparison with a world where benefits were uprated between 2010 and 2015 by the retail prices index, but RPI is a flawed measure of inflation, and it lost its status as a national statistic in 2013. So there are a range of issues with the methods used to calculate these impacts, and the findings should be seen in that light.
It is, however, right that we assess carefully the effects of any new fiscal measures on groups across our society. We carefully consider the implications of all our measures for protected equality groups, which includes gender, race and disability. That is in line with not only our own guiding principle of a fairer society but our legal responsibilities under the Equality Act 2010. We publish information alongside the autumn statement about the impact of individual tax measures. We also publish a comprehensive distributional analysis to monitor how our decisions on tax, welfare and spending would support households on a range of different incomes.
Our commitment to fairness runs through everything we do. It goes to the heart of the economic approach we have taken since 2010. The Prime Minister could not have been clearer about her determination to keep taking every action to make this a country that works for everyone. That is why, for example, we have launched an audit to look into racial disparities in our public services, which stretches right across Government, covering every area from health to education, and childcare to welfare, employment, skills and justice.
This Government are fully resolved to make this a country that works for all races and genders. That is exactly what we are working to deliver through our work to build a stronger economy and to help people in their day-to-day lives, and that is what last month’s autumn statement continued to support.
Several hon. Members rose—
Multiannual Financial Framework
David Gauke Excerpts(7 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Mr David Gauke)
It is a great pleasure to serve under your chairmanship, Mr Hanson. Obviously the debate takes place within the context of the decision made by the British people to leave the European Union. The Government are clear that until the UK leaves the EU, it remains a full member and is subject to the same rights and responsibilities as other member states. This includes paying into the budget, participating in budgetary discussions and ensuring the best possible deal for UK and European taxpayers.
The Commission’s original proposals for the mid-term review were published in mid-September. The initial proposals involved some top-ups of more commitments for certain priorities and; some proposals for increasing the capacity of special instruments, and it recommended a new special instrument to be funded by so-called decommitments. It also recommended removing the cap on underspends that can be rolled over the future years.
The global ceilings for commitments and payments were maintained at the levels previously agreed in 2013 in the face of calls by the European Parliament to revise them. On the basis of no proposed changes to the MFF deal agreed in 2013, we, as part of the Council, began discussions on the substance. Since the Commission’s initial documents, the presidency has been progressing compromise proposals very quickly to expedite a deal. It has done an impressive job of addressing concerns, and we have worked hard with other member states to ensure the proposals are fully consistent with our central principle of budgetary restraint.
The proposals that went to the General Affairs Council on 15 November were even more limited in scope than the original proposals. For example, top-ups or spending increases to lower priority budget headings have now been financed largely through reallocations instead of using unallocated margins. The proposals for increasing special instruments capacity have been reduced from around €4 billion to €150 million per annum, with increases in just two special instruments. The new special instrument has been dropped. Caps on underspends that can be carried forward have been raised only marginally. Some ability to reshuffle funds between special instruments has been retained.
The proposals continue to maintain the global ceilings at their previously agreed levels, again meeting our clear priority, but they also now deliver the type of sensible flexibility that the Government have long argued for. Allowing underspends to be recycled and money to be moved more easily between years and headings will ensure that the Commission can be responsive to unforeseen events without consistently having to request further funds from member states. That is to be welcomed. We have ensured that the degree of financial exposure we signed up to for the MFF period of 2014-20 is unchanged from the original 2013 deal. On that basis the Government are content to allow the mid-term review to pass.
Alongside the mid-term review, the Commission also proposed a review of the financial regulations, which is a set of proposals to simplify financial rules governing EU expenditure. The proposals for the financial regulation review will be progressed to a slower timeframe than the main mid-term review discussions, and the Government support the high-level aims, which are: first, to simplify the rules governing EU expenditure; secondly, to increase its focus on delivering value for money; and thirdly, to allow it to respond flexibly to new priorities. As negotiations progress, the UK will continue to work with others to ensure that the focus remains on sound financial management of the EU budget.
I hope the Committee will pass today’s motion, which gives the Government a mandate to continue to work with like-minded member states in maintaining an overall mid-term review deal that delivers the Government’s priorities of allowing flexibility to respond to new priorities while continuing the overall MFF ceilings.
Documents linking the mid-term review and the 2017 annual budget are also referenced in the motion. The annual budget has already been scrutinised by the Committees of both Houses and I recently welcomed the opportunity to discuss those proposals with hon. Members in Committee. I can confirm that in mid-November we worked hard with like-minded member states in the European Council to advocate a sensible deal for taxpayers on the 2017 annual budget. Our hard work resulted in a budget for next year that is in line with the seven-year deal signed in 2013 and 6% lower than the annual budget deal for 2016.
Again, I hope the Committee will continue to support our overall approach to these matters of working with other like-minded member states to ensure budgetary restraint while we remain members of the European Union.
The Chair
We now move to questions, which we have until 10 am to consider. I remind Members that questions should be brief and that this time is for questions; there is an opportunity for debate when we have finished questions.
Rebecca Long Bailey (Salford and Eccles) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Hanson, and indeed to serve opposite the Minister, in my first European Committee. I have a few brief questions. I will put the first three together, because they are all on a similar theme, and it will give the Minister adequate time to respond.
First, as the Minister has said, revised proposals were put forward at the European Council meeting of 15 November. However, as far as I am aware, full details of the revised proposals are not publicly available. Can he outline exactly what has been removed from or revised in the documents, other than that which he has referred to already? Indeed, does he have a date by which the revised proposals will be available?
Secondly, as far as I am aware, the proposals include a doubling of funds for the flexibility instrument and emergency aid reserve, and a new EU crisis reserve. However, the Minister has stated that there will be no new special instruments. Will the crisis reserve fund therefore not go ahead, and, if not, how does the Commission plan to deal with any unforeseen needs in the next four years?
Lastly in this suite of questions, the Minister’s letter to the European Scrutiny Committee said that the commitments proposals for special instruments have been reduced from €3.4 billion to €129 million per annum. Clearly, that is a colossal change of direction, not a minor tweak, so can he confirm exactly what funding will be allocated to which special instruments?
Mr Gauke
I thank the hon. Lady for her questions, and I welcome her to her first debate in a European Committee; I confess that this is not my first. It is good to see her in her place.
First, the hon. Lady asked how the proposals have changed since the initial Commission documents. I refer her back to the points I outlined in my opening remarks, but let me be clear: to begin with, top-ups or spending increases to lower priority budget headings have now been financed largely with reallocations, instead of using unallocated margins. We obviously welcome that. Secondly, the proposals for increasing special instruments capacity have been reduced from around €4 billion to €150 million per annum, with increases in just two special instruments. The new special instrument has been dropped, and I will come back to that in a moment. Caps on underspends that can be carried forward have only been raised marginally. Some ability to reshuffle funds between special instruments has been retained.
I will make two observations in respect of where we have got to following the work undertaken by the presidency on these proposals. First, from the perspective of a member state advocating budgetary restraint, this is clearly a move in the right direction. I have attended the negotiations on annual budgets for the past three years, and the dynamic is striking: the Parliament generally calls for a relaxation of controls; the Council of Ministers, although it contains a range of views, generally takes a more budgetary disciplinarian approach; and the Commission tries to broker a position. It is clear that the presidency proposals supported our view pretty strongly.
Secondly, as I said earlier, we believe that there should be greater scope for flexibility to respond to particular needs. In that context, it is better that that is funded by reallocations as much as possible; it should not come back to member states for more money. Again, we welcome the approach that has been set out. The crisis fund has been dropped because of a consensus that it is not required.
The hon. Lady’s third question was about special instruments. No changes have been made to the MFF ceilings. Proposals for placing special instrument repayments above ceilings were dropped early on. The emergency aid reserve increase was reduced from €220 million to €20 million per annum. The flex instrument increase was reduced from €530 million to €130 million per annum, and, as I say, the crisis reserve was dropped.
The hon. Lady asked when the full details would be released. I have outlined the main important areas, and it is now a question of reaching a conclusion on the mid-term review. I am not sure that I can update her about the date at this point.
Rebecca Long Bailey
In the written statement on 18 November, the Government confirmed that the UK had in fact abstained on the revised MFF proposals. Given that the documents before us would increase spending on great projects such as the youth employment initiative and Horizon 2020, can the Minister explain the rationale for abstaining and the reasons for the Council’s expediting this matter?
Finally, the documents state that the negotiations for the next MFF will begin next year. The remainder of the current MFF takes us up to 2020, by which time we may have been out of the EU for up to a year, according to the Government’s current timetable. Will the Minister confirm what role the UK will play in negotiating the next MFF? What will happen to our allocation of funding for the remainder of this framework if we have severed ties before 2020?
Mr Gauke
On the mid-term review, as I have explained, the current proposal ensures that the payment ceilings that we signed up to over this seven-year deal are preserved. Therefore, we would not be looking to oppose the proposed mid-term review. The proposals are essentially neutral, with respect to what we would expect to pay over the MFF period, but we recognise that some commitments and functioning are likely to outlast our membership. On that basis, we took the view that the most appropriate approach for us to take is to abstain. We think that is the most constructive approach in the circumstances.
The hon. Lady asked what our approach to the future MFF will be. She may be familiar with the answer. This will play into our negotiations for Brexit. In those circumstances, the point at which the negotiations will start for the next MFF will be in 2018. We can assume that we will be in the middle of Brexit negotiations at that point, and our role in the next MFF will also be discussed in those negotiations; I think that the two are linked.
On the hon. Lady’s point about why the mid-term review was expedited, the presidency was keen to make progress and show that the budget proposals could be delivered quickly. That is something we welcome. Sometimes these matters can drag on for some time, but where it is possible to make quicker progress, we should do so. I hope that that is helpful.
George Kerevan (East Lothian) (SNP)
I am pleased to serve under your direction, Mr Hanson. The hon. Member for Salford and Eccles (Rebecca Long Bailey) has covered a lot of ground that I would have reservations on, but I agree with the specific issues relating to the 2017 budget.
First, can the Minister confirm that the UK abstained on the reconciliation discussions between the Council and Parliament, and can he justify that? It seems that has a direct relationship to spending next year. Secondly, in the reallocation of funds that led to the increase in spending for next year on immigration and immigration security, how did that impact on previous plans to spend on development and development aid within the budget? Thirdly, given the significant funds that are allocated and the increase in funds that will be allocated for pensions and remunerations to former commissioners, is the Minister satisfied with the rules of conduct governing former commissioners in taking paid remuneration after they leave the Commission?
Mr Gauke
First, on why we abstained on the annual budget, it is fair to say that the budget deal has a healthy payments margin of €9.8 billion—over €7 billion more than last year—and we welcomed that. We still believe that the EU could go further to cut lower priority spending from the budget. However, progress has been made, and the UK recognises that by not voting against the budget. We very often voted against the budget in the past because we felt that not enough had been done to deal with wasteful spending and that better value for money could be obtained for the European taxpayer. However, given that the payment margins were healthy this year, we decided not to vote against. More could have been done, but, in the circumstances, we decided to abstain.
On the reallocation of immigration expenditure, I can reassure the hon. Gentleman that the spending on aid was not impacted by increases in internal security. In fact, both have been enhanced.
Pensions remuneration is not a matter for budget discussions; it is a matter for the rules that the Commission applies to itself, so there were no particular discussions on that point. The UK and other member states have pointed out that the European Commission’s administration costs are higher than we would like. Indeed, there has been an increase in recent years, particularly in administration costs, although that has largely been put down to increased security costs, given recent events. The specific point that the hon. Gentleman raised was not part of our discussions.
Graham Stringer (Blackley and Broughton) (Lab)
The EU vanity project, Galileo, has massively overspent, not because of need but because of technical and budgeting incompetence. Will the Minister tell us how much extra that has cost the British Exchequer and what that extra expenditure has done to the original cost-benefit analysis of Galileo? Will he also tell us what action the Government took to try to keep that project within budget? If he is unable to answer now—I would not be totally surprised—will he write to Committee members with his response?
Mr Gauke
I thank the hon. Gentleman for his question. He has anticipated what I will say, which is that I will write to him with details. I will check, but as far as I understand it, the delays on Galileo have led to fewer commitments in this multiannual financial framework, rather than an increase. Of course, what has happened to the overall project costs is another matter, but my understanding is that it has led to fewer commitments over this period—I caveat that by saying that I will confirm it.
Graham Stringer
Finally, it is all very well looking at these budgets with under-expenditures, over-expenditures and changes in the budget, but will the Minister tell us what action the Government are taking, while we are still a member of the EU, to ensure that the EU has signed, audited accounts for all this money?
Mr Gauke
The hon. Gentleman takes me into the territory of another of the regular annual debates that we have in this room, or sometimes in the Chamber, on signing off EU accounts. Fraud and error levels fell again this year but are still too high and the issue that he raises continues to apply. We take the financial management of the EU budget very seriously. Taxpayers need to have confidence that their funds are being effectively managed and implemented at EU level. The Government have been robust in holding the Commission to account, including by regularly taking a strong public stand in voting against signing off the accounts. We continue to place pressure on the Commission to improve. We debate the issue regularly, and I look forward to the next time we do—I cannot remember exactly when that will be, but I am sure the hon. Gentleman will be there and will be able to make his points again on that.
The Chair
As there are no further questions, I thank Members for being very disciplined in asking questions and not straying into debate.
Motion made, and Question proposed,
That the Committee takes note of European Union Documents No. 12183/16 and Addendum 1, a Communication from the Commission to the European Parliament and the Council on the Mid-Term Review/Revision of the Multiannual Financial Framework 2014-2020: An EU budget focused on results (and Commission Staff Working Document); No. 12184/16, a Proposal for a Council Regulation amending Regulation (EU, Euratom) No 1311/2013 laying down the Multiannual Financial Framework for the years 2014-2020; No. 12185/16, a Proposal for an amendment of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management; No. 12186/16, a Proposal for a Decision of the European Parliament and of the Council amending Decision (EU) 2015/435 on the mobilisation of the Contingency Margin; No. 12187/16 and Addenda 1 to 2, a Proposal for a Regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No. 2012/2002, Regulations (EU) No. 1296/2013, (EU) No.1301/2013, (EU) No. 1303/2013, EU No. 1304/2013, (EU) No. 1305/2013, (EU) No.1306/2013, (EU) No. 1307/2013, (EU) No. 1308/2013, (EU) No. 1309/2013, (EU) No.1316/2013, (EU) No. 223/2014, (EU) No 283/2014, (EU) No. 652/2014 of the European Parliament and of the Council and Decision No. 541/2014/EU of the European Parliament and of the Council; No. 13147/16, Amending Letter No. 1 to the Draft General Budget 2017; No. 13377/16, a Proposed Decision on the mobilisation of the Contingency Margin in 2017; supports the Government’s efforts to work with other Member States to ensure budget discipline on proposals; welcomes the fact that the Mid-Term Review proposals respect the core commitments and payments ceilings agreed in 2013; further welcomes the additional flexibility proposed within the budget to increase the agility of the budget to respond to unforeseen events.—(Mr Gauke.)
Mr Gauke
I thank the European Scrutiny Committee for selecting these documents for debate, and I thank hon. Members for their contributions to our discussion. EU budget negotiations are a challenging process. That said, I am pleased to say that the proposals we have discussed are fully consistent with the multiannual financial framework and provide flexibility, which the Government welcome, to ensure that the Commission can deal with unforeseen needs and does not have to call on member states for additional contributions.
Let me briefly pick up some of the points that have been raised. I will not go into a full discussion of Brexit, which the House will have an opportunity to debate this afternoon, but let me make a point in response to the hon. Member for East Lothian. Given the referendum result, the context in which the UK is operating in the EU is clearly different. However, we continue to play an active part in EU business and have made that clear to other member states.
The Chancellor said in August that the UK
“will continue to have all of the rights, obligations and benefits that membership brings…up until the point we leave the EU.”
That includes seeking to secure maximum budgetary restraint and working alongside like-minded member states in the European Council to avoid higher than necessary cost to the UK and ensure maximum value for money in EU spending. Abstaining from budget votes is not unusual for the UK—we did so before the referendum as well. Were our interests threatened, we would be prepared to vote against and indeed block an agreement, but in this case our interests were not threatened. I attended the discussions on this issue last month, and that underlined the fact that the UK continues to participate fully in such debates.
As I have said, while the UK remains in the EU, we will continue to champion the need for an efficient EU budget that provides good value for the UK and European taxpayer, and press firmly to ensure fiscal discipline by restraining the budget to deliver the MFF deal. In so doing, we will work with like-minded allies to deliver the best possible EU budget deals within the parameters of the negotiations. We will of course keep members of the European Scrutiny Committee updated as appropriate, and I welcome their continued interest in this important issue. I commend the motion to the Committee.
Question put and agreed to.
Oral Answers to Questions
David Gauke Excerpts(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr David Burrowes (Enfield, Southgate) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
The Government are committed to supporting housing supply and ensuring that the housing market works for everyone. Good progress has been made since 2010, with housing supply now at an eight-year high. In October, my right hon. Friend the Communities and Local Government Secretary launched a £3 billion home building fund to provide loans to house builders to unlock over 200,000 homes. However, the scale of the challenge requires us to go further, which is why my right hon. Friend the Chancellor announced that the Government will invest £2.3 billion in a new housing infrastructure fund that will deliver up to 100,000 homes, and will invest an additional £1.4 billion to deliver 40,000 new affordable homes.
Mr Burrowes
Will the autumn statement’s £3.15 billion boost for London housing be flexible enough to meet the aspirations of both Londoners wanting a home they can afford to rent or buy and London’s homeless, whose complex needs include the need for supported housing?
Mr Gauke
I can provide that reassurance to my hon. Friend. The Government are committed to supporting housing supply and ensuring that the housing market works for everyone, including Londoners. London’s £3.15 billion affordable housing settlement will deliver over 90,000 affordable housing starts by 2020-21 across a range of tenures, including homes for low-cost home ownership and submarket rent, as well as supporting housing for Londoners with particular needs, and of course London will also benefit from the housing infrastructure fund.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
More people in my constituency rent privately than own their own homes and for most of them ownership is a distant or impossible dream. Are the Government considering looking at the supply of private rented housing on longer tenures, perhaps with rent guarantees, and possibly using tax reliefs or other mechanisms the Treasury has in its armoury, to encourage landlords to provide those longer-term tenancies and better security for the many private rented sector tenants?
Mr Gauke
The Government are taking action to ensure that we build more homes. There is a need for flexibility in terms of tenure, which was at the heart of my answer to my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), but last week’s autumn statement included a series of measures that will help to ensure that we are building more homes in this country, which is what we need.
Mr Philip Hollobone (Kettering) (Con)
Why is there such a large gap between the number of planning permissions and the number of housing starts, and what specifically can the Government do to close that gap?
George Kerevan (East Lothian) (SNP)
In last week’s autumn statement, the Chancellor raised the tax on house insurance by 20%. How is that supposed to help first-time home buyers to get access to housing?
Mr Gauke
We were very clear that the 2% increase in insurance premium tax was a revenue-raiser that enabled us to introduce the measure on changing the taper for universal credit, which increases the incentives to work. We believe that was the right course of action, but if we look at the autumn statement, and indeed the announcement made at the Conservative party conference, what is very clear is that this Government are committed to ensuring that we build more homes, which is what the public rightly expect.
Jo Churchill (Bury St Edmunds) (Con)
The Chief Secretary to the Treasury (Mr David Gauke)
In the autumn statement, we prioritised additional high-value investments, specifically in infrastructure and innovation, that will directly contribute to raising Britain’s productivity. The Chancellor announced a new national productivity investment fund of £23 billion to be spent on housing, transport, digital communications and research and development over the next five years. Local enterprise partnerships will receive £1.8 billion of growth deal funding. This will go towards the projects needed to bring about economic growth in local areas, including new homes, transport improvements and supporting businesses and people to access the skills they need.
Jo Churchill
I welcome all those measures to boost productivity and particularly to turn attention to infrastructure and the specifics for the east of England given yesterday. However, given the strategic importance of the A14 trunk road linking Felixstowe port with Cambridge and the rest of the country, as well as its significance to 80% of businesses in Suffolk, does the Minister agree that further improvements to a road that he knows well are vital to productivity?
Mr Gauke
My hon. Friend is right—it is a road that I know well. We certainly agree that the A14 is a critically important part of the network. We are investing £1.5 billion for a major upgrade to cut congestion on the A14, including a new 21-mile road between Huntingdon and Cambridge, and only yesterday my right hon. Friend the Transport Secretary was able to go there to witness the start of the work.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Mr Gauke
No, that is not true. There is a balanced package and all parts of England will benefit from the transport measures. The Barnett consequentials should mean that Scotland, Wales and Northern Ireland can also benefit in this area. A specific announcement about the midlands hub was made in the autumn statement and there is more to be said about the midlands engine. This is a Government who are determined to ensure that the whole country benefits from economic growth.
Antoinette Sandbach (Eddisbury) (Con)
Mr Gauke
My hon. Friend highlights the fact that digital must be key to improving productivity. That is why a £1 billion package was announced in the autumn statement. There was also specific help for rural areas through rural rates relief. Our ambition is clear: to provide the best digital infrastructure we can for urban and rural areas.
Rachel Reeves (Leeds West) (Lab)
In table 4.21 of the report Office for Budget Responsibility’s it forecast that the Government will underspend on infrastructure by £15 billion in the next five years—two thirds of the additional money announced by the Chancellor last week. Why should the public have any confidence in the ability of the Government to deliver on their promises when their own watchdog clearly does not?
Mr Gauke
The OBR has always taken a cautious view on delivery of infrastructure, but let us remember that we have already delivered 3,000 projects. We have set out an ambitious plan for delivery of infrastructure improvements in the course of this Parliament, and that is exactly what we will deliver.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
Christian Matheson (City of Chester) (Lab)
The Chief Secretary to the Treasury (Mr David Gauke)
I will take that as a representation and make sure that my right hon. Friend the Transport Secretary is aware of it. The hon. Gentleman will be aware that we are already setting out an ambitious programme for road spending over this Parliament. In addition, my right hon. Friend the Chancellor of the Exchequer made announcements last week about putting in more funding to improve our road network across the country. I am happy to look at the case that the hon. Gentleman raises.
Suella Fernandes (Fareham) (Con)
I recently visited ASV Global in Portchester, an innovator in unmanned and autonomous marine technologies. In just six years, ASV has designed 70 new products, which it has delivered to 10 countries and 40 customers. What further support for research and development is available to companies such as ASV to boost job creation and wealth?
Ms Margaret Ritchie (South Down) (SDLP)
Mr Gauke
It is not a vehicle to interfere, but we have been clear from the very beginning that if the Northern Ireland Executive wish to reduce corporation tax rates in Northern Ireland, they need to do so in an environment in which we can be confident that the public finances are on a sound footing in Northern Ireland.
Martin Vickers (Cleethorpes) (Con)
When I met the leader of North East Lincolnshire Council yesterday, he emphasised to me that one of the major challenges facing our coastal community is that many people retire there and put additional strains on the adult social care budget. Will Ministers assure me that that will be considered when allocating departmental budgets?
Marie Rimmer (St Helens South and Whiston) (Lab)
With just one in six people with autism in employment, would it not have been better to invest in improving the Work and Health programme, rather than cutting it, to assist people to gain employment and thereby save on benefits? They want to work.
Mr Gauke
The reforms that we have announced will enable us to spend £330 million on practical support to ensure that people in the work-related activity group can work. May I point out that, over the past three years, the number of disabled people in employment has increased by nearly 600,000?
Richard Fuller (Bedford) (Con)
The key insight of the Government’s productivity plan is that value can be unlocked through more timely implementation, so will the Chancellor have a word with the Transport Secretary to see how he can speed up the completion of the final part of the Oxford to Cambridge link from Bedford to Cambridge?