Delivery of Public Services
Simon Clarke Excerpts(1 year, 10 months ago)
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The Chief Secretary to the Treasury (Mr Simon Clarke)
I hasten to say that we very much remain in office, Madam Deputy Speaker. I am pleased to respond for the Government to this debate. I begin by saying, as I have on many occasions, that we understand the impact of global inflationary pressures on the cost of living. We have already acted in many different ways to ease those pressures, and we will continue to do so; we are acting, as we see it, reasonably and responsibly to help UK households get through this. The reality is that we are experiencing a perfect storm of international supply shocks. High global energy and commodity prices, together with problems affecting international supply chains in the wake of the pandemic, have pushed up prices around the world, and consumers and businesses are feeling the pinch.
Chi Onwurah
I thank the Chief Secretary for giving way. Is it his view that 10 years of austerity economics, which slashed the capacity of both central and local government to spend, left our Government’s public services with the resilience to meet the demands of the covid crisis, and the cost of living and inflation crisis?
Mr Clarke
I take the view that 10 years of responsible government made sure that this Government had the financial resources available to unleash £400 billion of support for the UK economy in response to the pandemic.
On top of the issues with supply chains, Russia’s invasion of Ukraine has significantly worsened the situation. I know that the House is united in the view that we should stay the course with Ukraine and stand up for freedom and democracy there in the face of this barbaric onslaught, but that comes at a cost. Domestic factors have also started to play more of a role. For example, although our very low rate of unemployment is welcome and good in its own right, that contributes to the relatively high rate of inflation.
Rising inflation poses a challenge for the public finances, as it does for family budgets. As in many other countries, high inflation is acting as a curb on growth. The good news, which I will come to, is that the Government have the tools and the determination to tackle inflation and boost growth—namely, an independent monetary policy, a responsible fiscal approach and a focus on supply-side reform.
Hywel Williams
I notice that the right hon. Gentleman did not include Brexit in his little list. Last week, the Resolution Foundation said that by 2030, Brexit will cost the average worker more than £470 per annum in lost pay. Would he like to include that in his list?
Mr Clarke
Well, there have been many projections about Brexit, many of which have proved totally wrong. I certainly do not regret my vote to leave the European Union. We managed the fastest vaccine roll-out in Europe; we are able to create our new freeports; we are free of the European Court of Justice; and we are not sending huge sums to Brussels, and can instead deploy that money for the public good. Frankly, those are all reasons why this Government were returned with a thumping majority in 2019. Crucially, it is a settled question, and it would be well for this country to move beyond it. There are all sorts of debates to be had about how we can take advantage of our decision to leave the European Union; those would be a more productive use of this House’s time.
We have a plan to grow the economy sustainably, boost productivity and improve living standards for millions of households in the years to come. In the past two years, the Government have demonstrated our determination to lead this country through the worst crisis—indeed, crises—in living memory. We will do the same as we tackle the challenges of today. As I have mentioned, the Government have taken steps to address the cost of living challenges. We are putting £37 billion into helping households, and are targeting that support at those who need it most. The households most vulnerable to high inflation will receive an extra £1,200 this year, with the first payments coming next month. Everyone will benefit from our energy support package, which will provide £550 for 28 million households.
Dr Luke Evans
I have had the good fortune to go to Hinckley jobcentre to see how things are functioning there, given the adversity that our constituents face. One of its strongest features is the household fund, which delivers to those who are most needy. It gives the officer who sits in front of an individual the flexibility and accountability to support them at that point. Is that not exactly what we should be doing—targeting our greatest support at those who are most vulnerable?
Mr Clarke
I completely agree. That has also been my experience at my jobcentre. It is really important that across the House we emphasise that our jobcentres are a fantastic source of support and not something to be scared of. The teams in my constituency could not be more committed to helping the public; I am sure that the same is true of those in my hon. Friend’s constituency. That is a really important message, given our aim of getting as many people as possible into work.
Crucially, our package of support is more generous than what the Labour party suggests; that may be why there has been some chuntering on the Opposition Front Bench. The public, if they are in the 8 million means-tested benefit households, will receive £1,200 under our plans, compared with only £600 under Labour’s. The Institute for Fiscal Studies has said of our intervention:
“On average the poorest households will now be approximately compensated for the rising cost of living this year.”
On top of that, we have cut fuel duty, and we have set aside £1 billion to help those who are most in need with the cost of essentials such as food, clothing and utilities through the household support fund, which my hon. Friend the Member for Bosworth (Dr Evans) mentioned.
There are other ways of putting money back into people’s pockets. From next week, as the Chancellor explained in the spring statement, working people
“will be able to earn £12,570 a year without paying a single penny of income tax or national insurance…That is a £6 billion…tax cut for 30 million people across the United Kingdom”.—[Official Report, 23 March 2022; Vol. 711, c. 340.]
Rushanara Ali
The Chief Secretary mentions ways of putting money into people’s pockets. Will he explain how he will recover the £26.8 billion that the Treasury has lost to fraudsters and error, and the £11 billion lost by failing to insure against interest rate rises? If the Government could recover that money, or if they had not wasted it through fraud and mismanagement, there would be billions of pounds in the public purse to support our constituents right now. Instead, it has been lost through incompetence.
Mr Clarke
I respect the hon. Lady from our days of old on the Treasury Committee, and I completely share her commitment to managing public money responsibly, but I gently disagree with those numbers. Clearly some fraud has been perpetrated during the pandemic, and we are managing it actively; indeed, in July, the new public sector fraud authority will go live, backed by some £25 million of additional funding, which is a welcome step. However, sometimes the figures cited in fraud debates capture items such as the write-down in value of the personal protective equipment that was purchased at an absolute premium at the height of the pandemic and that subsequently became worth much less in an era of much greater supply. We should be careful to take the issue seriously, but should not convey the impression that things are as bleak as the hon. Lady makes out.
Mr Clarke
I am going to make some progress at this point.
The Chancellor has also announced his intention to cut the basic rate of income tax from 20p to 19p in the pound from 2024. This will be the first income tax cut for 16 years, and it will be a £5 billion tax cut for 30 million people. The Chancellor has also said that he will set out his support for businesses in more detail in the autumn Budget.
Crucially, everything that we have done has been done responsibly, reflecting our continued commitment to strong and sustainable public finances. In direct contrast, the Labour leadership has so far promised £99.5 billion of day-to-day spending commitments—
Mr Clarke
I can provide the hon. Gentleman with the full details if he would like a list.
However, Labour has only announced £7.5 billion in revenue to pay for those commitments, less than one tenth. That leaves a £92.5 billion fiscal black hole of unfunded public spending commitments, which would almost double our current borrowing. This year we will spend £80 billion just paying interest on our debt. That is nearly four times what we spent last year, and those numbers should concern the whole House. The Office for Budget Responsibility made it very clear at the time of the spring statement that our fiscal headroom could be
“wiped out by relatively small changes”
to the “economic outlook”. Labour’s £92.5 billion black hole would mean an extra £3,303 per household in general taxation or extra borrowing. In opposition, parties have the luxury of promising it all and not being responsible for delivering any of it.
Rushanara Ali
It is rather rich for the Minister to lecture the Opposition about funding when he has not even been able to tell us how much will be lost in fraud on his watch. His own counter-fraud Minister, after he resigned, said that it had been
“happy days if you were a crook”.
That is what his Government are doing—dishing out money to crooks. Perhaps the Minister could answer my earlier question: how much money has been lost to fraud and incompetence, and how will he recover that money?
Mr Clarke
We have set out a very clear plan to recover that money, and we have provided regular periodic updates on the progress that we are making against fraud, but we do not accept Lord Agnew’s characterisation of the situation. We continue to pursue this, and obviously the authorities reserve the right to pursue individuals and companies wherever it is clear that wrongdoing has occurred.
As a Minister, I am proud to be part of a Government who support people through difficult times, but that needs to go hand in hand with fiscal responsibility. The support that we are providing is timely, temporary, and targeted at those who need it most to avoid pushing up prices and interest rates further.
The motion lists a number of other issues, including passports, driving licences, GP and hospital appointments, court dates, and airports. Let me take each of those in turn.
Owing to covid-19, more than 5 million people delayed applying for British passports. Following the return of unrestricted international travel, there has been unprecedented demand for new passports, with 9.5 million applications forecast for this year. That compares with 4 million applications in 2020 and 5 million in 2021. Since April 2021, 650 additional staff have been brought in, with a further 550 arriving over the summer, and those numbers are starting to tell: more passport applications are being processed than ever before. In fact, between March and May alone, the Passport Office completed the processing of some 3 million applications. Since April 2021, people have been advised to allow up to 10 weeks to receive their passports, and 98.5% of applications have hit that target. For the small percentage of customers whose applications take longer than 10 weeks, and who are due to travel within a fortnight, there is an expedited service, at no additional cost, to ensure that they obtain their passports in time.
I am encouraged by the hard work of employees at the Driver and Vehicle Licensing Agency to clear the backlog in the processing of driving licence applications and waiting times for driving tests which built up throughout the pandemic and last year’s industrial action. I am confident that the DVLA remains on track to reduce waiting times further over the course of this year.
On NHS waiting lists, I want to take this chance to thank the NHS for the commitment with which it is tackling the backlog that built up during the pandemic. This Government are already instituting one of the largest catch-up programmes in the history of the NHS, spending more than £8 billion between this financial year and 2024-25 to tackle the backlog so that the NHS in England can deliver some 30% more activity in 2024-25 compared with pre-pandemic levels.
Helen Morgan (North Shropshire) (LD)
In the Shrewsbury and Telford Hospital NHS Trust, nearly 18,000 women are waiting for a breast scan that is overdue, largely because of a shortage of individuals who can perform those scans. Five full-time equivalent posts have been left vacant. Does the Minister agree that something needs to be done to tackle these workforce issues so that we do not fail to deliver key services and increase the risk of avoidable death?
Mr Clarke
I want to reassure the hon. Lady and her constituents that we completely agree that there is a need to ensure that those sorts of scans happen as speedily as possible. That is why the total budget of the Department of Health and Social Care in 2024-25—that is to say, at the end of this Parliament—will stand at £188 billion a year. That is a truly colossal sum of money and it equips the NHS to bear down on precisely these backlogs in a way that will help women in her constituency.
Dr Luke Evans
I sit on the Health Committee, and we were talking this morning about some of the problems with the workforce and the interaction between primary care and secondary care. One of the responses was that the 42 new integrated care systems that have been put in place will give us the flexibility to change the system. Does the Minister agree that this is exactly the kind of planning and foresight that allows us to deliver better for the future, and to future-proof our health service to try to deal with some of the problems that we all know are affecting western world medicine?
Mr Clarke
I agree with my hon. Friend. It is crucial that the NHS continues to reform and, frankly, become more fit for a technological age, as well as for one in which we can anticipate these problems ahead of time. We should act to improve the use of all the technologies, which will mean that we get more value for taxpayers’ money. With an ageing society that is plagued by so many avoidable and preventable conditions, we need to be able to catch them in time, and that planning and foresight will be crucial for the future.
John Redwood
When I asked representatives of the Health Department how many chief executives there were in NHS England, they said that they did not know. Has my right hon. Friend had any more success than I have in finding out how much senior management there is, how it is aligned with the interests of patients and how wisely it is going to spend the extra money he is giving it?
Mr Clarke
My right hon. Friend is right to say that with this budget for the NHS comes a responsibility for that organisation to be absolutely open and candid—in a way that, frankly, it has too often not been—about where its resources are deployed, and certainly to avoid funding a culture of managerialism at the expense of the patients. We have had recent success in securing some of the data that we have been looking for, but this is a subject where ongoing pressure from across the House for greater transparency is welcome. Certainly if there is any data that we hold that my right hon. Friend would like to see, I will do my best to facilitate that.
James Daly
I welcome the steps the Government are taking to address the challenges within the system. Does my right hon. Friend agree that it is a bit rich for Labour Members to be lecturing anybody on waiting times when waiting time targets in Wales have not been met for many years? As of May 2022, nearly 700,000 patients were waiting for care, which is a 50% increase since February 2020. That is a record to be ashamed of.
Mr Clarke
My hon. Friend makes an important point. The performance of the Welsh Government in this area is genuinely concerning, but this also demonstrates a point about fundamental fairness. This debate is sometimes mischaracterised as everything being this Government’s fault, but as we have heard from the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), the performance of the Scottish healthcare system is blighted by many of the challenges that we are facing in England. Clearly there are also problems in Wales and significant problems in Northern Ireland. What matters is that we set out a clear plan to deal with them.
Our NHS elective delivery plan states that by next month no one will be waiting more than two years for elective care, except where patients choose to wait longer for some reason, and in a number of highly specialised areas.
We know that considerable progress has been made in achieving that target. The number who have waited two years or more in acute hospitals has fallen by 15,000 to 6,700, down from a peak of 22,500 in January. At the same time, the Government are on track to deliver our manifesto commitment for 50 million more primary care appointments by 2024. GP appointment numbers have already recovered to pre-pandemic levels, with 25.3 million taking place in April, of which 1.3 million were covid vaccinations.
The motion also mentions court dates, where we are also making good progress. We are providing almost half a billion pounds to address criminal court and tribunal backlogs.
Rob Butler
The shadow Chief Secretary was reluctant to give me a straight answer to my question, so I wonder whether the Chief Secretary would tell me whether he believes the strike by barristers will lengthen or shorten the waiting times in our courts. Does he think strikes by public service workers more generally will do anything to help our economy and our recovery from the covid pandemic?
Mr Clarke
I thank my hon. Friend for his substantive question, and there was a certain reticence from the shadow Chief Secretary to answer it. The public will look in consternation at barristers striking when there is an offer on the table of a £7,000 a year pay increase for that profession. It comes down to a test of values: if they are serious about tackling the backlog in our courts, they should get to work, accept the pay offer and move forward. It would be helpful if the official Opposition, rather than looking at their feet or their phones, would get on with the job of persuading public service workers that the best interests of the public and those workers themselves lies in accepting reasonable pay offers, moving forward and not further gumming up public sector delivery by taking unnecessary strike action.
We are providing some half a billion pounds to address criminal court and tribunal backlogs. We have also extended 30 Nightingale courtrooms to help manage complex cases that would otherwise crowd out cases that are easier to answer. We are also investing £200 million to complete the £1.3 billion court reform programme. Reform is making our courts more modern, with a wide range of new online services to make the courts more efficient—this includes rolling out a new digital platform to manage 1.5 million annual criminal cases.
Finally, on airport delays, the reality is that we are seeing disruption globally in the travel sector as it is reopening, at pace, after almost two years of being shut down during the pandemic. Anyone who has seen the scenes recently at Schiphol or Dublin will recognise that, fundamentally, this is an international challenge. Where possible, the Government are supporting our aviation sector to manage the risk of disruption this summer. That includes using our post-Brexit freedoms to provide the sector with more flexibility when training new employees; working with Border Force to ensure preparations meet passenger demand; and allowing HMRC employment history letters to be used as a suitable form of reference check. Last week, we also laid regulations before Parliament that will help airlines prevent last-minute flight cancellations during the summer peak by allowing a one-off “amnesty” on airport slots rules.
While we are working around the clock to help people get on with their daily lives, the Labour party has, once again, chosen to side with its trade union paymasters and join the picket lines. During the pandemic alone, we delivered some £16 billion of emergency funding to keep the railways running, which is equivalent to £600 for every family in the UK. That level of subsidy is unsustainable and shows why reform is needed now, but instead of working together to achieve the reforms we need to make the railways fit for the future—and it is eminently achievable and fair, and really important—Opposition Front Benchers have backed the strike action and joined the picket lines. Those strikes have stopped people from getting to work, created additional stress for students taking exams and created untold problems for patients needing treatment. The shadow Front Benchers wish to form a Labour Government, but through their actions it is clear that a Labour Government would be content to see the country brought to a halt by militant union leaders. On this issue, the Opposition have displayed no leadership whatsoever.
I said that I would come back to the issue of inflation, and how the Government are addressing it. As the Chancellor told the House last month, we have three key tools at our disposal: independent monetary policy, fiscal responsibility and supply side reform. We have every confidence that the independent Bank of England will take decisive action to get inflation back on target, with it having averaged precisely 2% over the last 25 years. Our second tool is responsible fiscal policy. We know that any fiscal support we provide must be timely, targeted, and temporary, to avoid making the situation worse, by causing inflation, and interest and mortgage rates, to go up further than they otherwise would.
We are also taking an active approach to supply-side reform through initiatives such as the energy security strategy, which will reduce bills by increasing energy supply and improving energy efficiency; moving 500,000 jobseekers off welfare and into work; doing more to support older people back into the jobs market; and making our visa regime for high-skilled migrants one of the most competitive in the world.
The Opposition have no plan to tackle inflation. If they support double-digit, inflation-busting pay rises for public sector workers, do they accept the inflationary effect that will have? Does the shadow Chief Secretary accept that that would lead to higher and more prolonged inflation, hammering the incomes of more vulnerable households? How does Labour propose to pay for inflation-busting pay rises? Every Labour spokesperson who refuses to answer those questions—and they all do—is ducking questions that are fundamental to the running of our economy and our society. The public will draw their own conclusions.
We understand that growing the economy sustainably into the future is by far the best way we can support families in the long term. That is exactly why we will continue to invest in capital, people, and ideas, so that we can boost productivity and improve living standards. It is why we will cut the burden of taxation as we move out of the shadow of the pandemic over the years ahead. In his February 2022 Mais lecture and in the spring statement, the Chancellor spoke about his plans to create the conditions for private sector growth by supporting a culture of enterprise. Together, our plan for growth and our tax plan represent an ambitious strategy for boosting growth and productivity. By contrast, the Opposition call for a “new approach” to the economy. It is not a new approach: it is the same old Labour—uncosted spending, higher borrowing and a surrender to hard-line trade union bosses at every turn, every time. This Conservative Government will not make those mistakes. We will stick to our plan, make responsible choices and guide our country through difficult times to better days ahead.
Several hon. Members rose—
Oral Answers to Questions
Simon Clarke Excerpts(1 year, 10 months ago)
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Sarah Atherton (Wrexham) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
The levelling-up White Paper set out a clear plan to level up every corner of the United Kingdom by 2030. At the spending review last autumn, the Government showed how we would deliver our ambitious plan by delivering over £600 billion in gross public sector investment over this Parliament. That includes £4.8 billion in increased investment in local communities through the levelling-up fund, £1.6 billion for the next generation of the British Business Bank’s regional investment fund, and £2.6 billion for the shared prosperity fund.
Sarah Atherton
Wrexham’s levelling-up gateway bid has been supported by a 16,000-signature petition to create the first international sporting stadium in north Wales. Does my right hon. Friend agree that people are at the heart of the Government’s levelling-up agenda, and that the amount of people who have signed that petition demonstrates the need for such a scheme in places like Wrexham, which has been ignored by the Welsh Labour Government for 20 years?
Mr Clarke
My hon. Friend is a fantastic champion for Wrexham. I remember her coming to see me to talk about the merits of this particular bid, which obviously has enormous popular support; the number of people who have signed her petition testifies to precisely that.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Real levelling up requires money, and that means everybody paying all the tax they owe. So why did the spring Budget allocate three times more additional funding to the Department for Work and Pensions than to HMRC to deal with fraud, when we know that every £1 spent on fraud in the DWP recovers £6, but every £1 spent on fraud in HMRC recovers £18? Why are the resources not prioritised to bring the greatest reward?
Mr Clarke
This is undoubtedly an important issue, and the hon. Lady is right to raise it. Clearly, we are at a very important moment in the fight against fraud. Only next month, the new Public Sector Fraud Authority reporting to this Department and the Cabinet Office will go live, backed up by an additional £25 million over the spending review period. This represents increased resources for further support in terms of active measures on data, intelligence, risk and enforcement—all the things we need to do to crack down on fraud and to pursue the perpetrators.
Chris Green (Bolton West) (Con)
Martin Vickers (Cleethorpes) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
My hon. Friend is a fantastic champion for his region and his support for a freeport on the Humber has been noted across Government. We are of course investing in our levelling-up programme, which has a direct bearing on areas such as the Humber. Crucially, we want to advance devolution within England to allow areas such as his to reap the full rewards and take full control of this exciting opportunity.
Dan Carden (Liverpool, Walton) (Lab)
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Mr Simon Clarke
My right hon. Friend the Chancellor set out very clearly the choices the Scottish Government made at their most recent spending review, on which they can be judged. Let us be very clear: it is the Scottish Government and the Scottish Government alone who are wasting millions of pounds of this country’s and indeed their country’s citizens by pursuing a referendum. That is the last thing that Scotland or the UK needs, soaking up resources that should be spent on people who need them.
Anthony Browne (South Cambridgeshire) (Con)
Mr Clarke
This Government are determined to deliver for the people of Cambridgeshire. My colleagues at the Department of Health and Social Care will have heard my hon. Friend’s comments about the importance of this facility, and that is why we are investing £4.2 billion in new hospitals over the course of this Parliament.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Mr Clive Betts (Sheffield South East) (Lab)
Last year, at the spending review, the Government announced that after years of austerity there would be a small real-terms increase in local authorities’ spending power—but that was when inflation was around 2% to 3%. Has the Chancellor seen the recent assessment from the Local Government Association showing that, with inflation at a somewhat higher level now, it will cost local councils £2.4 billion extra this year? What steps will he and the Levelling Up Secretary take to have talks with the Local Government Association about extra help for local authorities so that we do not get another round of austerity imposed on our constituents?
Mr Simon Clarke
Of course, we invested £1.6 billion in local authorities in each year of the spending review precisely to help them with all the responsibilities that they must discharge. I would say to all Departments and devolved Administrations that, if we are to live within the spending review, it is vital that they make responsible choices about how to deliver services at best value to the taxpayer. We cannot be in a situation where we chase after inflationary pressures as that will only worsen and prolong the crisis that we face.
Felicity Buchan (Kensington) (Con)
Stephen Crabb (Preseli Pembrokeshire) (Con)
Thanks to this Government, we have record low unemployment and more job vacancies than jobseekers, but almost 9 million people are economically inactive, including many who can work and many who have worked in the recent past. Does my right hon. Friend agree that getting more of this group back into work is key to filling the labour shortages that many Members have spoken about today, and to strengthening our economy for the longer term?
Mr Simon Clarke
My right hon. Friend is absolutely right, and he knows about this from his time as Secretary of State for Work and Pensions. There is no doubt in my mind that the work we are doing, through the spending review, to provide more than £1.1 billion of measures to support disability employment and the effective management of health in the workplace will be important. The Government’s Way to Work programme is yielding fantastic results, and is a sign of our intention in this space.
Valerie Vaz (Walsall South) (Lab)
Some £11.8 billion was lost to fraud during the pandemic, according to a plethora of organisations such as the National Investigation Service and the Insolvency Service. I know the Chancellor is keeping tabs on public money, but will he publish a real-time dashboard on the recovery of public money?
Mr Clarke
We provide regular updates on the amount of money lost to fraud because all Members on both sides of the House want action to pursue perpetrators. We have shown our intention in this space with a series of targeted interventions against fraud, the most recent of which is putting in place the new Public Sector Fraud Authority, which goes live in July.
Mr David Davis (Haltemprice and Howden) (Con)
The laws around IR35 are loosely defined, and it looks as though Her Majesty’s Revenue and Customs is using the tribunals and courts to pin down the case law on it. The effect is that I now know of a number of people whose legal bills are many times what their original tax bill might have been. This is impoverishing them, and in some cases bankrupting them, and obviously it is terrifying them. Will the Chancellor institute a review of this procedure? Although it is important that HMRC raises all the money necessary, it should not do so by destroying lives.
Oral Answers to Questions
Simon Clarke Excerpts(1 year, 11 months ago)
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Julie Marson (Hertford and Stortford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
The levelling-up White Paper sets out a clear plan to level up every corner of the United Kingdom, including a mission to increase productivity and improve living standards in every part of the UK by 2030. We will do this through the record funding allocated in the 2021 spending review, including £1.6 billion for the next generation of the British Business Bank’s regional investment funds. That sits alongside significant investment in communities through the £4.8 billion levelling-up fund, and giving local areas a greater say in investment, working in partnership with the Government through the £2.6 billion UK shared prosperity fund.
Felicity Buchan
Parts of our inner cities suffer deprivation, including in my constituency in north Kensington. Does my right hon. Friend agree that levelling up is about bringing forward all our left-behind communities, whether inner cities, coastal communities or the north, and, I add rather cheekily, will he support my levelling-up fund bid for step-free access to Ladbroke Grove tube station?
Mr Clarke
I thank my hon. Friend for her question; she is an outstanding champion for Kensington and, as she rightly says, it is not the case, as is sometimes portrayed, that the levelling-up fund does not have real importance for London and the south-east because, as we know, there are pockets of deprivation across this country and it is vital that we address them. Over £200 million was allocated in the first round of the levelling-up fund for London and the south-east, and clearly my hon. Friend’s council may wish to consider making a bid for the fund’s next iteration when that opens.
Ben Bradley
The east midlands has consistently been at the bottom of the charts for public and private sector investment. The Prime Minister has made it clear that he sees devolution as a key mechanism to level up, so the east midlands must surely be at the heart of that agenda. We are negotiating with the Government now in Derbyshire and Nottinghamshire, but will my right hon. Friend give me an assurance that these will not be second-class deals and the east midlands deals will have the same finance and clout as previous deals have had?
Mr Clarke
I really enjoyed my recent visit to Nottinghamshire to meet my hon. Friend and his colleagues. We are clear that devolution sits at the heart of our levelling-up mission and we have said that every part of England that wants a devolution deal can have one by 2030. We want those deals to have a sensible geography, and the strongest and most accountable leadership possible, and I am really encouraged that leaders in Derby, Derbyshire, Nottingham and Nottinghamshire—including, of course, my hon. Friend—have brought together a really exciting package of proposals. We look forward to coming to them in due course.
Andrew Bridgen
In recent years, the west midlands has economically outperformed the east midlands—apart from, of course, my constituency of North West Leicestershire. To what extent does my right hon. Friend believe that is due to the west midlands benefiting from its mayoralty structure? What help can the Treasury give to the east midlands to ensure that we level up with our neighbour?
Mr Clarke
I pay great tribute to the work that Andy Street has done as Mayor of the West Midlands to drive economic outperformance. I am a convinced believer in the merits of mayoral devolution, which is the best way of ensuring that levelling up is delivered at the fastest possible pace on the ground. I look forward to looking at proposals from the east midlands to ensure that we can unlock as much opportunity there as possible.
Julie Marson
Hertford and Stortford lies at the heart of the London-Stansted-Cambridge innovation corridor, which is key to helping my constituency and our region address its pockets of deprivation. Will my right hon. Friend outline how his Department is working to attract more innovation-based businesses, particularly in life sciences, to the area?
Mr Clarke
I share my hon. Friend’s passion for the UK’s world-leading life sciences sector. That is why we have invested £5 billion in health research and development, including for delivery of our life sciences vision, as well as £60 million for the life sciences innovative manufacturing fund and £200 million in the life sciences investment programme, all of which institutions in Hertfordshire can benefit from.
Gareth Thomas (Harrow West) (Lab/Co-op)
I am sure that the Chief Secretary will agree that, for levelling up to work well, there is a need for more jobs linked to exports to be created across the UK. With export growth in the UK lagging behind that of every other rich nation, why did he and his colleagues sign off cuts in funding to the North East England chamber of commerce to promote exports from that region?
Mr Clarke
I agree that a flourishing export sector is vital. That is, of course, why we are so pleased to be delivering innovative policies in the north-east such as a freeport on Teesside, which is a great example of how we will bolster the export strengths that exist for our current and future employers. We clearly want to work closely with all partners, including the chambers of commerce, who do an excellent job, but it is absolutely not just about measures in grants to any individual institution. Our ambition is to create a high-growth, high-wage economy, and exports sit at the centre of that. Our actions speak loudly about our total commitment to that.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Government said they would prioritise closing the gap in pay, employment and productivity, yet since the Prime Minister took office average monthly earnings in every single north-east constituency have fallen even further behind those in London. Can the Government see that telling families to learn how to cook and to work more hours while forcing cash-strapped local authorities to bid competitively for small pots of money will not rebalance our economy? We need a much greater focus on creating and boosting jobs in those areas that really need them.
Mr Clarke
I know and obviously share the hon. Lady’s passion for the north-east. The enormous success of our plan for jobs is something that we ought to be celebrating today. We have had the fantastic news that unemployment is at its lowest level since 1975, which is an enormous achievement and one that we should all be collectively delighted by. We face global inflationary pressures, which are a serious challenge not just for this country but the eurozone, America and, indeed, the entire developed world as we both recover from covid and handle the consequences of Russia’s illegal invasion of Ukraine, and we are absolutely focused on rectifying that through a concerted programme of action. Obviously, we have put together a £22 billion package of support for households, and we will take future steps as the situation warrants.
Imran Hussain (Bradford East) (Lab)
According to an independent analysis of the Government’s own 12 metrics for measuring progress in levelling up, Bradford East is behind on almost every single one, with lower pay, productivity, Government spending, transport investment, school grades and life expectancy. I am perplexed by how the Minister can stand there and tell us that he is serious about levelling up when the Government refuse to do anything to level up places such as Bradford East.
Mr Clarke
The whole point is that that is precisely what we are not doing. We have created a West Midlands mayoralty which is channelling huge amounts of public money into supporting—[Interruption.] Sorry, the West Yorkshire mayoralty. The point stands. We have created a West Yorkshire mayoralty which is designed to drive forward growth and opportunity in that region. We have a whole programme of action, from the levelling-up fund and our wider commitments around jobs and growth, which the hon. Gentleman knows, as well as I do, will make a massive difference to the future of Bradford and the rest of West Yorkshire in the years ahead.
Stephen Flynn (Aberdeen South) (SNP)
The UK Government’s own website states that levelling up is a moral, social and economic programme right across Government, so can I ask the Minister where is the moral argument in people not being able to feed their kids? Where is the social argument in people not being able to heat their homes? And where on earth is the economic argument in people having no money in their pockets?
Mr Clarke
Levelling up is a social and moral mission. I believe very strongly that it is vital that we close the gap between the more successful parts of the UK and the rest. I represent a constituency that sits at the heart of that process. On the hon. Gentleman’s point on the cost of living, we have put together a £22 billion package of support, including a £9 billion commitment specifically on energy bills, but we are absolutely clear that we do not solve an inflationary crisis by throwing money at the problem, as that could worsen the issue we are seeking to address. The Chancellor will keep all these issues under close review. [Interruption.] I can assure the hon. Gentleman that he most certainly does. We will bring forward a programme of measures at such time that they will make the right difference in a targeted way, which, as I say, does not make worse the very problem that we all need to solve.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Last week, Bloomberg published a report that showed that, on the Government’s own chosen 12 measures of levelling up since the Prime Minister took office, most parts of the country are either falling even further behind London and the south-east or have made no progress, including every single constituency in the west midlands. That includes salaries, home affordability, inward investment, transport spending and levels of crime all going backwards. Why is levelling up so far failing to deliver?
Mr Clarke
The right hon. Gentleman raises the Bloomberg report. We have to recognise, when we look at this issue, that levelling up is a decades-long project for reversing things that are institutionally extremely challenging in terms of the striking geographical inequalities that have arisen under successive Governments and which this Government are determined to address. The levelling-up White Paper, published this spring, puts in place a framework for the Government to work directly with people and places to help address those disparities. We will be held to account with an annual report to monitor our progress. What I would say is that the people of the west midlands made their views very clear last year when they re-elected Andy Street as their Mayor, just as they made their views very clear on Teesside when they re-elected Ben Houchen. They can see progress. They are realistic—none of this is easy and none of this is going to be an instant turnaround—but they are clear that we have a plan to deliver it and they are behind that.
Mr McFadden
The Conservatives have been in office for 12 years; they were not elected last week. This is the self-declared central mission of the Government. Tackling regional inequality is a good aim. Communities like the one I represent in the Black Country made the last industrial revolution and they can make the next one too if they are given a platform on which to stand, but now, with the Bank of England Governor warning of apocalyptic rises in food prices and a further likely steep rise in energy bills in the autumn, what will the Government do to reverse the failures outlined in the damning report last week, and bridge the grand canyon between the Prime Minister’s rhetoric on these things and the reality on the ground?
Mr Clarke
The levelling-up White Paper is a comprehensive package of measures designed to ensure we can deliver on our ambitious aims in this place. The Queen’s Speech, which we are debating this week, further demonstrates our commitment to making that a reality, including, notably, through the establishment in law of the UK infrastructure bank. It is clearly the case, as I say, that none of these problems are simple to address. We have to be honest on both sides of the House that both Labour and Conservative-led Governments have failed to narrow those disparities. We have a plan which I am confident will deliver meaningful change in short order and over the medium to long term make a transformative difference to communities.
Matt Western (Warwick and Leamington) (Lab)
The Chief Secretary to the Treasury (Mr Simon Clarke)
Last year, the UK was the fastest growing economy in the G7, and unemployment has fallen back to 3.7%, which is well below pre-pandemic levels. Growth in the first quarter here was stronger than that in the United States, Germany and Italy, and it is now 0.7% above pre-pandemic levels. The International Monetary Fund forecasts that the UK will be the second fastest growing economy this year and that by 2025 we will once again outpace the rest of the G7, with the fastest growing economy both that year and in 2026.
Matt Western
Across the 38 countries of the OECD only Spain had a bigger fall in its GDP from pre-pandemic levels than the UK. The UK is now uniquely placed in the cost of living crisis, owing to a decade of low growth under Conservative Governments. Can the Minister name any G20 country other than the UK that is forecast to have negative growth in 2023?
Mr Clarke
The UK has bounced back so strongly from the pandemic that we had the fastest growth last year, we have the second fastest growth this year and we are going to be leading the pack once again. So, we will have the second fastest growth in the G7 in 2024, and we will have the fastest growth in 2025 and 2026. We should be proud of that achievement. There is no doubt that, if we come out of a crisis earlier, there will be an element of other economies catching up in the near term, but the IMF is clear that over the course of the immediate outlook we are world leaders.
Lee Anderson (Ashfield) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
The success of our plan for jobs is playing a key role in growing the economy and spreading opportunity across the country. The Government protected 11.7 million jobs in the pandemic through schemes such as furlough, and of course we moved millions of jobseekers into work and supported young people through programmes such as kickstart and our apprenticeships offer.
Lee Anderson
Businesses in Ashfield are telling me that they are struggling to recruit young apprentices, even though they are offering top wages and education up to degree level. I am doing my bit by hosting an apprenticeships fair, but what more can the Government do to ensure that the young people in my area know that there are great, well-paid apprenticeship schemes available, so that they can have a fantastic career on their doorstep—and maybe a career in catering?
Mr Clarke
My hon. Friend is absolutely right to say that it is an important message, which this whole House should send out, that apprenticeships really matter, that going to university is not the only way to succeed, and that people can earn and learn at the same time on our great apprenticeship courses. I believe my right hon. Friend the Chancellor visited Caunton Engineering in my hon. Friend’s constituency to promote apprenticeships, and of course I wish his apprenticeships fair every success.
Christine Jardine (Edinburgh West) (LD)
The Chancellor mentioned that this plan for jobs is the long-term plan for restarting the economy. Do the Government accept that perhaps they need to do more immediately than simply having a long-term plan for jobs, in order to help people with the cost of living crisis?
Mr Clarke
We absolutely do accept that, which is why we brought forward a £22 billion package of support this year, with help ranging from reducing the burden of tax to providing support on things such as energy bills. That is absolutely in recognition of a very challenging economic landscape for people to be operating in, owing to the impact of the global pressures we are facing on inflation. We are clear that we have a plan for jobs and a plan for growth, and that we will get through the current crisis and deliver a much better future for the people of this country on the other side of what have been a remarkable couple of years and a very difficult one for the whole developed world.
Philip Dunne (Ludlow) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
Obviously we are all clear that all fraud against the Exchequer is an outrage and totally wrong. That is why we have established a £100 million taxpayer protection taskforce, which is precisely determined to focus on that. We also have a new fraud function within Government, which is heavily focused on making sure that we address those issues. We are determined to make sure that, where there has been wrongdoing, we crack down on it and recover the money to the maximum extent that we can. Obviously, when introducing these schemes, we had to balance the imperative of speed of delivery against the risks, and I think we struck the appropriate balance at that time.
Stephen Hammond (Wimbledon) (Con)
There was widespread welcome for last week’s announcement that the Government will introduce a financial services and markets Bill. Can my right hon. Friend confirm that the intention of that Bill will be to ensure that future regulation is proportionate, that the regulator is publicly accountable and that we intend to maintain the international competitiveness of this great industry?
Helen Morgan (North Shropshire) (LD)
Mr Simon Clarke
We are absolutely determined to reduce the burden of tax facing both businesses and individuals. We have already heard during the course of these exchanges about the action we have taken, for example, on the employment allowance and on business rates, which is precisely designed to help businesses succeed in what is obviously a challenging environment.
Afzal Khan (Manchester, Gorton) (Lab)
In my constituency, one food bank has provided 1,269 emergency food parcels in four months, 40% of which have gone to children. Food banks are now reporting shortages as people cut back to make ends meet. This is no longer about living; it is about surviving. So will the Government end their heartless policy and immediately scrap the national insurance hike that they have introduced during the cost of living crisis?
Dan Jarvis (Barnsley Central) (Lab)
My experience over the past four years or so has proved without doubt that truly levelling up South Yorkshire and the wider north will require transformative levels of investment. Does the Chief Secretary agree, and if so, does he truly believe that the investment is there to meet the huge challenge that we undoubtedly face?
Mr Simon Clarke
I pay tribute to the hon. Gentleman for his service as the Mayor of South Yorkshire; he did an outstanding job. It is very important that we recognise that we are going to need more great Mayors from across this House and from outside Parliament to help to deliver opportunity in the region. We are absolutely clear that our programme of investment, through a record spending review, is designed to make sure that levelling up moves from blueprint to reality over the course of the years ahead.
Nia Griffith (Llanelli) (Lab)
This Government have completely failed on growth in the economy, with the IMF, taking into account all the current Government proposals, currently forecasting that the UK will have the slowest growth in the G7 this year. The Minister will know that putting money into the pockets of the least well-off not only relieves their hardship but puts it into the local economy as they have to spend it, of necessity, back into the local economy, thus stimulating growth. Instead of choking off growth through the £20 universal credit cut, the national insurance hike and the refusal to use a windfall to relieve the hardship of these families, what new, additional measures do the Government propose to help hard-pressed families and to improve that IMF forecast on growth?
Andrew Gwynne (Denton and Reddish) (Lab)
Ministers spoke earlier about using infrastructure to level up, and they are absolutely right—we need to link local communities to where the jobs are, so transport matters. Why, then, is there a lack of joined-up government? The Treasury is paying billions towards High Speed 2 coming to Manchester, yet the Bill before Parliament will sever the Metrolink line through Audenshaw in my constituency to Manchester, meaning that the tram will not be able to run for two years. That is not levelling up, is it?
Mr Simon Clarke
What is levelling up is making sure that we have a colossal programme of transport investment designed to ensure that the connections both between regions and within regions are as strong as they can be, and I refer to the £96 billion integrated rail plan, which sits at the heart of our ambition in this space. Clearly the specifics of the proposal that the hon. Gentleman mentions are for Transport Ministers and the Mayor of Greater Manchester to discuss.
Mr Speaker
I let questions run on because the writs were moved earlier and we were late starting.
Devolved Administration Funding
Simon Clarke Excerpts(2 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Mr Simon Clarke)
Recognising the pressures people are currently facing, on 3 February the Chancellor announced that households in England will receive a £150 council tax rebate. As a result of this measure, the supplementary estimates 2021-22 confirmed £576 million through the Barnett formula for the devolved Administrations. Exceptionally, the Chancellor set out that the devolved Administrations would have the flexibility to spend that funding this year or next. £million Scottish Government Welsh Government Northern Ireland Executive Resource DEL excluding depreciation 295.954 180.196 100.066 £million Scottish Government Welsh Government Northern Ireland Executive Resource DEL excluding depreciation 37,543.254 16,504,940 14,239.497 Capital DEL (general) 5,326.302 2,985.238 1,817.601 Capital DEL (Financial Transactions) 235.694 179.726 124.656 Total DEL 43,105.250 19,669.905 16,181.754
The devolved Administrations have now all confirmed that they wish to carry forward this funding in full to spend in 2022-23. They will formally receive this funding at main estimates 2022-23.
The devolved Administrations’ 2021-22 funding as at supplementary estimates 2021-22 is therefore being reduced by the same amount.
In line with the statement of funding policy the Welsh Government is also switching £595 million from Resource DEL to Capital DEL (general).
This means that revised 2021-22 funding is as follows:
[HCWS724]
National Insurance Contributions (Increase of Thresholds) Bill
Simon Clarke ExcerptsThursday 24th March 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate National Insurance Contributions (Increase of Thresholds) Act 2022 View all National Insurance Contributions (Increase of Thresholds) Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 24 March 2022 - (24 Mar 2022)
The Chief Secretary to the Treasury (Mr Simon Clarke)
I beg to move, That the Bill be now read a Second time.
Yesterday, the Chancellor announced in his spring statement a series of extraordinary measures that will harness the tax system’s power to build a stronger and more secure economy for the United Kingdom. At an incredibly difficult time, when the whole world is reeling from the twin blows of a terrible coronavirus pandemic and Putin’s appalling attack on Ukraine, our three-part plan will help hard-working people with the cost of living by putting billions of pounds back in their pockets, most immediately through the changes to the national insurance contributions system that we will debate today, the detail of which I will set out shortly.
Our plan will create the higher growth that will drive the economy in the coming decades by creating a new culture of enterprise, including tax-cutting options on business investment and innovation. It will also allow workers to keep more of the proceeds of their hard work, by cutting the basic rate of income tax from 20p in the pound to 19p before the end of this Parliament—the first such cut in 16 years. In short, our tax plan is sensible, affordable and well targeted. People and businesses will benefit, the economy will be strengthened and, in turn, our country’s place as a safe haven for freedom, democracy, peace and prosperity will be cemented.
While our tax plan will unleash real and immediate benefits, in drawing it up we have recognised that it must be underpinned by fiscal responsibility. This Government are determined to protect our nation’s finances, so we have ensured that we have maintained space against our fiscal rules, we have continued to be disciplined and we have carefully considered the macroeconomic outlook. Let me remind the House that in the next financial year we will spend £83 billion on debt interest, the highest amount on record and almost four times what we spent last year.
Andrew Jones (Harrogate and Knaresborough) (Con)
My right hon. Friend makes an important point. One of the most telling stats revealed yesterday was that £83 billion figure. Can he perhaps help by putting it into context and comparing it with other budgets the Government must meet, such as the schools budget or the Defence budget? We have had two supposedly once-in-a-century events just 12 years apart—the ’08 financial crash with all its deferred implications and the coronavirus pandemic with its implications—and now we have a war in Europe. Does he agree that we are dealing with the most adverse set of circumstances any Chancellor has faced for a considerable period?
Mr Clarke
My hon. Friend is absolutely right. The sum of £83 billion dwarfs most Departments: it is the equivalent of adding Education, Transport and Justice together. We need to take this incredibly seriously. It is the context in which all our decisions in this statement had to be considered, and in which our actions in future years will be possible. We should be clear: it is the most vulnerable and the poorest who lose out the most if the Government lose control of the public finances. That is the central message that the Chancellor would want to emphasise.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister said that the poorest and most vulnerable lose out, but under the Government’s proposals it is precisely the people on benefits who are not being uprated to keep in line with inflation who are going to lose out the most. What has he got to say to that?
Mr Clarke
I would say two things. First, there is a raft of measures in place in the package announced yesterday precisely determined to help people on the lowest incomes, including, notably, the doubling of the household support fund to £1 billion, the action that we have already taken in cutting the universal credit taper rate, and the biggest cut that we have ever made to fuel duty. These are all things we have done, on top of the energy price package announced in February, that are designed to help people on the lowest incomes. Secondly, I hold the office of Chief Secretary, and I remember the Labour predecessor who left the note saying that there is no money left. I do not want to be in a position where I hand over a note to any successor of mine saying that there is an equivalent situation.
Stephen Timms
It has been reported overnight that people on universal credit will see only about half of the gain from the measure that the Minister is bringing forward compared with those who are not on universal credit because the portion of people’s income that will not now be subject to 12% national insurance will instead be subject to the universal credit taper at 55%. Is that assessment correct?
Mr Clarke
We are determined to help people on universal credit to keep more of what they earn. I have not seen the assessment to which the right hon. Gentleman alludes, but I will look at it. It is certainly our ambition to keep bringing down the taper rate so that people get to keep more of what they earn. In that regard, I will certainly look at the analysis to which he directs me.
Ruth Edwards (Rushcliffe) (Con)
Can the Minister confirm what the Institute for Fiscal Studies has said—that, contrary to claims from Opposition Members, the poorest 10% of households have benefited most from this Government’s tax and spend decisions since 2019?
Mr Clarke
I thank my hon. Friend for her question. There is no doubt at all that we have targeted the action that we have taken at the people who need it the most. That is why this Bill is so important, as I will explain, but it is also why we have taken the action on fuel duty, universal credit, the household support fund and TV licences—all things that are designed to help people whose incomes are most stretched at what is a difficult time for families up and down the country.
Jim Shannon (Strangford) (DUP)
I thank the Minister for the answers that he is giving. While I absolutely welcome the increase in the threshold for national insurance contributions to help those on the periphery, I say to him gently: does he not see that this should equally apply to child benefit and universal credit, and since it makes perfect sense for one, it must make perfect sense for all working families so as to take them away from the absolute poverty I have spoken about in the Chamber before that is so close to so many hard-working families?
Mr Clarke
The hon. Gentleman is a fantastic contributor to this place and he takes a keen interest in looking after people, including the most vulnerable people, in his constituency. I absolutely recognise that we want to make sure that families right across the income spectrum are supported. That is why, as I say, we have put in place a package of measures that has at its heart a desire to make sure that we have a strong safety net in place. We have to consider all the decisions we take in the round. To put it in some context, the United Kingdom spends £243 billion a year on our wider welfare spend, including pensions. This is a country where we do a huge amount to make sure that everyone is supported. We have to consider all our decisions in the context of both wider affordability and how the system operates. The welfare system always operates on the basis of an uprating in September for changes in the ensuing April. If there is high inflation during the course of 2022, as is forecast, that will be reflected in the uprating figures for April 2023, and the triple lock will be in place to protect families.
Mr Clive Betts (Sheffield South East) (Lab)
The Minister has talked about one side of the budget. The other side of the budget is spending. Local authorities provide incredibly important services that are of particular benefit to the poorest in society. Local authorities have suffered more than any other part of the public sector from the austerity period. The Government claimed that local authorities would get an increase in their spending power this year, but will he now confirm that, with the predicted level of inflation, they face a significant real-terms cut to their spending that will affect all the services that they provide?
Mr Clarke
As a former local government Minister, I hope the hon. Gentleman knows that I do value the impact that good local government can have on people’s lives, which is why we apportioned £4.8 billion extra at last autumn’s spending review to support local authorities in delivering vital services. It is of course the case that all the budgets that we announced at the spending review are affected by inflation, but the Chancellor is rightly clear that we cannot keep on simply mechanically adjusting the spending review decisions in the light of inflation, because that option would not be affordable within our headroom and would obviously not be open to family budgets either.
All Departments—national and local—will have to play their full part in managing the impact of inflation. There is much that can be done in this space through improved innovation and driving down costs. That is why a new Cabinet committee has been established in the last week that will squarely address how we can drive efficiency, including, for example, by doubling NHS efficiency targets so that we can deliver better value for money for the taxpayer. These are difficult times, but we have to ensure that we live within our means.
Ian Mearns (Gateshead) (Lab)
I am wondering how the Minister would suggest that a local authority such as mine in Gateshead innovates on that conundrum. When I ceased to be the deputy leader of the council in 2010, its net revenue budget was just over £300 million. This year, that budget is just over £200 million. It will take some innovating to balance that conundrum.
Mr Clarke
I am grateful to the hon. Gentleman for alluding to his experience in local government. I would simply say that there is a lot that good local authorities can do and have done already to ensure that they focus on value for money, but of course there is more that can be done. We need only look at the enormous potential for digitisation, property disposals and addressing back-office costs and sharing them with other local authorities. There is lots of innovation that can and should be done and there are good local authorities up and down the country that are doing that.
I will resume where I left off by addressing the fact that the Government cannot and must not shy away from difficult decisions, which is why the health and social care levy that we announced last year will remain in place, because it is only right to safeguard a dedicated source of funding for our NHS and for those who need care throughout their lives. As the Chancellor pointed out yesterday, a long-term funding solution for the NHS and social care is not incompatible with reducing the tax burden on working families, which brings me to the specifics of the Bill—an integral part of the Chancellor’s tax plan.
Alberto Costa (South Leicestershire) (Con)
We are here to discuss the national insurance contributions increase. The national insurance personal threshold will rise from £9,500 to £12,570 from July. Can my right hon. Friend confirm that that is the largest increase in a starting personal tax threshold in British history? As the largest single personal tax cut in a decade, is that not the evidence that the Opposition need that the Government really want to help workers across the whole United Kingdom?
Mr Clarke
I can give my hon. Friend that confirmation. I will expand on that later, because it is a major signal of intent at a time when our fiscal headroom is limited that we are determined that, where it is possible to help people, we will do so as effectively and dramatically as possible. The Bill is certainly a major step on that journey.
The Bill legislates for the two employee and self-employed NIC measures that the Chancellor set out yesterday. I will begin by giving some context behind those changes. It has long been the Government’s ambition to promote tax cuts for working people and to simplify the overarching system, which is why, since 2010, a series of Conservative Governments have taken millions of people out of income tax by raising the personal allowance from £6,500 to its new level of £12,570.
As the Chancellor explained yesterday, however, the equivalent NI threshold remained about £3,000 lower. As a result, at the last general election, the Prime Minister pledged to increase the national insurance threshold, and that is why, in 2020, we took a major step forward by increasing it to £9,500. This is a Conservative Government who are cutting taxes and delivering on our pledges to the British people.
Ruth Edwards
Can the Minister confirm that, as a result of the changes we are making today, 70% of workers will have their taxes cut by more than they will pay through the levy?
Mr Clarke
My hon. Friend is absolutely right, and we cannot emphasise that enough. We are determined to address the underlying challenges we face not only with the public finances, but crucially with the backlog of care. Let us not forget that 6 million people are on NHS waiting lists as a direct result of the covid pandemic. While we do that, we will always focus on supporting families and, crucially, on making sure that, when we do have to increase taxes, the burden is borne by those with the broadest shoulders. That is what the combination of this measure with the levy will deliver.
The Bill’s first measure will increase the NIC primary threshold and the NIC lower profits limit to £12,570 from 6 July. By way of explanation, these are the thresholds at which the employed and the self-employed, respectively, start to pay NICs. The increases in these thresholds of about £3,000 will equalise the NIC and income tax thresholds, and in so doing create a fairer and simpler tax system, something to which we ought all to aspire. That means that people will be able to earn £12,570 without paying a single penny of income tax or national insurance.
As we heard a moment ago, that is the largest increase in a starting threshold ever, it is the largest single personal tax cut in a decade, and it reduces the tax burden by £6 billion for 30 million people across the United Kingdom. On an individual level, a typical employee will see their tax bill reduced by £330 in the year from July, while the equivalent saving for a self-employed worker will be worth over £250.
Jacob Young (Redcar) (Con)
Does my right hon. Friend recognise the calculation by the Institute for Fiscal Studies that it is people who earn £35,000 or less who will benefit from this tax cut, and does that not show that our measures are targeted at those who need our support most?
Stephen Timms
Mike Brewer, who used to be with the Institute for Fiscal Studies, has said this morning about the value of the £330 figure to the average employee:
“If you are getting UC, then you lose 55% of that to a reduced UC award.”
I think that is a major issue for the House in evaluating the measure that the Chief Secretary is bringing forward. Could he please urgently clarify for us whether that is indeed the case?
Mr Clarke
As I said in response to the right hon. Gentleman’s earlier remark, I will of course look at what he is saying. I recognise fully that we want to make sure that we allow people to keep as much as possible of what they earn, and it is our ambition to keep reducing the tax burden on the lowest earners, including through action on the taper rate.
Sir David Evennett (Bexleyheath and Crayford) (Con)
My right hon. Friend is making a powerful and informative speech. I welcome this Bill, as will my constituents in Bexleyheath and Crayford, because it is helping those on lower incomes. Increasing the national insurance threshold to be the same as the personal allowance is sensible and logical, and it will help the simplification and understanding of the system. I very much hope that he and the Government will in future look at more simplification of the system.
Mr Clarke
My right hon. Friend is absolutely right in saying that we want a simpler tax system, and we want to make sure that the burden of tax is lower. In the end, the tax system should be an incentive that rewards work, and that is what our measures today continue to support. On the point raised by my hon. Friend the Member for Rushcliffe (Ruth Edwards), 70% of all workers will have their NICs cut by more than the amount they will pay through the new health and social care levy.
Sally-Ann Hart (Hastings and Rye) (Con)
My right hon. Friend will know that my beautiful constituency of Hastings and Rye has residents with some of the worst levels of deprivation in the country, and I obviously welcome this Bill on their behalf. Will he confirm for the residents of Hastings and Rye that this Government’s interventions have helped the poorest households the most through measures such as cutting the universal credit taper rate last year, increasing the national insurance thresholds, permanently increasing the local housing allowance for housing benefit and increasing the national living wage? Can he confirm that this will benefit my residents in Hastings and Rye?
Mr Clarke
I thank my hon. Friend for her question. She is a fantastic champion for Hastings and Rye, which I recognise is a part of the south-east that perfectly demonstrates that communities face very significant challenges in all parts of the United Kingdom. Sometimes the levelling up question is seen as the north and the midlands against the south, but her constituency is a very good demonstration of why communities in the south-east also need support. She is absolutely right in what she says. This is a Government with a strong track record of delivering for people who need the most help. It is worth noting in that regard that, as a result of the Bill, over 2 million people will be taken out of paying class 1 and class 4 NICs and the health and social care levy altogether, including, of course, in Hastings and Rye.
Mr Clarke
I should make some further progress, I think.
The Government recognise that implementing the Bill is a big change for many employers and payroll software providers, so I want to add a few words about the timeline for when we are implementing the changes. We believe that the date in early July strikes the appropriate balance between ensuring—this speaks to the point made by my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart)—that people benefit from the increase as soon as possible, while giving employers and payroll software providers time to update and test their systems so that the change can be delivered safely. That will avoid millions of taxpayers having to make manual claims for refunds at the end of the tax year and employers from having to make major payroll corrections. Clearly, that is a situation we want to avoid.
The Government are also acutely aware of the huge pressures faced by those working for themselves but earning low amounts as a result of the rising cost of living. To support that group, the Bill gives the Treasury a power to lay an affirmative statutory instrument. It will mean that from April those with profits between £6,725 and £11,908 will not pay class 2 NICs. That will rise to £12,570 from April 2023. The measure will benefit half a million self-employed people, saving them up to £165 a year. As I just mentioned, that group will still be able to receive NIC credits, just as they have done in the past.
Shaun Bailey (West Bromwich West) (Con)
I am grateful to my right hon. Friend; he is being incredibly generous with his time. May I just make a plea to him on operational delivery? This measure is really welcome news, but will he, through his good offices, work with Her Majesty’s Revenue and Customs in particular to ensure that there is clear guidance? Operational delivery will be key to ensuring that the measures he is announcing are as successful as they should be. I know that if he could provide that reassurance my constituents would appreciate it.
Mr Clarke
My hon. Friend is absolutely right to raise this issue. The Financial Secretary to the Treasury will be replying to the later stages of the Bill’s passage and will be able to provide direct confirmation that HMRC is focused on that issue. It is critical that HMRC plays its full role in delivering the measures as seamlessly as possible, and I know that it will.
Stephen Timms
I am grateful to the right hon. Gentleman and I apologise for intervening once again. He has made it clear that he is not able to answer the question about the effect of this measure on people claiming universal credit. Can he commit the Financial Secretary to the Treasury to giving us an answer on that point before the end of the debate? It is an important issue for the House to take into account when determining its decision on this measure.
Mr Clarke
I thank the right hon. Gentleman for that point. My right hon. and learned Friend the Financial Secretary will do her best to provide an answer based on the information that our officials can provide. It is important, obviously, that we answer questions correctly. It is worth noting that the universal credit taper rate has been reduced from 63% to 55% and the universal credit work allowance has been increased by £500 a year to help make work pay. That is a tax cut for the lowest paid in society worth around £1.9 billion in the financial year that is just about to begin. It means that 1.7 million households will on average keep around an extra £1,000. We will do our best to respond to the specific question that the right hon. Gentleman raises.
The effect on an individual’s ability to access contributory benefits and to build up state pension entitlement will be unaffected as a result of the changes to class 2 NICs. Taken together with the increase in the primary threshold and the lower profits limit, we will meet in full our commitment to ensure that the first £12,500 an individual earns is free of tax, clearly illustrating that this is a Government who make good on their promises to the people of this country.
Matt Rodda (Reading East) (Lab)
I thank the Chief Secretary to the Treasury for giving way and for his reassurance to people contributing towards the state pension. The Chancellor did not actually mention the word “pensioners” yesterday. Does he recognise the enormous pressure on many pensioners who are struggling to get by on very modest incomes at a time of significant inflation? Is it not time that the Government looked again at their support for pensioners, in particular on heating bills?
Mr Clarke
I thank the hon. Gentleman for his question and I recognise the sincere spirit in which he asks it. We are, of course, determined to deliver for our pensioners. That is why the Government have done so much to help to make sure that pensioners’ standard of living was not affected during the very difficult years we have just gone through, including spending £111 billion a year on the state pension, which is more generous that it has ever been. Many of the measures we are undertaking, for example our energy package, will benefit pensioners hugely. People will be getting £150 off their energy bill next month as a rebate on council tax if they live in bands A to D, with councils having a further £144 million available for discretionary payments to people who live in higher council tax bands who need further support. As I set out earlier, if the forecasts of very high inflation for this year do indeed come to pass, that will be captured in the uprating figures that will be delivered this autumn for the 2023 benefit uprating.
I want to draw to a conclusion on some broader points that this issue alerts us to. Every day in my role as an MP representing one of the poorest towns in this country, I hear from families and individuals who are struggling with the rising cost of living. I am fully respectful of the fact that this is a genuinely difficult time for the people of this country. I want to issue the reassurance that just as the Government stood by people during the covid crisis by providing a £400 billion package of support, so we will stand behind the people of this country as they face these new challenges, too. It is important to do so in a spirit of total candour. No Government anywhere in the world directly has the ability to offset the impact of first the pandemic and then a reckless and illegal war on our continent, but we will do our utmost with the tools we have, within our overarching aim of making sure that the public finances are protected.
This financial year and next, we will provide over £20 billion to help people with the cost of living. That includes over £9 billion of direct support with high energy costs for around 28 million households. That is why yesterday we announced our wider package, including this Bill along with a range of other measures, to ease the pressure on hard-working families and secure long-term economic growth.
James Sunderland (Bracknell) (Con)
The Minister will know that Bracknell is blessed with one of the lowest rates of unemployment in the country. Does he agree that the increased thresholds will absolutely reward hard work and be of benefit to working families right across the Bracknell constituency and beyond?
Mr Clarke
I thank my hon. Friend for his question. It is a fantastic success that Bracknell enjoys very low unemployment. It is actually the case that every region of our country now has lower unemployment than it did before the coronavirus pandemic hit, which is a huge Conservative policy success and a tribute to the hard work and enterprise of the British people.
As the Chancellor said yesterday—I will conclude with this—cutting taxes is not easy. It requires hard work, prioritisation and the willingness to take often unpopular decisions elsewhere, but it is precisely because we have made those tough decisions in the past that we have been able to reduce taxes in a responsible and sustainable way today. Our Government will always act swiftly and decisively to safeguard the best interests of our people. The Bill includes the largest cut to personal tax in a decade. It rewards hard work and supports the lowest earners. Its measures, while sweeping in scope and ambition, will make a real tangible difference to the lives of millions of people. That is why I commend it to the House.
Oral Answers to Questions
Simon Clarke Excerpts(2 years, 1 month ago)
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Dr James Davies (Vale of Clwyd) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
Some 130,000 young people across Great Britain have benefited from the kickstart scheme so far, including in my hon. Friends’ constituencies. That is lower than the 250,000 jobs that the scheme could have funded, but the scheme was designed at a time when unemployment was expected to peak at 12%. The reality is that, thanks to the intervention by my right hon. Friend the Chancellor, the economy has recovered better than expected and unemployment peaked at 5.2% in 2020.
Andy Carter
I am grateful for that response. Last week, I went to visit Sigma, a great local business in Warrington South, which has employed nine people under kickstart, and that has made a massive difference. Can my right hon. Friend tell me what steps the Government are taking to help businesses retain young people as we approach the end of the six-month kickstart programme?
Mr Clarke
It is great to hear about my hon. Friend’s visit to Sigma, and I know that 180 kickstart jobs have been created in his constituency as of December. For those on universal credit who do not immediately continue into full-time unsubsidised work, support will continue to be available from the young person’s work coach to help them use their newly gained skills, and support will also be available from the wider DWP youth offer.
Cherilyn Mackrory
Last week I visited the jobcentre in Truro where they told me that kickstart has been a huge success. We have had around 620 kickstarters across Cornwall, providing urgently needed jobs for our young people. Given that the scheme will end this month, can my right hon. Friend expand on what the Department will do to support skills and apprenticeships, particularly for young people across Cornwall, so that we can be at the heart of the levelling-up agenda?
Mr Clarke
Spreading opportunity by levelling up our skills base is at the heart of our wider levelling-up White Paper—it is one of the core missions that it sets out. The Government will invest £3.8 billion in skills by 2024-25, which is equivalent to a cash increase of 42% compared with 2019-20. On apprenticeships, I am happy to say that last year more than 3,000 people started apprenticeships in my hon. Friend’s county of Cornwall. We want to see that work continue.
Henry Smith
Over recent months, many young people in Crawley have benefited from the kickstart scheme. In contrast to every Labour Government, which have all left office with unemployment higher than when they started, does my right hon. Friend agree that the way to recovery for our economy and the cost of living is the multi-billion pound plan for jobs that the Government are delivering?
Mr Clarke
My hon. Friend is right about the Government’s record on employment, just as he is right about the Labour party’s record on unemployment. To continue to boost employment, wages and living standards, he rightly references our plan for jobs, which is proving to be an enormous success. In total, the Department for Work and Pensions spend on labour market support will be more than £6 billion over the next three years.
Dr Davies
I recently visited the Dyserth Falls holiday park in my constituency, which is under renovation, to speak with some of the 40 members of the public who have been employed there under the kickstart scheme. Will my right hon. Friend join me in congratulating all those who have taken part in the scheme, especially those who have been given permanent jobs, and set out what ongoing support there will be for those who have completed their placements?
Mr Clarke
As my hon. Friend knows, I know Dyserth very well. In fact, I will be there the weekend after next. I join him in congratulating all those who have taken part in the kickstart scheme, especially those who have secured full-time jobs. Kickstart is, of course, only one part of the wider package of support for young people that is under way. The DWP’s youth offer, which runs until 2025 and is worth £60 million, includes a 13-week youth employment programme, supported youth hubs and, crucially, specialised youth employability coaches.
Alison McGovern (Wirral South) (Lab)
Just in case colleagues in the House did not quite hear the Chief Secretary, he admitted that kickstart has failed. It promised young people 250,000 jobs and got barely half of that. But it is worse than that. The National Audit Office said about kickstart that there was
“limited assurance over the quality of the work placements created by the scheme, or whether jobs created by employers would have existed anyway”.
So in relation to the failed kickstart scheme, what does the Chief Secretary make of the following economic expression: “dead weight loss”?
Mr Clarke
With respect to the hon. Lady, of whom I am a great admirer, that is an unfair characterisation of the success of the scheme. It clearly needs to be situated in the wider context. In fact, the British economy has performed much better than anyone expected when the scheme was set up. There are robust processes in place that make sure that we genuinely are adding additional value. So work coaches have to certify that the people on the scheme are eligible for it and would have been unlikely to find work without it. Employers need to demonstrate how the jobs created are additional. Finally, it is important to contrast this scheme with the last Labour Government’s future jobs fund, which reached its total far more slowly and was far less effective. This scheme has got 130,000 and rising young people into work. It has been a great success.
Peter Grant (Glenrothes) (SNP)
It is interesting that the Minister can call kickstart such a resounding success, given that last month the Public Accounts Committee said that the Department that runs the scheme does not know what success looks like because it launched the scheme without any idea as to what the success criteria would be. It also has no way of knowing whether the young people who are referred to kickstart jobs are the right young people and it is not properly evaluating the longer term support that employers give to those young people. Does the Minister agree with the PAC report, which was endorsed by a Committee consisting of a majority of Conservative MPs?
Mr Clarke
No, I do not agree with that report. It is an unfair characterisation of a response that was put in place at pace to meet an unprecedented crisis in our employment market. The wider success of our policy on youth employment is best measured by the fact that in January there were 500,000 more employees aged under 25 than there were in January 2021. The kickstart programme has played its full part in helping to make that possible.
Gareth Thomas (Harrow West) (Lab/Co-op)
Businesses in the steel industry are more likely to be able to support the kickstart scheme if the Government manage to get Donald Trump’s unfair tariffs of 25% on British steel exports lifted, as the Japanese and the EU have already achieved. Has the Chancellor spoken to the Chief Secretary about this issue, and if not why not?
Mr Clarke
The hon. Gentleman makes a very good point about tariffs. Obviously, the Government believe in free trade and it is something that we want to see happen too. As a Member of Parliament who represents a steel-making constituency, I am keenly aware of this as an issue. The Department for International Trade leads on the issue, and I know that the Secretary of State and her predecessor have had long and ongoing conversations with their American counterparts about getting those tariffs lifted.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
With the scheme failing to attract the numbers that were predicted by over 80,000, will the Minister outline what structure is in place to attract those who have lost out, to ensure that those young people have opportunities to find a life career? Will the new scheme be UK-wide?
Mr Clarke
Youth unemployment is lower today than it was pre-pandemic, and the wider success of the scheme has to be judged in the context that the worst-case scenario that we were looking to offset never came to pass because of the interventions that we made. If a scheme does not achieve the headline numbers that were anticipated at the time it was established because the wider economic performance of the country was so much better than anticipated, that is a success, not something to bemoan.
Carolyn Harris (Swansea East) (Lab)
The Chief Secretary to the Treasury (Mr Simon Clarke)
People are rightly angry that fraudsters stole from covid support schemes, as am I. When the schemes were launched, there was cross-party consensus that we needed speed to protect jobs, and because of our action unemployment peaked at 5.2%, not the 12% predicted at the start of the pandemic. We designed the schemes to prevent as much fraud as possible, and lenders stopped nearly £2.2 billion of potential fraud from the bounce back loan schemes. We continue to take action on multiple fronts to recover money that was claimed fraudulently.
Nia Griffith
It is not just a matter of fraud; it is a matter of incompetence as well. The National Audit Office has been scathing about the UK’s wasteful spending of £37 billion on private contractors to deliver the test and trace system in England, while we in Wales had a more efficient system through partnership with the Welsh Government and local councils. What guidance is the Chief Secretary giving Departments on how to avoid giving such wasteful contracts in the future? Does the guidance include considering, wherever practicable, the delivery of service contracts through public authorities, where any profit remains in the public purse?
Mr Clarke
We always continue to encourage best value, and this is at the heart of all Treasury documents on the use of public money. On the hon. Lady’s point about test and trace, it is very important to reaffirm that the great majority of the costs associated with this scheme were about testing as opposed to tracing, and it was only that scheme that allowed us to come through the enormous challenges of the period, particularly prior to the availability of the vaccine, in a way that allowed our society and our wider economy to keep going to the extent that they could.
Lucy Allan
My right hon. Friend the Chancellor has been incredibly agile in responding to exceptional crises. As he tackles the impact of Putin’s war on our economy, will the Minister take every measure to accelerate growth, including reducing taxes on fuel and energy?
Mr Clarke
As has been discussed earlier in this session, as my hon. Friend rightly highlights, the Government recognise that households do need support with the rising cost of energy. Indeed, the Chancellor has already provided support worth some £9.1 billion for the financial year 2022-23. On her wider point about boosting growth, the Chancellor outlined in his Mais lecture the importance of the Government investing in capital, people and ideas, so that we can strengthen the economy and make sure that the UK is best placed to succeed in what is a challenging set of circumstances.
James Murray (Ealing North) (Lab/Co-op)
Just in the last seven days, we have learned that 7 billion items of personal protective equipment were not fit for purpose, the Government are burning 500 lorryloads of it a month and former Treasury Minister Lord Agnew admitted that the lack of anti-fraud measures in the Government’s covid business support packages meant it was
“happy days if you were a crook”.
When billions of pounds of public money have been lost through the Chancellor’s incompetence, is the Minister ashamed to be hiking taxes on working people by billions of pounds next month?
Mr Clarke
I am afraid the hon. Gentleman misunderstands the situation in regard to PPE. Over 97% of the stock that was ordered was suitable for use. Indeed, when it comes to the wider figure covering the PPE piece, £4.7 billion of that represents PPE that will be used by the NHS, but which was procured at a greater price than it carries today owing to the scarcity that prevailed at that time, and another £3.3 billion represents PPE that can be used in non-medical settings, and the Department of Health and Social Care has already sold and donated stock in this category.
On the wider fraud point, this goes back to my earlier answer that we had to design these schemes at pace to protect jobs—I think this was agreed across the House—and we rightly, I think, made sure that that was the priority. We then built in the protections that were needed, and the protections have made sure that we are able to pursue anyone who has defrauded the taxpayer.
Alison Thewliss (Glasgow Central) (SNP)
Lord Agnew’s evidence to the Treasury Committee last week was a damning indictment of this Tory Government’s “terrible complacency”—his words—about fraud and protecting public money, and he does not buy what the Minister says about working at pace either. Lord Agnew anticipates that there will be an “avalanche of claims” from the banks on the state guarantee of the bounce back loan scheme arriving at the Treasury in the coming weeks, so can the Minister tell the House what actions he is taking to prevent yet further billions of public money from waltzing out the door in the midst of a cost of living crisis?
Mr Clarke
On the hon. Lady’s point, the Government set up the £100 million taxpayer protection taskforce at the Budget back in March 2021, and that taskforce is expected to recover between £800 million and £1 billion from fraudulent or incorrect payments over the next two years. That builds on the work that has already been done, which saw Her Majesty’s Revenue and Customs recover £536 million in 2020-21. Other agencies of the state are also involved in this important work. The National Crime Agency has made 17 arrests, 106 directors have been disqualified as of February 2022, there have been 48 bankruptcy restrictions and 13 companies have been wound up in the public interest in relation to bounce back loans.
Damien Moore (Southport) (Con)
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
My hon. Friend has made an excellent point. He is right to champion the value of apprenticeships, in which the Government keenly believe. I had a great roundtable with apprentices in Newcastle recently, and heard for myself just what a difference they are making both to their employer and to the wider economy.
Owen Thompson (Midlothian) (SNP)
It is estimated that the Chancellor’s smash and grab on national insurance will raise £13 billion. By happy coincidence, at the end of the financial year the Chancellor will have an extra £13 billion-worth of borrowing, because the Government have not met the borrowing expectations. Will the Chancellor use that happy coincidence to scrap the tax on jobs?
National Insurance Contributions Increase
Simon Clarke Excerpts(2 years, 1 month ago)
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The Chief Secretary to the Treasury (Mr Simon Clarke)
The world has been appalled by Russia’s unprovoked, unjustified and illegal invasion of Ukraine. Every one of us has been shocked by the scenes of sheer horror that have unfolded over recent days and moved by the bravery of ordinary men and women defending their country against a merciless enemy. As the Prime Minister wrote at the weekend, the Ukrainians’ valour has helped to unite the international community.
We cannot let down that brave nation in its hour of need, which is why we are calling on the world to join forces and maximise our economic pressure on Putin’s regime. That means going further than the unprecedented sanctions that are already in place, including by working with our allies to further isolate Russia from the international financial system and by expelling more Russian banks from the SWIFT network. The cost of inaction against Putin’s war machine would be too great to contemplate; we have seen the price of appeasement before.
We must brace ourselves, however, for the fact that a robust united global opposition to Russia’s unprovoked aggression will have costs of its own. I am acutely aware that the conflict has economic repercussions that largely stem from a higher global energy price that, over time, may spill over into other commodities including wheat. Those repercussions are being felt across the world, including here at home.
That is why, this financial year and next, we will provide over £20 billion to help the public with the cost of living. That includes over £9 billion of direct support with higher energy costs for about 28 million households, with £200 for every household in Great Britain through the energy bill support scheme and a further £150 for every household in council tax bands A to D in England. In total, that means that about 80% of households will receive £350 of support. That builds on our further support for heating bills including increasing the warm home discount, the winter fuel payment and the cold weather payment, which together provided £2.5 billion to households last winter. The £500 million household support fund has been helping the most vulnerable with the cost of essentials over the past months.
More broadly, we are taking further steps to support people’s finances. We have cut the universal credit taper rate by 8p from 63p to 55p and we have increased the work allowance by £500 a year, which will ensure that nearly 2 million people keep more of what they earn and will put an extra £1,000 a year into their pockets.
Christine Jardine
Does the Minister appreciate that, for Opposition Members and our constituents, and possibly for many of his constituents, that now seems too little, too late and inappropriate for the situation in which the country finds itself?
Mr Clarke
I do not demur; we are faced with a serious challenge on the cost of living. The Government entirely accept that and are working to address it, but we must address it in a smart and financially sustainable way. A £20 billion package is a major commitment to support families across the UK. Of course, we continue to keep all our options under review to ensure that we can act in a way that is commensurate with the severity of the situation.
From next month, we will increase the national living wage by 6.6% to £9.50 an hour for those aged 23 and over, which will benefit more than 2 million workers across the UK by £1,000 a year. We have also frozen fuel duty for the 12th year in a row. That is on top of the help that we are already providing to those on low incomes with their housing costs and council tax bills.
Justin Madders (Ellesmere Port and Neston) (Lab)
On freezing the fuel duty, if the Minister has been to forecourts recently, he will know that the cost of petrol and diesel has gone up tremendously in the last few weeks. What has been the impact on the Treasury’s coffers from VAT receipts as a result?
Mr Clarke
We have forgone a tremendous amount of revenue through the freeze on fuel duty. On VAT, we obviously continue to look closely at the revenue situation. It is sometimes a misapprehension about the way that the VAT scheme works to the Treasury’s benefit. There is often a focus on domestic fuel and the impact that it is having on our income. To that point, the more that people spend of their discretionary income on domestic fuel costs, which are VAT chargeable at 5% as opposed to the full rate of 20%, the less that the Treasury recoups. In that regard, we have to be careful about some of the arguments around that.
Now that I have set out some of the context of the Government’s response, I will return to the specifics of the debate—the need for the health and social care levy and the rationale behind its operation. Last month, my right hon. Friend the Secretary of State for Health and Social Care explained to the House that there is now a significant backlog of elective care as a result of the pandemic, which my hon. Friend the Member for Gloucester (Richard Graham) alluded to. More than 6 million people are waiting for elective care in England and more than 300,000 people are waiting longer than a year. The Government have set out a clear plan to tackle the backlog, but we must deal with that most pressing of issues and the levy will allow us to do that.
Duncan Baker (North Norfolk) (Con)
Many things have happened in the last few weeks, but we must reflect on the fact that, for the last two years, we have been in the worst global health crisis for years during which the Government spent £450 billion to support people’s livelihoods. Any Government would need to look at themselves and recognise the enormous issues that that has created. It is simply unsustainable to continue to pay for services without looking at how we can gain more revenue for the Treasury. That is a sensible financial decision that any Government would have to make in the circumstances in which we find ourselves.
Mr Clarke
I agree with my hon. Friend. The hon. Member for Leeds West (Rachel Reeves) said that when the facts change, we should change our policy, but the point is that the facts have not changed. The covid backlog has not changed and the damage that it has done to our ability to deliver the healthcare that people need has not gone away. Governments have recognised the importance of tackling our social care issues for a long time, but there is no record of action. This time, things are different. We believe that it is only right that in an advanced and wealthy country such as the United Kingdom, people should know that their loved ones will have dignity and financial certainty if they require care. The new levy will allow us to achieve both our health and social care aims.
Dr Caroline Johnson
The hon. Member for Leeds West (Rachel Reeves) talked about politics meaning choices. I have listened carefully to both Front-Bench speeches and I heard that the Opposition want to remove the health and social care levy but not how they will pay for social care instead. Perhaps the Minister heard something I did not. Could he enlighten me?
Mr Clarke
I heard a lot of warm and fairly vague phrases, but I did not hear a concerted plan, and that of course goes to the heart of this question. The hon. Member for Leeds West said in her speech that the voters are smart and savvy, and I agree with her, but they know an Opposition playing politics when they see it.
The £12 billion average annual investment, which is of course a recurring investment—that is the crucial point—to meet a recurring need, will tackle the elective NHS backlog, while ensuring that the health service has the resources it needs over the coming years. It will strengthen our adult social care system, allowing us to invest at least £500 million to give our army of extraordinary social care workers new skills, and it will enable the Government to roll out the long-awaited reforms to funding for families through a cap on adult social care costs.
This is a transformative policy that will tackle serious and long-standing issues, but to fund such a significant increase in permanent spending we have had to make the tough but responsible choice to increase taxes. Only a broad-based tax such as income tax, VAT or national insurance can raise the sums needed for such significant investment. Using NICs as the base has several advantages. First, it means the levy will be paid for by employers, employees and the self-employed, including, from April next year, by workers over state pension age.
Secondly, this is a progressive way to raise funds because those who earn more will pay more: the top 15% of taxpayers will pay half the revenue. A basic rate taxpayer will pay about £3.49 per week, while 6.2 million—6.2 million—of the lowest earners will be exempt entirely from the levy and most small businesses will not be affected at all.
Mr Betts
The Minister talks about health and social care, but will he confirm that there is not a single penny in this extra funding to enable local authorities to cover their social care costs in their budget, which they are struggling with, or to improve the level of the social care they are offering? This crisis has now been going on for years and years, and the Government have promised to fix it. Given that this is a permanent increase in funding, will he also confirm that we are not going to see a tax cut in the next couple of years, just before the election—up today, down tomorrow?
Mr Clarke
On the hon. Gentleman’s point about our support for local authorities, we are giving £1.6 billion extra in each year of the spending review we announced in October to support local authorities with the challenges they face. Of course, the levy will fund £5.4 billion of investment in social care over the next three years, so it is a serious response to a serious challenge.
To return to the advantages of the way we have structured the levy, the third design advantage that stands out is that we have also announced an equivalent increase in dividend tax rates. There is therefore fairness across the spectrum in how this is being paid for.
I know there are some who ask why we need to raise tax at all, and instead say that we should borrow to fund permanent increases in spending. Throughout this speech I have outlined all that the Government have done to protect people’s finances as we recover from the pandemic and deal with the rising cost of living, and those actions mean our economy has made a strong recovery from covid-19. Our GDP has rebounded, and over the past months job vacancies have hit record highs, while the unemployment rate has fallen sharply. However, it is easy to forget that all those steps come at a huge cost. Covid casts a long shadow across our economy. Indeed, our debt is at its highest since the early 1960s. As I have reminded the House on many occasions, that high level of borrowing leaves us susceptible to shocks, including changes in interest rates and inflation.
Dr Caroline Johnson
My right hon. Friend is making some excellent points about the importance of balance in our finances. One thing my constituents will want to know as we spend all this money from the health and social care levy is that it is being well spent and used very efficiently. What can my right hon. Friend tell me about how he will ensure that the money is spent efficiently and with the best possible productivity?
Mr Clarke
Making sure that we spend taxpayers’ money wisely is the central duty of any Government. It is something that, as Chief Secretary, I work very hard on with officials and Departments to make sure that we scrutinise spending in the way that delivers best value.
Some fairly spurious points have been raised about our record on issues such as PPE procurement, and we need to remember what I think could best be described as the brass neck of the Opposition in calling us out on this issue, when I think the hon. Member for Leeds West suggested at one point that we should procure our PPE from historical theatre re-enactment companies or fancy dress companies. Procuring PPE at pace brought with it some inevitable challenges, and it is vital that we had the resources to deal with the situation we faced at the time.
Richard Graham
The debate this afternoon is fascinating in a number of ways. The first one is that the hon. Member for Leeds West (Rachel Reeves) rightly pointed out that Government is about choice. I remember vividly coming into this place in 2010, when the maximum someone could earn before paying tax was £6,000. It is now £12,500, which means £1,000 more in take-home pay for millions of our constituents. My right hon. Friend has confirmed that more than 6 million taxpayers will not be paying anything at all towards the 1.5% increase in national insurance, which will pay for their families’ and their parents’ hospital care and social care.
Mr Clarke
I entirely agree with what my hon. Friend has said, and it is a reflection of the fact that we have taken sensible measured steps against what has been a recurring series of unprecedented challenges—the financial crisis, our exit from the European Union, covid, and now the backdrop of conflict in Ukraine. All these things have had a major impact on the world around us, but our focus has consistently been on supporting people to do the right thing and to protect their finances.
Sir Oliver Heald
Does my right hon. Friend agree that the rise in the national living wage should not be ignored and is important in helping people at the bottom of the income spectrum? It is right to take such measures, but the Opposition’s asking for more money the whole time but not being prepared to put in any resource is a ridiculous smoke and mirrors job.
Mr Clarke
It is, and my right hon. and learned Friend is precisely right because, in the end, it is poorest who will lose out the most if we lose control either of our public spending or of inflation. To illustrate, a 1 percentage point rise in both inflation and interest rates would increase spending on debt interest by nearly £23 billion a year, and that threat is not a notional one. In January 2021 we spent £1.6 billion on servicing our debt, but in January this year we spent £6.1 billion. We cannot fund increases in spending on our health service and social care by increasing borrowing. Members will surely agree that to leave ourselves vulnerable at this time by further increasing our debt burden would be highly irresponsible. These are not always easy choices, but we will be the ones to reconcile the need to reduce our debt burden with the growing pressures on the state, and that means responsible choices about taxation.
Mr Clarke
I have given way many times, and I am afraid that I must make progress.
The Opposition claim that they would instead grow the economy to finance their choices. With all due respect to the hon. Member for Leeds West, that is not a credible solution to an immediate problem. I remind the House that this is the same Opposition who want to place a windfall tax on our vital North sea oil and gas producers—companies that already pay a headline tax rate on their profits of more than double the rate of corporation tax. With investment in the sector hitting an all-time low in 2020-21, such a tax on oil and gas would not be an appropriate solution. It would only create uncertainty, deter investment and displace the investment that we need in clean, renewable technologies.
As the Chancellor has recently set out, we firmly believe in lower taxes. The pounds generated by our country are better spent by individuals and businesses than by Government. However, cutting tax sustainably requires hard work and prioritisation, especially when demands on the state are growing. We must reach our goals in a responsible way that addresses our challenges, too. This levy is the best and most equitable way to raise the funds needed to protect health and social care across the United Kingdom, and I await any credible explanation from the Opposition of how they plan to cover these costs in a responsible way.
I will end by saying that this Government recognise the difficulties that people across this country are facing right now. We know times are hard, and we are working hard to alleviate that pressure, but as a responsible Government we must not shy away from difficult decisions. It is only by meeting such challenges head-on that we will succeed in building a health and social care system that is fit for the future and that truly supports our citizens at every stage in their lives.
Several hon. Members rose—
Public Service Pensions and Judicial Offices Bill [Lords]
Simon Clarke ExcerptsTuesday 22nd February 2022
(2 years, 2 months ago)
Commons ChamberRead Full debate Public Service Pensions and Judicial Offices Act 2022 View all Public Service Pensions and Judicial Offices Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 22 February 2022 - large print - (22 Feb 2022)
The Chief Secretary to the Treasury (Mr Simon Clarke)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
New clause 1—Guidance to public service pension scheme managers on investment decisions—
“(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) In schedule 3, paragraph 12(a), at end insert ‘including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy’.”
This new clause would enable the Secretary of State to issue guidance to those authorities that administer public sector pension schemes, including the local government pension scheme, that they may not make investment decisions that conflict with the UK’s foreign and defence policy.
New clause 2—Investment decisions in funded schemes—
“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) After sub-paragraph (3) insert—
‘(3A) Scheme regulations must require an authority’s investment strategy to ensure that investment decisions are consistent with the Glasgow Climate Pact 2021.’”
This new clause would require public sector pensions schemes to ensure future investments are consistent with the climate science, ambitions and timeframes agreed at the COP26 UN Climate Summit.
New clause 3—Investment decisions in funded schemes: fossil fuel assets—
“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) After sub-paragraph (3) insert—
‘(3A) Scheme regulations must require the fund to have removed all investment in fossil fuel assets by 2030.’”
This new clause would require public sector pensions schemes to disinvest from fossil fuels by 2030, by removing fossil fuel assets from their investment portfolios, securities transactions and balance sheets.
New clause 4—Review of the impact of this Act on fairness—
“(1) The Chancellor of the Exchequer must commission a review of the impact of this Act on fairness to members in receipt of pensions to which this Part applies.
(2) The Chancellor of the Exchequer must prepare and publish a report on this review within six months of the passage of this Act and must lay a copy of the report before Parliament.
(3) The review under subsection (1) must include an assessment of the impact of the provisions of this Act on women.
(4) The review under subsection (1) must make recommendations as to whether further legislation should be brought forward by the Government to close the public service pensions gap between men and women.”
This new clause would require the Government to report on the impact of this Part on fairness, especially with regards to women.
New clause 5—Guidance—
“(1) Within six months of the passage of this Act the Chancellor of the Exchequer must lay before Parliament a copy of guidance to members of pension schemes affected by this Part.
(2) The purpose of the guidance under subsection (1) is to ensure members are able to make informed choices about their pensions.
(3) The Government must provide a free helpline or online service which members can use to receive further guidance about their pension.
(4) Within six months of the day on which the guidance is published the Government must lay before Parliament a report on its effectiveness in achieving the purpose in subsection (2).”
This new clause would require the Government to publish guidance to members of pension schemes affected by this Part and allows for provision of a helpline or online service to offer further assistance.
New clause 6—Impact on the recruitment of new holders of judicial offices—
“(1) Within 12 months of the passage of this Act the Government must commission an evaluation of the impact of this Act on recruitment of new holders of judicial offices and on the diversity of the judiciary.
(2) The Chancellor of the Exchequer must prepare and publish a report on this evaluation and must lay a copy of the report before Parliament.”
This new clause would require the Government to publish an annual update on progress on recruiting new members to the judiciary and increasing diversity.
New clause 8—Compensation of losses incurred by closure of legacy schemes—
“(1) The Chancellor of the Exchequer must review how a loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—
(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, and
(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme
could be compensated.
(2) The Chancellor of the Exchequer must prepare and publish a report on this review within two months of the passage of this Act and must lay a copy of the report before Parliament.”
This new clause would require the Government to review how losses arising from the “pension trap” could be compensated, and to report on the review within two months of the passage of the Act.
New clause 9—Equality impact analysis of provisions of this Act—
“(1) The Chancellor of the Exchequer must review the equality impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passage of this Act.
(2) A review under this section must consider the impact of those provisions on—
(a) people with protected characteristics (within the meaning of the Equality Act 2010), and
(b) the Government’s compliance with the public sector equality duty under section 149 of the Equality Act 2010.
(3) A review under this section must include a separate analysis of each separate measure in the Act, and must also consider the cumulative impact of the Act as a whole.”
This new clause would require the Government to review the equality impact of the provisions of this Act, and to report on the review within six months of the passage of the Act.
New clause 10—Report on losses incurred by closure of legacy schemes—
“The Chancellor of the Exchequer must consult with the relevant trade unions and other bodies representing pension scheme members and report within 6 months of the passage of this Act on the options available for addressing in a non-discriminatory manner any loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—
(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, but
(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme.”
This new clause would require the Government to consult with the trade unions and other bodies representing members of the pension schemes who are affected by the “pensions trap” and to report on the options available to address this issue without causing discrimination.
Government amendments 1 to 17.
Amendment 24, in clause 92, page 67, line 39, leave out paragraph (c) and insert—
“(c) leave out paragraph (c).”
This amendment removes from the calculation of the employer cost cap the effect of changes in the cost of connected schemes, including the cost of rectifying the unlawful discrimination.
Amendment 22, page 67, line 39, leave out paragraphs (c) and (d).
This amendment removes from the Bill the amendment to Section 12 of the Public Service Pensions Act 2013 that would allow Treasury directions to determine whether the cost control mechanism would operate.
Amendment 23, page 70, line 27, leave out clause 93.
Government amendments 18 to 21.
Mr Clarke
It is a pleasure to open this debate. I wish briefly to remind Members why this is such an important piece of legislation that we must ensure we get right. Our public servants provide vital services on which we all rely and their unwavering commitment has been particularly vital during the covid pandemic. We have an obligation to continue to provide guaranteed pension benefits to reward those workers for their dedicated service, and must do so on a fairer basis and in a way that ensures that pensions are affordable and sustainable in future.
Let me turn to the amendments that I have tabled, which are largely technical ones to ensure the Bill works smoothly. New clause 7 makes it possible for the judicial pension scheme 2022 regulations to be subject to the made affirmative procedure rather than the draft affirmative procedure, which is the usual process for judicial scheme regulations. The Bill closes all current judicial pension schemes to future accrual on 31 March this year, so the change is necessary to ensure that the new pension scheme is in place for all judges on 1 April. There will therefore be no gap in judicial pension arrangements.
The provision in the new clause is an exceptional use of the made affirmative procedure in respect of judges’ pensions. It is limited to scheme regulations for the judiciary that are made within 28 days of Royal Assent, so it will be used only to make the judicial pension scheme 2022 regulations. It will not apply to any other public service pension schemes, which are generally made under the negative procedure, nor will it apply to any future amendments to judicial pension schemes.
The remainder of the amendments that I have tabled are minor and technical, with the aim of ensuring that the Bill is applied effectively and consistently. Amendment 19 relates to the commencement provision and simply ensures that different provisions in the Bill can come into force at the appropriate time.
Amendments 1 to 14 simply clarify the wording in various clauses in chapter 1. Together, the amendments give schemes the flexibility to implement the prospective and retrospective remedy in the way that is most efficient for their members.
Amendment 16 ensures that the remedy applies correctly to local government scheme members who were formerly members of other public service pension schemes. In particular, it makes sure that former members of other schemes are not disadvantaged because they previously participated in a scheme with a lower normal pension age.
Amendment 17 provides that the power under clause 81 for local government new scheme regulations to make provision regarding special cases must be exercised in accordance with Treasury directions issued by either Her Majesty’s Treasury or the Department of Finance in Northern Ireland.
On judicial offices, amendment 18 changes the extent of schedule 3 to ensure that if Welsh Ministers or the Department of Justice in Northern Ireland make subsequent changes to the list of devolved offices in schedule 3 using the power conferred on them by clause 125(1), incorrect text will not remain in statute in other parts of the United Kingdom.
Amendments 20 and 21 change a reference to the Special Educational Needs Tribunal for Wales to its new title, the Education Tribunal for Wales, thereby ensuring that a relevant sitting in retirement office is created in the Education Tribunal for Wales.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The pandemic has underlined the contribution made by the public sector workforce to this country. Public sector workers do so much to keep us all safe. Our brave doctors and nurses and those in the police, fire service and other public service professions deserve security and a high standard of living in retirement, so it is so important that the Government provide decent pensions on a fair and equal basis.
As the Minister knows, we welcome the Bill’s main provisions, and particularly the attempt to bring in a remedy in respect of the discrimination against younger members of the new pension schemes established by the coalition Government between 2014 and 2016. We also strongly support the introduction of reformed scheme-only design, which will mean that the cost of the legacy schemes will no longer be included in the cost control mechanism, along with the Government’s proposal to widen the margin of the cost corridor from 2% to 3% of pensionable pay. Those changes will provide greater certainty for members and for the taxpayer.
However, the Minister will not be surprised to hear that we have a number of concerns about the Bill. It is wide ranging and several Members have tabled amendments. I have a limited amount of time, so I will focus on the Opposition Front-Bench team’s primary concerns about the Bill and speak to the amendments that I have tabled on the Opposition’s behalf to address them.
First, I wish to highlight the concerns of public sector employees and trade unions about the lack of clarity on how the remedy, which I remind the House is estimated to cost around £17 billion, will impact the future value of members’ pension schemes. In the Committee debate on 27 January, the Minister stated that
“no member benefits will be cut and no member contribution rates will increase as a result of the 2016 valuations.”––[Official Report, Public Service Pensions and Judicial Offices Public Bill Committee, 27 January 2022; c. 10.]
That commitment is welcome but, as the TUC and others have said, it does not address the question of whether the remedy will be included in future valuations of the cost control mechanism.
Were the cost to be included at a later date, members could see their benefits cut and their contribution rates increase. I remind the House that the Public Accounts Committee warned that such an outcome would be fundamentally unjust as some of the cost of the Treasury’s £17 billion mistake would be passed on to members. Will the Minister please clarify whether the estimated £17 billion cost of the remedy will be included in the valuations of pension schemes under the cost control mechanism at some later date?
Secondly, I wish to discuss the Government’s proposal to introduce a so-called symmetrical economic check to the cost control mechanism. As the Minister will be aware, many public sector workers and their representative organisations believe that the proposals break the Treasury’s 25-year guarantee that no further fundamental reforms would be made to public service pensions following the 2011 settlement with trade unions. The Minister told us in Committee that
“the Government do not believe that the reforms breach that guarantee.”––[Official Report, Public Service Pensions and Judicial Offices Public Bill Committee, 27 January 2022; c. 36.]
However, I found a press statement issued by the Treasury on 20 December 2011 that makes it clear that the guarantee covered significant reform to the cost control mechanism, and the Paymaster General in the Conservative Government at the time said that it represented a “settlement for a generation”.
Does the Minister recognise that his Government’s proposal for an economic check risks undermining the Bill’s purported aim of restoring public service workers’ faith in their pension schemes? The National Education Union, the TUC and PRS have all warned that the proposals unfairly penalise pension scheme members for public sector pay constraint and lower-than-expected life expectancy. In practice, this will likely mean that any downwards breach of the cap will trigger the economic check. It seems the economic check is unfair, so will the Minister now accept that the Government must go back to the drawing board and rethink their proposals? I will be grateful if he addresses that issue.
Chris Stephens
I will be brief, having been on the Bill Committee. First, I should probably declare that I am a member of the Scottish local government pension scheme. I have always taken the view that a pension is deferred pay. In the past few weeks, university lecturers have taken industrial action because of the threats to their pension schemes; I have been very proud to visit their picket lines and offer my solidarity and support.
I wish to raise a couple of issues. I view new clause 1 as a Trojan horse. The main points that I want to raise are my support for the amendments tabled by my good friend the right hon. Member for Hayes and Harlington (John McDonnell), and the effects on employees and workers. In Committee, the Chief Secretary assured me that discussions were ongoing with trade unions to fix the issues. I hope that he will update the House on any discussions that have taken place since then and on the progress of those talks.
A basic principle that has been identified in relation to many of the amendments is that workers should not be penalised financially for mistakes that have been made in calculations by the Government or employers. It is a clear principle for many of us on the Opposition Benches that no worker should be penalised for such mistakes and that their pensions should not be affected. I therefore support the Opposition amendments in that regard.
Mr Simon Clarke
I thank all right hon. and hon. Members who have spoken today. I appreciate the constructive way in which all Opposition parties have handled the Bill. Today’s debate has focused on several important themes, which I will address in turn.
One central theme was the clarification requested by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and other Members about whether the estimated £17 billion cost of remedy will be included in future valuations of the cost control mechanism for unfunded schemes. The answer, definitively, is that it will not. The Government will reform the cost control mechanism to a reform scheme-only design for future valuations. I hope that that reassures the House.
Mr Clarke
Very briefly, but I am conscious of the need to make progress.
John McDonnell
I just need the Minister to say that it will be an employer cost, not a member cost.
Mr Clarke
The cost of remedy sits with the employer, namely the Exchequer.
John McDonnell
Let us be absolutely explicit. With regard to the cost control mechanism, is it the case that this will be not a member cost but an employer cost? Just nod, Minister: that is all you have to do.
Mr Clarke
I will ensure that it is on the record.
My right hon. Friend the Member for Newark (Robert Jenrick) raised the important issue of guidance for the local government pension scheme which will, in effect, prevent bodies from engaging in boycotts, divestment and sanctions activities. In our manifesto, we committed ourselves to stopping public bodies running their own direct or indirect boycotts, and the wider BDS movement. I am grateful to my right hon. Friend for the all the hard work that he has done to draw the House’s attention to this important issue. I also pay tribute to Lord Pickles for his work.
Mr Clarke
I am sorry, but I must make progress.
The Government have been paying particular attention to the arguments that my right hon. Friend has put forward, and I assure him that we take this issue very seriously.
The BDS movement has nothing to do with pensions and everything to do with politics. It has had the chilling effect of legitimising antisemitism among the hard left, leading to kosher food being taken from supermarket shelves, Jewish films being censored, and the disgusting spectacle of Jewish university student societies being threatened with bans.
Paula Barker
I thank the Minister. He has been very generous. Can he confirm that new clause 1 has nothing to do with BDS, a point to which you alluded, Madam Deputy Speaker?
Mr Clarke
On the contrary, it has everything to do with BDS, because, rather than promoting co-existence, debate and dialogue, it sows hatred and alienation. There is evidence of divisive BDS campaigns in public bodies, including too many Labour-led local authorities attempting to declare boycotts. Only this week we saw concerning, but sadly unsurprising, reports of a councillor in Wirral leading demands for Wirral’s pension committee to pass a BDS motion. Even under the leadership of the new Leader of the Opposition, Labour politicians continue to endorse the Palestine Solidarity Campaign and call for boycotts of Israel.
Andrew Percy
I thank the Minister for confirming that the new clause does indeed have everything to do with BDS—as it should, because it is an important contribution to making Jewish people in this country feel safe. I am afraid that we heard some embarrassing comments from Opposition Members earlier, featuring the false narrative of “Everything good is always on the left, and everything bad is always on the right.” As the Minister says, we see Labour activists and Labour councillors endorsing what is a fundamentally antisemitic campaign. I thank him for his words today, and I hope the Government will accept the new clause, because it is so important to fighting the scourge of antisemitism.
Mr Clarke
I thank my hon. Friend for what he has said, and I can confirm that we will be accepting the new clause. It will have the Government’s support this afternoon.
The hon. Member for Edinburgh West (Christine Jardine) raised a number of important points, but I will deal first with her new clause 4, which relates to fairness for members of public service pension schemes. This is also relevant to the point raised by the hon. Member for Hampstead and Kilburn.
Let me begin by reassuring the hon. Member for Edinburgh West that equal treatment and fairness for all members, including those with protected characteristics, remains a central tenet of the Bill. The Government have conducted a full equalities impact assessment of the Bill, which was published when it was introduced. In addition, when making the necessary changes in the scheme rules to deliver remedy, bodies will carry out any appropriate equalities analysis for their specific schemes, in compliance with the Equality Act 2010. Indeed, many schemes are currently concluding public consultations on the changes in scheme regulations to implement the prospective remedy. The Government intend that a similar exercise will take place when it comes to schemes making further changes in their scheme regulations to implement the retrospective remedy, prior to 1 October 2023.
The Bill also provides that, from 1 April 2022, all public service workers who remain in service will do so as members of the reformed schemes, which provide career average, or CARE, benefits. CARE schemes offer fairer outcomes to those who experience lower salary progression over the course of their careers. A number of women and those with other protected characteristics are likely to be better off under CARE schemes, on average. Moving on to guidance for members, I wholly agree that clear, accessible and accurate guidance—
Tulip Siddiq
I am grateful that the Minister is answering all the questions that I posed in my speech, but I want to go back to the question that my right hon. Friend the Member for Hayes and Harlington (John McDonnell) asked. The Minister has said that he will write to us. Can he write both to me and to my right hon. Friend, and can he be explicit that this will be not a member cost but an employer cost? Can he confirm that he will be explicit when he writes to us on that particular point?
Mr Clarke
The cost sits with both members and employers, but the liability rests with the Exchequer in relation to the £17 billion cost of remedy. That is how this sits. I will indeed commit to writing to clarify all these points, and I will write to the hon. Lady and the right hon. Gentleman.
Judicial diversity and recruitment were the next issues raised by the hon. Member for Edinburgh West. I emphasise that this is an important measure for ensuring that we deal with the covid backlog in our courts, which is why we need to look at raising the mandatory retirement age. We are conscious of the need to consider the wider issues around judicial diversity and to ensure that we have a judiciary that is truly representative of the public that it serves. The Ministry of Justice publishes annual official statistics on this issue that provide a detailed annual picture.
I would like to assure members that the potential impact of what is being done is small. Compared with retaining the current mandatory retirement age of 70, a higher retirement age is projected to result in a 1% to 3% decrease in diversity growth in the medium to long term. I emphasise the word “growth” there. Overall, judicial diversity is still forecast to improve, and this measure would not reduce diversity overall. There would be only a slight reduction in the trend growth, which is going in a positive direction. We remain committed to increasing judicial diversity, and we have just launched an ambitious new magistrates recruitment plan to bring in younger and more diverse candidates. The MOJ plans to recruit 1,000 judges a year over the next few years, and 4,000 magistrates over that period. There will be a lot of change to the make-up of the judiciary.
The so-called pensions trap—the losses incurred by public service pension scheme members due to the closure of the legacy schemes—has been discussed at length throughout the passage of the Bill. The new clauses tabled by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and the right hon. Member for Hayes and Harlington appear to be intended to require the Chancellor to devise a way to compensate scheme members with remediable service for any reduction in future pension benefits resulting from the prospective McCloud remedy legislated for in clause 80. As I have noted, it is important to stress that the Government must not take action that would be contrary to the intention of the Bill to remove the discrimination identified by the courts and to ensure that all members are treated equally from 1 April this year by accruing service regardless of their age.
The Government must also safeguard the purpose of the reforms proposed by Lord Hutton and ensure that public service pension schemes are put on a sustainable fiscal footing. The Independent Public Service Pensions Commission stated that
“allowing current members to continue to accrue further benefits in the present schemes for many decades would be unfair and inequitable to the new members coming behind them.”
Compensating or carving out members with remediable service for the difference in pension age between their legacy and reformed schemes would effectively leave a protected class of public service pension scheme members beyond 31 March 2022, which could perpetuate the discrimination identified by the courts or give rise to new discrimination. It is worth noting that the Home Office is looking at this issue as we speak and will respond to its full consultation, in which the issue has been considered at greater length. I look forward to seeing the results of its work.
I turn to the contribution from the right hon. Member for Hayes and Harlington on the reforms to the cost control mechanism. The cost control mechanism is designed to ensure a fair balance of risk between public service pension scheme members and taxpayers with respect to the costs of the schemes. These reforms resulted from recommendations by the Government Actuary, and the Government are seeking to implement them following a full public consultation process. They are the reformed scheme-only design and the economic check. The economic check is essential to ensure stability and consistency across the scheme. It is also important to improve the higher bar for benefit reductions or contribution increases if the country’s economic outlook changes.
On the point about the 25-year guarantee, the Government do not believe that these reforms breach that guarantee. The elements protected by the 25-year guarantee were set out in legislation, and the cost control mechanism is not included there. The Government are making these changes following a detailed review of the mechanism by the Government Actuary and a full and open consultation process.
Amendments 22 to 24, tabled by the right hon. Member for Hayes and Harlington and the hon. Member for Hampstead and Kilburn, seek to reverse two decisions. The first reflects the cost of remedies in the mechanism of the 2016 valuation, and the second prevents the waiving of any ceiling breaches of the 2016 valuations that may occur. As I have already noted, the cost control mechanism is designed both to protect the value of schemes to members and to protect the Exchequer from unforeseen costs. At each scheme valuation, the mechanism assesses the benefits that have accrued and are accruing to members, to determine whether future benefit levels or member contribution rates need to be adjusted to meet the costs of the scheme.
The Government are clear that the remedy, by giving eligible members a choice between two sets of benefits, will increase the value of schemes to members, and this increase in value has therefore rightly been included in the mechanism for the 2016 valuations. The Government have decided that it would be inappropriate to reduce member benefits based on a mechanism that may not be working as intended, and clause 93 will therefore ensure that no member’s benefits will be cut or contribution rates increased as a result of the 2016 valuations.
Amendment 23, which would delete clause 93, would therefore reverse a decision that will protect members and would lead to significant cuts to member benefits for any schemes that breach the ceiling of the 2016 valuations. It is therefore important that clause 93 is preserved.
I am grateful to all hon. and right hon. Member for their contributions. With the exception of new clause 1, I hope I have demonstrated the reasons why I cannot accept these new clauses and amendments, and I hope hon. and right hon. Members will agree not to press them to a vote.
Question put and agreed to.
New clause 7 accordingly read a Second time, and added to the Bill.
New Clause 1
Guidance to public service pension scheme managers on investment decisions
‘(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) In schedule 3, paragraph 12(a), at end insert “including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy”.’—(Robert Jenrick.)
This new clause would enable the Secretary of State to issue guidance to those authorities that administer public sector pension schemes, including the local government pension scheme, that they may not make investment decisions that conflict with the UK’s foreign and defence policy.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Simon Clarke
I beg to move, That the Bill be now read the Third time.
I would like to make a short statement about our involvement with the devolved Administrations. Officials worked closely and collaboratively with the devolved Administrations throughout the Bill’s passage, and I am pleased to report that the Scottish Government, the Welsh Senedd and the Northern Ireland Assembly have each passed a legislative consent motion. I am grateful for their continued engagement.
It has been a great pleasure to lead on the Bill’s progression through the House. I extend my thanks to hon. Members across the House for their engagement, particularly of course the members of the Public Bill Committee. This is an important Bill that consolidates and strengthens the legal framework for pensions across all our main public services—the NHS, the judiciary, the police, firefighters, the armed forces, teachers, local government and the civil service. The Bill will ensure that those who deliver our public services continue to receive guaranteed retirement benefits that are among the best available on a fair and equal basis.
The Bill also addresses the resourcing challenges facing the judiciary, recognising the unique constitutional role of judges. It is clear that we are agreed across the House about the principles of fairness and equal treatment for public servants. Furthermore, a number of important amendments have been made, most notably to the provisions that cater for local government workers, which I am pleased have enjoyed cross-party support.
I extend my thanks in particular to my right hon. Friend the Member for Newark (Robert Jenrick), my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the hon. Member for Hampstead and Kilburn (Tulip Siddiq), the right hon. Member for Hayes and Harlington (John McDonnell) and the hon. Member for Glenrothes (Peter Grant) for their detailed engagement throughout the Bill’s passage. I also convey my gratitude to the noble Lords in the other place, whose excellent contributions have helped ensure the Bill is as robust as possible.
Finally, I thank the Bill team, the Office of the Parliamentary Counsel, officials across Her Majesty’s Treasury, the Ministry of Justice, the Department for Levelling Up, Housing and Communities, all Government Departments with responsibilities for public service pension schemes, and the devolved Administrations for their extensive support. There is a lot of technical detail in the Bill, and the team’s guidance and expertise has been exemplary.
Sir Robert Buckland (South Swindon) (Con)
Will my right hon. Friend give way?
Sir Robert Buckland
On a point of technical detail, I do not wish to put my right hon. Friend on the spot, but can he assure me that early commencement provisions will be brought into effect with regard to the judicial retirement age matters? It is a matter of real public importance that we bring those measures into force as soon as possible, rather than waiting for the usual two-month gap between Royal Assent and them coming into effect? Can he give me that assurance?
Mr Clarke
Further to my opening speech, I can confirm that that is the case.
In conclusion, this Bill recommits to the principle of greater fairness between lower and higher earners and for the taxpayer, as well as the future sustainability and affordability of public service pensions. I am pleased to see the Bill reach Third Reading, and I am grateful to all Members for their contributions today.
Treasury
Simon Clarke Excerpts(2 years, 2 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Simon Clarke
We know that young people have been disproportionately affected by the pandemic. I am delighted that, to date, more than 122,000 kickstart jobs have been started by young people across Great Britain, including in the constituency of my hon. Friend the Member for Gedling (Tom Randall). Youth unemployment fell by 11.1% in the three months to November 2021 and is lower than it was prior to the pandemic, and in December there were half a million more employees aged under 25 than in December 2020.
[Official Report, 1 February 2022, Vol. 708, c. 136.]
Letter of correction from the Chief Secretary to the Treasury:
An error has been identified in the answer I gave to my hon. Friends the Members for Gedling (Tom Randall) and for Devizes (Danny Kruger).
The correct information should have been:
Mr Simon Clarke
Youth unemployment fell to 11.1% in the three months to November 2021 and is lower than it was prior to the pandemic, and in December there were half a million more employees aged under 25 than in December 2020.
Oral Answers to Questions
Simon Clarke Excerpts(2 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Hunt (Ipswich) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
As my right hon. Friend the Chancellor has announced, we are increasing the national living wage to £9.50 an hour for workers aged 23 and over from this April. That means a pay increase of £1,000 a year for a full-time worker earning the national living wage, and keeps us on track to meet our target to end low pay by the financial year 2024-25. As we have heard, we have taken further decisive action by cutting the universal credit taper rate and increasing the universal credit work allowances.
Tom Hunt
When it comes to high-paid jobs in the Ipswich area, Freeport East has generated great interest. However, my constituents are keen to see meat on the bones, and for that exciting principle to become a reality. Currently, the plan is to put in the full business case this April. Clearly, that is a most exciting prospect, being near to Ipswich. Will my right hon. Friend give me a firm guarantee that rocket boosters will be put under the plans, to ensure that the benefits of Brexit and the benefits of the freeport can be realised for my constituents as soon as possible?
Mr Clarke
I thank my hon. Friend for his question. In the week that we announced the Brexit freedoms Bill, that is a really good example of why our decision on the Government Benches to honour the people’s decision to leave the European Union was the right one, and why the Labour party was so wrong to oppose it. The Prime Minister was at Tilbury only yesterday to identify the benefits of freeports, and I can reassure my hon. Friend that we are putting rocket boosters under this policy, for the benefit of places like Ipswich.
Sammy Wilson (East Antrim) (DUP)
Does the Minister agree that some of the ways in which low-income families could be helped would be to drop the national insurance increase, which is wiping out part of the increase in the national living wage anyhow, and to drop many of the green levies, which have a massive impact on electricity bills—up to 20%?
Mr Clarke
I thank the right hon. Gentleman for his question. He knows the high regard that I have for him. I do, however, respectfully disagree with him on these points. There is no other responsible way for us to finance the 9 million more checks, scans and operations that the health and social care levy will unlock than through a broad-based tax increase, which is highly designed to ensure that we protect vulnerable families, so that the 6 million lowest-paid will pay no extra tax at all as a result of the levy.
When it comes to the green levies, it is worth noting that we have reduced our reliance on natural gas, as a country, by 26% since 2010. That is saving taxpayers now, in an era of ultra-high gas prices. It is also worth noting that clean technologies are now the cheapest form of new energy to procure—cheaper than new gas.
Mr Richard Holden (North West Durham) (Con)
Lower-paid, and especially young part-time workers, do not currently benefit from tax relief or employers’ contributions towards pensions under the auto-enrolment scheme. Will the Minister speak to colleagues across Government to look at extending auto-enrolment to lower-paid workers, to ensure that they get the long-term benefits?
Mr Clarke
My hon. Friend has campaigned consistently on this theme. I would certainly be very happy to have further discussions with him about it. It is worth noting, and celebrating, the fact that the proportion of people who are in low-paid work is actually at its lowest since records began in 1997.
Geraint Davies (Swansea West) (Lab/Co-op)
The Trussell Trust finds that three out of four referrals are disabled people, and the Office for National Statistics finds that people who work online at home are more likely to work longer and not retire early, particularly if they are disabled. So will the Chancellor, the Treasury and the Minister look at the idea of promoting working from home after the pandemic, to help enable people with disabilities and other people to be more productive, and at the same time target more support for those in greatest need, as we have found from the Trussell Trust?
Mr Clarke
I thank the hon. Gentleman for his question, and for the spirit in which he asks it. Over the course of the spending review we are investing £1 billion in disability-related programmes, and that is an aspect that I am happy to look at further. More broadly, the Government as a whole spend £58 billion a year on wider disability support, so we certainly take that area very seriously.
Mr Philip Hollobone (Kettering) (Con)
Some of the lowest-income households are made up of pensioners, and important extra help for the most vulnerable is already available and budgeted for through pension credit, yet up to 1 million people—including, potentially, 4,500 pensioners in north Northamptonshire—are failing to claim up to £1.8 billion in pension credit. Please will the Government do more to promote the take-up of pension credit?
Mr Clarke
My hon. Friend raises an important point. The state pension and pension credit are rising by 3.1%, which is helping to protect more than 12 million pensioners from cost of living increases. It is vital that people get the help to which they are entitled. If any Member has any practical suggestions to bring to our attention, we will happily look at those, and I will task officials to make sure that we are doing all we can.
Tim Farron (Westmorland and Lonsdale) (LD)
Danny Kruger (Devizes) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
We know that young people have been disproportionately affected by the pandemic. I am delighted that, to date, more than 122,000 kickstart jobs have been started by young people across Great Britain, including in the constituency of my hon. Friend the Member for Gedling (Tom Randall). Youth unemployment fell by 11.1% in the three months to November 2021 and is lower than it was prior to the pandemic, and in December there were half a million more employees aged under 25 than in December 2020.
Tom Randall
I recently visited Severn Trent Water in Gedling, and staff told me how impressed they were with the kickstarters that the company had taken on. Can my right hon. Friend assure me that he is working hard to encourage more companies and organisations to get involved in the kickstart scheme, to get even more people back into work?
Mr Clarke
I completely agree with my hon. Friend. Kickstart is delivering valuable jobs and work experience to young jobseekers at risk of long-term unemployment. Although kickstart closed to new applications on 17 December, we are genuinely delighted at the response from employers. As I noted, more than 122,000 kickstart jobs have been started so far, and we expect more between now and the end of March. Employers should continue to engage with Department for Work and Pensions jobcentres and support the new way to work campaign to get more people into work.
Danny Kruger
In my constituency, 130 new jobs for young people have been created. A group of young people started this week at Ball Aerocan in my constituency. The company is very pleased with the scheme and the young people it found but said it took a little while to get through the system. What can the Government do to encourage businesses to make use of the scheme before it ends in March?
Mr Clarke
My hon. Friend is absolutely right that we want to encourage maximum uptake. Kickstart is only one part of the comprehensive package of support available to young people and, following the closure of this scheme, young jobseekers will still be able to benefit from the DWP’s wider youth offer, while work coaches across the country are working to support young people into jobs.
Matt Western (Warwick and Leamington) (Lab)
Young people who lost jobs during the pandemic have returned to less secure jobs, typically gig economy roles. The Resolution Foundation report published yesterday showed that one third of 18 to 34-year-olds who have returned to work have returned to atypical, insecure jobs. Almost 18 months ago, the Chancellor launched his kickstart programme, setting a target of 250,000. The Minister has said how many have found jobs, but, on the evidence of the Resolution Foundation report, those jobs just are not there and they are typically insecure.
Mr Clarke
I am afraid the hon. Gentleman confuses what he is talking about. The fact that we have not hit the target is precisely a reflection of the fact that the wider economic recovery has been so strong. It is a measure of the success of the wider recovery that we simply do not need to offer those opportunities and that the regular economy is generating them.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I have heard from so many on the Government Benches how good the kickstart scheme is. It has huge potential, but I keep telling the Treasury Bench to get their finger out and get on with it. It needs to be bigger and better; it must be linked to green skills and real opportunities for getting young people to roll up their sleeves and work in the community. It could be backed by a windfall profit tax on supermarkets and others, or on the gambling industry. Get on with it!
Mr Clarke
We are getting on with it. I remind the hon. Gentleman that when we compare the scheme to the last Labour Government’s future jobs fund, we see that we have already comfortably exceeded the number of young people it supported into work. Those are good, well-paying jobs in sectors that, he rightly highlights, are some of those of the future.
Kate Hollern (Blackburn) (Lab)
The Chief Secretary to the Treasury (Mr Simon Clarke)
I will comment specifically on some of the fraud relating to Government economic support schemes put in place during the pandemic. My colleagues and I share the anger and frustration of hon. Members across this House and of people across this country that schemes designed to help businesses to get through an unprecedented crisis were exploited by a minority. We rightly placed an emphasis on speed when introducing those schemes, but we will robustly pursue anyone who has taken advantage of the Exchequer.
Kate Hollern
I welcome the Minister’s response, but does he realise that people in Blackburn are really concerned about our cost-of-living crisis? They have a right to expect this Government to be prudent with the public purse, but what they find is that this Government simply do not operate under normal rules. They have hit working people and ordinary businesses with tax rises, yet wasted billions of pounds on contracts, fraud and outsourcing. Does the Minister accept that people should not have to pay for a Conservative tax rise when billions in taxpayers’ money has been leaked due to fraud and mistakes—or, as Lord Agnew said last week, “schoolboy errors”?
Mr Clarke
I thank the hon. Lady for her question, and I completely agree that we want to pursue fraud whenever it has occurred. That is why, at the March 2021 Budget, we established a £100 million taskforce with more than 1,000 employees, designed precisely to go after every penny that has been taken by people not entitled to it. Her Majesty’s Revenue and Customs has already recovered and prevented £743 million-worth of loss; the taskforce is expected to recover £800 million to £1 billion from fraudulent or incorrect payments over the two years of its existence, and HMRC reserves the right to carry on for as long as it takes.
Mr Mark Harper (Forest of Dean) (Con)
I welcome the Chancellor’s clear confirmation last week that, far from writing off any of that money, the Government are going after everyone who has claimed it fraudulently. However, it is important to remember the context. The businesses in my constituency know the jobs that were saved by the rapid roll-out of bounce back loans and furlough and know that the Chancellor had to balance those constraints: while it is right to go after criminals, it was also right to make fast, smart decisions to protect thousands of jobs across our nation.
Mr Clarke
My right hon. Friend puts it extremely well. We must remember the context: the economy was going through a heart attack at that time, owing to the necessary steps we took to support wider public health. I would remind the Opposition Benches that the shadow Chancellor wrote to the Chancellor at the time, describing the loan scheme application process as “cumbersome” and calling for access to be made easier. We were operating in that context of needing to ensure that businesses could access the support to which they were legitimately entitled.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
What does the Minister think would happen to an employee in the private sector who lost more than £4 billion of someone else’s money to fraud, having ignored numerous warnings? Would they really be eyeing up a possible promotion, or is it more likely that they would be sacked on the spot?
Mr Clarke
We are running the Government of the United Kingdom, and we needed to respond at speed to an unprecedented public health emergency. If we had failed to provide the £400 billion of support that we gave, we would have seen the worst fears, with millions of people unemployed and thousands of companies closing. We struck the right balance in getting that support out to firms and then building in the protections needed to protect the taxpayer interest, and we are, as I have said, going to go after anybody who has defrauded the Exchequer.
Kirsten Oswald (East Renfrewshire) (SNP)
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
My hon. Friend raises an important point. My right hon. Friend the Chancellor worked closely with him in his previous post as a local government Minister. The supporting families programme provides funding for local authorities to deliver early intervention in children’s services. The programme was the subject of a robust national evaluation between 2015 and 2020, which demonstrated that in addition to improved outcomes for children and families, it delivered a return on investment of £2.28 of economic benefits for every £1 spent.
Tony Lloyd (Rochdale) (Lab)
Dan Jarvis (Barnsley Central) (Lab)
The Budget confirmed that total funding through the UK shared prosperity fund will, at a minimum, match the size of EU funds in each nation, and in Cornwall. If the Treasury were to do the same with all the other less-developed regions, as it should, South Yorkshire would be on course to receive £900 million of investment over the next seven years. Will the Chief Secretary to the Treasury give an assurance that we will get our fair share?
Mr Simon Clarke
I have the highest regard for the hon. Gentleman, and he is a doughty champion for the people of South Yorkshire. The levelling up White Paper will be a key moment in setting out our plans in that space, and my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will be coming to the House shortly to set out our plans in that regard.
Robin Millar (Aberconwy) (Con)
I welcome the Government’s intent that levelling up should be measured by more than simply spending money. Indeed, the data that is collected across the UK to measure its effect varies. What is my right hon. Friend doing to address that, and will he reassure Aberconwy residents of an effective UK-wide levelling up?
Sarah Atherton (Wrexham) (Con)
The Wrexham Gateway levelling-up fund bid attracts around £35 million of private finance. However, that investment in Wrexham will depend on a successful levelling-up fund bid the next time round. Will the Minister explain what considerations are made for bids with substantial private investment?
Mr Simon Clarke
My hon. Friend is a fantastic advocate for Wrexham, and for wider pride in north Wales, which is incredibly important. I am happy to meet her to discuss any aspect of the bid process that it would be helpful to discuss further.
Ronnie Cowan (Inverclyde) (SNP)
Will the Chancellor confirm or deny that millions of pounds of taxpayers’ funds have been sunk into an online gambling company with the Government’s start-up scheme? If so, is this the right time to invest in a private gambling firm, since a review of the Gambling Act 2005 is already being undertaken?
Mr Clarke
I thank the hon. Gentleman for his question. This relates to the future fund, a rules-based scheme that means that any firm is eligible for funding, providing it meets the required eligibility criteria for the scheme and passes the necessary checks. Neither the Government nor the British Business Bank chose specific investments; it is about helping innovative equity-backed companies to weather the economic disruption caused by covid and continue their long-term growth projection.
Peter Gibson (Darlington) (Con)
I commend my right hon. Friend for the steps he has taken to level up in Darlington, with the establishment of the Darlington economic campus. Will he update the House on the progress to bring high-quality, well-paid jobs to my constituency?