Oral Answers to Questions
Steve Barclay Excerpts(3 years ago)
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Nick Smith (Blaenau Gwent) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
The £4.8 billion levelling-up fund will invest in local infrastructure that has a visible impact on communities across the United Kingdom. It has been jointly designed by the Treasury, the Ministry of Housing, Communities and Local Government and the Department for Transport.
Nick Smith
Having waited so long, I really hope that the levelling-up fund will boost infrastructure in south Wales. I have already written to the Chancellor about the improvements that are needed for the Ebbw Vale to Cardiff line, to help young people especially to get to work, so can the Minister assure me that this investment will finally be seen through?
Steve Barclay
I share the hon. Gentleman’s desire to boost infrastructure in south Wales, and he is quite right to focus on young people getting to work, given how impacted they have been by the pandemic. He knows that his area in particular has received additional funding for capacity, and this will enable it to bid for the levelling-up fund to address the issues that he highlights.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
The existing fiscal framework sets out the arrangements for a review following the Scottish elections. This will allow a settlement in the light of a Parliament’s-worth of experience, which is consistent with the Smith commission’s expectations that there will be effective operation of the fiscal framework and that it should not require frequent ongoing negotiation.
Alan Brown
The reality is that the powers of the Scottish Government are not adequate to deal with the pandemic. There are too many constraints on borrowing powers for the Scottish Government; the reality is that councils can borrow more easily under the prudential borrowing code. Does the Minister not agree that it is time the Scottish Government had more flexible borrowing powers?
Steve Barclay
The Smith commission set out the conditions, and they already give substantial borrowing powers. That is why there is up to £450 million of annual capital borrowing, £700 million in the Scotland reserve and up to £600 million for resource borrowing in relation to forecast error, and of course that comes on top of the share of UK Government borrowing provided through the Barnett formula.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Mark Menzies (Fylde) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
Our plan for jobs will help young people find employment opportunities, including through our youth offer and the £2 billion kickstart scheme, where 180,000 kickstart vacancies have already been created.
Gordon Henderson [V]
I appreciate that the Government are helping to create those jobs, but it is important that young people have the confidence to learn and master a skill after leaving formal education, so how will my right hon. Friend ensure there are funds for people to do that in my constituency, including in Sittingbourne, which is the largest town in Kent that does not have its own further education facilities?
Steve Barclay
I agree with my hon. Friend that young people should have access to the skills and training opportunities they need to access great jobs. That is why my right hon. Friend the Chancellor has provided £126 million for traineeships in England to enable an additional 40,000 places over the next academic year, and why he has incentivised apprenticeships, with up to £3,000 for employers who hire new apprentices of any age.
Mark Menzies [V]
Measures such as the kickstart scheme are a fantastic way to help young people into work and reduce the risk of long-term unemployment. Many young people will have taken part-time or casual work to support themselves through the pandemic, such as in Fylde’s hospitality and leisure sector, and may not be claiming universal credit. What steps will my right hon. Friend be taking to help young people get the skills and industry experience to help them move from casual employment and launch full-time careers?
Steve Barclay
My hon. Friend raises an important point, and that is why, as well as the fantastic kickstart scheme, which he points out, the plan for jobs also expands existing programmes with proven employment outcomes, including traineeships, sector-based work academies and incentivised apprenticeship hiring. At the spending review, my right hon. Friend the Chancellor announced £138 million for the lifetime skills guarantee to fund free advanced technical courses for adults without A-levels or equivalent and to expand employer-led skills bootcamps.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Alexander Stafford (Rother Valley) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
I agree with my hon. Friend. The Government are committed to levelling up opportunities across the UK, including in Rother Valley. The £4.8 billion levelling-up fund will invest in infrastructure that improves everyday life across the UK, including by regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets. I look forward to working with him for his local area.
Alex Cunningham (Stockton North) (Lab) [V]
Andrew Bridgen (North West Leicestershire) (Con) [V]
Steve Barclay
Of course I would be happy to look at the report to which my hon. Friend refers. He knows that addressing future local authority resourcing is a matter for future spending reviews and the local government finance settlement. However, I would remind him that at the spending review 2020 we provided an estimated 4.6% cash increase in core spending to local authorities. That is on top of the largest real-terms increase in their core spending at the spending review 2019, and that is in addition to the about £11 billion of support that has been provided as part of the covid response.
Afzal Khan (Manchester, Gorton) (Lab) [V]
Public Spending: Devolved Administrations
Steve Barclay Excerpts(3 years, 1 month ago)
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The Chief Secretary to the Treasury (Steve Barclay)
On 15 February the UK Government announced an additional £2.1 billion for the devolved Administrations through the Barnett formula to support people, businesses and public services affected by coronavirus. This was on top of the £16.8 billion that had previously been guaranteed. £million Scottish Government Welsh Government Northern Ireland Executive Resource DEL excluding depreciation 873.510 497.557 238.054 Capital DEL (general) 236.845 137.130 74.964 Capital DEL (Financial Transactions) 41.532 25.530 14.039 Total DEL 1,151.888 660.218 327.057 £million Scottish Government Welsh Government Northern Ireland Executive Resource DEL excluding depreciation 39,210.215 17,923.931 14,974.531 Capital DEL (general) 4,836.545 2,837.569 1,591.874 Capital DEL (Financial Transactions) 612.198 313.696 214.816 Total DEL 44,65.8957 21,075.195 16,781.222
In recognition of the exceptional circumstances and in response to calls for flexibility, the devolved Administrations were given the option to carry forward any of the £2.1 billion into 2021-22 on top of their existing facilities to transfer funding between financial years.
The devolved Administrations have now confirmed they wish to carry forward the following amounts. They will receive this funding at Main Estimates 2021-22.
The devolved Administrations’ 2020-21 funding as at Supplementary Estimates 2020-21 is therefore being reduced by the same amount.
In line with the Statement of Funding Policy, the Welsh Government are also switching £501 million from Resource DEL to Capital DEL (general).
This means that revised 2020-21 funding is as follows:
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Public Service Pensions: Guaranteed Minimum Pension Indexation Consultation
Steve Barclay Excerpts(3 years, 1 month ago)
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The Chief Secretary to the Treasury (Steve Barclay)
The Government are today publishing their response to the consultation titled “Public Service Pensions: Guaranteed Minimum Pension (GMP) indexation consultation”. The consultation, which took place between 7 October and 30 December 2020, considered how the Government will continue to meet past commitments to public service pension members regarding the full indexation of public service pensions, including any GMP element related to membership of a public service pension scheme, beyond 5 April 2021. It considered options to extend the current GMP indexation methodology to 5 April 2024 or to a later date before reconsidering alternative methodologies, namely conversion, or to make the current methodology the permanent solution. The consultation made clear that the Government remain fully committed to the price protection of GMPs for members of public service pension schemes under any solution adopted.
As proposed by the majority of respondents to the consultation, the Government have decided to discount conversion as a long-term policy solution and make full GMP indexation the permanent solution for public service pension schemes. Public service pension schemes will therefore provide full indexation to those public servants with a GMP reaching state pension age beyond 5 April 2021.
The Government are of the view that this is the most practical solution to GMP indexation. This is because, before conversion could be undertaken, schemes would need to ensure that they have accurate reconciled data, along with a finalised methodology to convert those GMP benefits where conversion on a £1:£1 basis would not result in equalisation. This is likely to be resource intensive at a time when public service pension schemes do not have the capacity to undertake conversion until 2024 at the earliest. There also remains a chance that conversion might not be deliverable by then. Furthermore, the benefits of conversion diminish over time as the number of members with a GMP is steadily reducing. It is for these reasons that the Government have decided to make full GMP indexation the permanent solution for public service pension schemes.
The consultation set out the benefits of undertaking conversion, which include a reduction in administrative complexity in the long term regarding those public servants yet to reach state pension age. In addition, some respondents also highlighted additional benefits of under-taking conversion, some of which were highlighted in the Government response to the previous GMP indexation and equalisation consultation in 2016-17. However, notwithstanding these arguments, the Government does not consider these benefits to outweigh the benefits of making full indexation the permanent solution.
Public service pension schemes will now provide full indexation to those public servants with a GMP reaching state pension age from 6 April 2021. The Government response to the consultation has been published online on gov.uk and can be found at: www.gov.uk/government/consultations/public-service-pensions-guaranteed-minimum-pension-indexation-consultation.
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Oral Answers to Questions
Steve Barclay Excerpts(3 years, 1 month ago)
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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
People who are instructed to self-isolate by NHS Test and Trace and are on a qualifying means-tested benefit, unable to work from home and losing income as a result may be entitled to a payment of £500 from their local authority.
Vicky Foxcroft [V]
We need people to self-isolate to control transmission and ease restrictions, yet many are continuing to work as they cannot survive on £95.85 statutory sick pay per week. The Chancellor has been asked about this on numerous occasions, and it was disappointing that nothing new was announced in his Budget. Does the Minister agree that those who do not have access to occupational sick pay and cannot work from home should be eligible for the Test and Trace support payments?
Steve Barclay
The hon. Lady is right that many people —indeed, the majority of workers—will have support from employers above statutory sick pay, but it is for the reason she outlines that my right hon. Friend the Chancellor also announced that there will be a payment of £500 for those not qualifying for the means-tested benefit, paid through the discretionary scheme that was funded at the Budget and to be administered by local authorities.
Judith Cummins [V]
Bradford Council has the highest demand for self-isolation payments in the country, reflecting the fact that most people in our city are unable to work from home. The standard scheme for people in receipt of certain benefits is fully funded, but the discretionary scheme, which the council must use for everyone else, is not. In fact, the funding for Bradford falls far short of demand, so will the Minister urgently look into this so that councils with a high demand can support all workers who need to self-isolate?
Steve Barclay
The hon. Lady makes a fair point, which is that there was a pressure on the scheme for local authorities. It is for exactly that reason that my right hon. Friend the Chancellor announced in the Budget that there will be an increase to £20 million per month for the discretionary scheme. He also listened to representations from the hon. Lady and others about widening the scope of eligibility under that scheme.
Kate Hollern [V]
The Government have now made available £20 million a month in discretionary self-isolation funding for local authorities, despite only making £15 million available for four months when the scheme first started, and because of this, hundreds of people in Blackburn have been denied support to self-isolate. Does the Minister now accept that initial allocations fell well below what was needed and contributed to the rise in cases, and does he think that that is fair on my constituents?
Steve Barclay
It is right that there was support in place, but it is also right that my right hon Friend the Chancellor has listened to points made by Members across the House, which is why the discretionary support has been increased and also why it has been extended to cover parents who are unable to work because they are caring for a child who is self-isolating and a number of other factors. I think that shows once again the willingness of this Government to respond to the path of the virus and to adapt our schemes to what is needed with, in particular, the extensive support that is now being offered and has throughout the pandemic been offered to local authorities.
Mrs Hodgson [V]
In November, a constituent of mine was told to isolate via the NHS covid-19 app. She would have been eligible for the isolation payment, but as she was told to isolate via the app, she was never given an NHS Test and Trace account ID, and therefore her application could go no further. My constituent was affected financially as she could not work, and she has been going round in circles, even with my help, trying to access the payment. Can the Minister advise if my constituent can still access this payment retrospectively?
Steve Barclay
It is always difficult to comment without seeing the full facts of an individual case, and I know the hon. Lady is always an incredibly assiduous constituency Member and will ensure that the case is looked at. On the specifics, I would also point to the fact that there is a wider package of support as well. For example, in addition to the self-isolation payments, there is often eligibility for self-employed workers through the self-employed income support scheme. There is a wide range of measures, but obviously it will depend on the individual case.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Test and Trace has now been allocated £37 billion, but its head, Baroness Dido Harding, has told both the Public Accounts Committee and the Science and Technology Committee that the big struggle is to get people to isolate. So, although the Government have provided support for people to self-isolate, surely the Chief Secretary can go back and look again to ensure that what the Treasury is providing enables test, trace and isolate to be truly effective, or we are really not going to beat this pandemic?
Steve Barclay
The hon. Lady is right about the importance of Test and Trace; it is key to our unlocking the economy and to addressing the much more substantive costs in terms of the non-pharmaceutical interventions. As she will know as Chair of the PAC, while I as Chief Secretary and my right hon. Friend the Chancellor will always look at the cost of Test and Trace, the bigger prize is getting our economy opened. On the substantive point the hon. Lady raises on the self-isolation payments, again I point to the fact that at the Budget my right hon. Friend the Chancellor increased the funding for discretionary support; that sits alongside the £500 itself, and is in addition to the wider support that the majority of employers provide.
James Murray (Ealing North) (Lab/Co-op) [V]
The Government’s road map out lockdown says that self-isolation is critically important to halting the spread of disease, yet Baroness Harding has recently admitted that financial difficulties prevent people from self-isolating and a year ago the Health Secretary admitted he could not live on statutory sick pay of £94.25 a week. It is now £95.85 a week, so can the Minister explain why the Chancellor refuses simply to guarantee that anyone who has to rely on statutory sick pay or is unable to access even that should be eligible for the £500 payment?
Steve Barclay
I do not think the hon. Gentleman has actually read the Budget announcement made last week, because the discretionary element of the Test and Trace support payments applies even if people are not in receipt of means-tested benefits. So it does recognise the point raised by Members that it is important that there is an incentive for people to be tested; that is what the £500 payment through the Test and Trace system addresses. But in addition Members raised cases which were just outside the means-tested element of Test and Trace; that is the issue that the discretionary fund addresses, and it was dealt with in the Budget last week.
Craig Whittaker (Calder Valley) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
The Government have provided an unprecedented multibillion- pound package of support for Britain’s charities, including £750 million of dedicated funding that has helped more than 15,000 organisations across the country respond to the impacts of covid-19 and relieve the pressure on our NHS.
Craig Whittaker [V]
As we all know, yesterday marked International Women’s Day, a day when we celebrate and recognise the social, economic, cultural and political achievements of women. However, this pandemic has also shone a light on domestic abuse and the struggles of many women across the country, so will my right hon. Friend set out what steps he is taking to support charities in this field so we can ensure that victims and their children can access the support they need?
Steve Barclay
I join my hon. Friend in marking International Women’s Day yesterday, and he raises a very important issue. That is why my right hon. Friend the Chancellor at the Budget last week committed a further £90 million of funding; that, of course, builds on the £125 million announced at the spending review and indeed the earlier £25 million that had also been provided, recognising the 65% increase in calls to the national domestic abuse hotline and the renewed focus within Government on this important issue.
Alison Thewliss (Glasgow Central) (SNP) [V]
Charities across these islands have done amazing work through the pandemic, so with the Finance Bill coming up will the Treasury reward the efforts of these charities and encourage the public to donate by temporarily increasing the rate of gift aid from 20% to 25% and expanding the small donations scheme to make gift aid much easier to claim?
Steve Barclay
I join the hon. Lady in recognising the huge contribution that charities have made. In respect of specific tax measures, obviously they were dealt with by my right hon. Friend the Chancellor in the Budget last week, but I remind the hon. Lady of the £750 million of dedicated funding that has been provided to date in recognition of that important work.
Geraint Davies (Swansea West) (Lab/Co-op)
Amy Callaghan (East Dunbartonshire) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
I have frequent discussions with the Scottish Government Finance Secretary and spoke to her ahead of the Budget last week.
Kenny MacAskill [V]
Despite furlough, high streets face devastation—first shops and now pubs, an even harder space to fill. Was the Budget not an opportunity to support what are community assets in urban as well as rural areas and where alcohol consumption is supervised and not unchecked? With supermarkets having made huge profits during lockdown, much of that through alcohol sales, is it not time to support the Social Market Foundation’s call to increase alcohol duty on off-trade to sustain the on-trade in our communities?
Steve Barclay
Many businesses across Scotland argued for the alcohol freeze, not least the Scottish whisky industry. They also argued for the fuel freeze, which my right hon. Friend the Chancellor delivered. I am also surprised, when the hon. Gentleman talks of community, that he does not even recognise the extra capacity funding that his community received in the Budget. With all these things that impact the community, clearly, the additional £1.2 billion of funding received by the Scottish Government through Barnett consequentials at the Budget will again enable the Scottish Government to work with the UK Government to deliver better services in his community.
Marion Fellows [V]
The poverty Chancellor has refused to make permanent the £20 universal credit increase and apply it to legacy benefits, with 75% of those affected being disabled. If he refuses to change course, 60,000 Scots, including 20,000 children, will be left in poverty and forced to decide between heating and eating. If the Minister was in their position, what would he choose: heating or eating?
Steve Barclay
First, as was set out in analysis published with the Budget, the measures that the Government have taken have supported the poorest working households the most. Secondly, the hon. Lady also failed to mention the additional capacity funding for her community that was announced at the Budget. Thirdly, the Scottish Government requested specific powers in respect of benefits and tax, and, of course, they have the option to use those powers that they said that they wanted.
Amy Callaghan [V]
As the Minister will be aware, the £20 uplift to universal credit has been a lifeline during the pandemic. Many families in my constituency are devastated that the uplift is set to end in September. With the Scottish Government committed to tackling child poverty, including through the game-changer Scottish child payment, the UK Government-imposed cliff edge could pose a significant setback. Does the Minister agree that plunging children and families into poverty, whether it is now or in September, is a callous act, and will he commit to a permanent uplift to universal credit?
Steve Barclay
We have managed to get a hat trick, because the hon. Lady also received capacity funding for her own area at the Budget but chose not to mention that funding, which will help the families she referred to. It is also slightly odd for her to talk about plunging into something when the Chancellor has announced an extension. Coupled with that, and the UK-wide measures that were set out at the Budget—including measures such as freezing fuel duty, which will help many families in her own constituency—there was an additional £1.2 billion of funding for the Scottish Government and the powers to which I referred in my previous answer. Therefore, many families have been helped, including 480,000 existing claimants in Scotland as well as new claimants, and the families helped through the £500 one- off payment that was announced at the Budget. There was a strong package of support for Scotland, none of which she chose to mention in her question.
Robert Largan (High Peak) (Con)
Paul Blomfield (Sheffield Central) (Lab) [V]
The Chief Secretary to the Treasury (Steve Barclay)
I am always happy to meet the hon. Gentleman and discuss that matter in more detail. As he will recognise, one of the features of the Budget was the number of UK-wide measures, but at the same time he is quite right to point to the additional £2.4 billion of Barnett consequential funding that was allocated to the devolved Administrations, which has enabled them to apply further support as a result of the fiscal strength that is offered by the UK Treasury. I am of course happy to discuss the specific point with him in more detail.
Mrs Pauline Latham (Mid Derbyshire) (Con) [V]
Zarah Sultana (Coventry South) (Lab) [V]
Steve Barclay
With respect, the hon. Lady is simply wrong on the facts with her question. Under the Agenda for Change three-year award, the average increase this year was 2.5%, not the figure she alluded to. But of course, the Government have asked the pay review body to consider a number of factors and, as is normal practice, the Department of Health and Social Care has set out what is affordable within its budgets.
Ian Levy (Blyth Valley) (Con)
Infrastructure: Levelling-up Fund
Steve Barclay Excerpts(3 years, 2 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
The Government will deliver the levelling-up fund UK-wide using the financial assistance powers in the UK Internal Market Act. This will extend the benefits of funding for priority local infrastructure to local areas in Scotland, Wales and Northern Ireland.
The £4 billion announced at the spending review will now make available £4.8 billion UK-wide between 2021-22 and 2024-25.
It will be allocated competitively and be open to all local areas across the UK to boost growth and spread opportunity.
Making the fund UK-wide ensures that UK Government can target funding more efficiently and responsibly between different parts of the country. It will enable the Government to take a strategic approach across the UK, allocating funding in all parts of the country, irrespective of administrative borders.
Further details on how the fund will operate will be published at Budget.
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Government's Management of the Economy
Steve Barclay Excerpts(3 years, 2 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
I thank the hon. Member for Oxford East (Anneliese Dodds) for securing this debate, which is an important opportunity to take stock ahead of next week’s Budget. With the leave of the House, Mr Speaker, I shall also close the debate for the Government later.
The hon. Lady, and Members from all parties, will appreciate that I cannot discuss any of the specifics of next week’s Budget, but I can say that although we may not always agree on the way ahead, I believe that we in this House all want the same outcome: a vibrant and prosperous economy that gives people everywhere the opportunities that they deserve.
In responding to the motion, I intend to do three things. First, I shall briefly remind the House of the economic and fiscal situation that we inherited in 2010. [Hon. Members: “Good idea!”] It is a welcome motion for enabling that. Secondly, I shall examine the state of the economy a decade later, noting the difference, for which the credit goes to previous Treasury Ministers—not current Conservative Treasury Ministers—who took difficult decisions in the national interest. Finally, I shall say a little about the Government’s ambitions now, with the obvious caveat that a Budget is imminent.
As Members will recall, the outlook in 2010 was not good. The financial crisis had torn a hole in our country’s future, the economy was shrinking and the deficit was ballooning. As George Osborne said at the time of his speech in the Queen’s Speech: Economy debate in 2010 :
“Getting over the worst economic inheritance any modern government has been bequeathed by its predecessor is not so easy.”
He also noted that the British economy had become
“deeply unbalanced…Unbalanced between different parts of the country…Unbalanced between different sections of society… Unbalanced between different parts of our economy”.
As set out by the most recent Labour Chief Secretary, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne)—I accept that it was a light-hearted note and that much of the criticism he has received has probably been unfair, but the substance remained—there was no money left.
The coalition Government took power in 2010, at a moment when one thing mattered more than anything else: strong leadership prepared to make the right decision in the national interest. As hon. and right hon. Members will recall, in the years that followed the Government took steps to put this country back on a stable financial footing, because we need a strong economy to fund strong public services. The economy expanded in every year of the decade that followed. In fact, between 2010 and 2019, it grew by a total of 19.2%, which was faster than France, faster than Italy and faster than Japan—a reality not reflected at all in today’s motion. Achieving that success was about many things, not just fiscal discipline. In 2010, for instance, the Government created the Office for Budget Responsibility, which introduced independence, greater transparency and credibility to the economic and fiscal forecasts on which fiscal policy is based. Indeed, 10 years on, the OBR is considered by many of its peers to be the gold standard of independent fiscal institutions.
Just as now, a key focus for the Government throughout that period was protecting, supporting and creating jobs; here, too, the numbers are impressive. Participation in the labour market reached a record high of 79.8% in the three months to February 2020—three percentage points higher than in 2010. In the same year, the UK had a higher employment rate and a lower unemployment rate than both the OECD and G7 averages. Between the 2010 election and the end of 2019, we saw over 3.8 million more people in employment—equivalent to an average of nearly 1,000 extra people in work every single day—and 85% of that growth was in high-skilled occupations. Importantly, that growth was across the board. The employment rate increased for all regions in the country, as well as for women, for young people and for poorer households. Indeed, prior to the pandemic, the employment rate among women was at a record high of 72.7%, and youth unemployment was down almost half on 2010.
If hon. Members remember just one key statistic, perhaps it should be this: real household disposable income per head—the Treasury’s preferred measure of living standards—was 11.4% higher in 2019 than at the start of 2010, and incomes grew most strongly for households on lower and middle incomes. Remember that this was also the decade when we made significant personal tax cuts and introduced the national living wage, which we have increased every year. Taken together, changes to the national living wage, personal allowance and national insurance contributions mean that an employee working full-time on the national living wage is more than £5,200 better off than in April 2010. This is a track record of which any Government of any political persuasion should be proud.
It was not just households across the country that understood the benefits; the world recognised them too. In 2018, the UK topped the Forbes list of best countries for business for the second year running. A year later, the World Economic Forum acknowledged our strengths in innovation capability, business dynamism, institutions and market size. Businesspeople everywhere felt the same. The UK has the third highest foreign direct investment stock in the world after the US and Hong Kong, and more foreign investment than Germany and France combined. None of this reflects today’s motion; indeed, it reflects strong leadership, fiscal responsibility and a Government prepared to act in the national interest.
Coronavirus has been a great challenge that we, as a country, have had to face together. Every country has had to reckon with the virus’s economic impact, but because of the decisions made by successive Chancellors over the past 10 years, our economy and public services were strong when the pandemic hit. The markets understood that we were a Government who could plan for the future and make decisions when they mattered. As a result, we have been able to respond in the way in which we have. This House has heard about that response numerous times. It is one of the largest and most comprehensive responses in the world, totalling more than £280 billion since March 2020. Millions of jobs and livelihoods have been supported through the furlough scheme and the self-employment income support scheme. We have allocated billions of pounds in loans and grants to businesses across the UK. It is a response that the IMF singled out as
“one of the best examples of coordinated action globally”.
It called the response “aggressive” and “unprecedented”—that is a frequently used word, but I do not apologise for using it again. Indeed, the Resolution Foundation has said that the response
“prevented an unprecedented collapse in GDP from turning into a living standards disaster.”
The fact that we had rebuilt the public finances in recent years, combined with the UK’s strong institutional framework, gave us the wherewithal to borrow to provide the significant economic support that was required. Our decade of economic success made all of that possible.
I know that the Opposition wish to keep talking about the past, which is surprising given that many of those years were spent supporting the economic policies of the previous Leader of the Opposition. I am always more than happy to speak about our record over the past 10 years—I welcome today’s motion as providing an opportunity to do so—but I, like this Government, want to look forward to the future.
Last year’s spending review tells us everything we need to know about this Government and this Chancellor’s direction of travel. There was significant additional funding to help our public services in their continuing fight against the pandemic—we are making record investments in public services, including an historic settlement for the NHS, which provides a cash increase of £33.9 billion a year by 2023-24; we are providing better lifelong learning, such as through the £375 million to deliver the Prime Minister’s lifetime skills guarantee; we are recruiting more police officers to make our streets safer, with more than 6,600 already recruited towards our 20,000 target; we are implementing our 10-point plan to tackle climate change, mobilising £12 billion of Government investment, which will in turn create hundreds of thousands of green jobs across the country, including in carbon capture and storage, electric vehicles and renewable energy; we are investing in technology, innovation and the digital economy, as part of our goal to make the UK a science superpower—this Government are increasing investment in research and development at the fastest speed and greatest scale since records began; and we are investing in the UK’s economic recovery, with more than £100 billion of capital investment next year to spread opportunity, create jobs and drive economic growth.
The motion states that the last decade “weakened the foundations” of the economy, yet we saw nine years of continuous growth, while we reduced the deficit from 10% to below 2%, The motion says that the UK was “particularly vulnerable”, yet we have consistently protected our NHS, with the 2018 NHS settlement being the biggest cash increase in public services since the second world war. The motion says that our actions during the pandemic have “exacerbated the problems”, yet we have vaccinated more than one in three adults, which is far more than any other European country. The motion says that the UK has suffered
“the worst economic crisis of any major economy”,
yet independent bodies such as the IMF have praised the UK’s response, which in turn was possible only because of the economic decisions of the last decade. The motion talks of “inequalities”, yet distributional analysis of the Government’s interventions shows that we protected the poorest working households the most, through schemes such as the furlough. It is because of our economic record that we have been able to place the protection of jobs at the heart of our covid response, with the furlough and the other business support measures.
As the Chancellor said last month:
“Sadly, we have not been and will not be able to save every job and every business, but I am confident that our economic plan is supporting the finances of millions of people and businesses.”—[Official Report, 11 January 2021; Vol. 687, c. 23.]
He was right, and jobs will remain at the heart of his economic plan, as we work together to build back better and level up the whole of the UK.
Mr Speaker
Before we head up to Scotland, I remind Members that there will be a three-minute limit after the SNP spokesperson, Alison Thewliss.
Steve Barclay
With the leave of the House, I will close the debate for the Government. I thank hon. and right hon. Members for their participation in the debate. We have heard a wide variety of arguments and many helpful and insightful contributions. It is clear that the House is united in its desire to build a stronger economy, although we may not always agree on how to achieve it.
Today’s motion asks us to reflect on the past decade. As the hon. Member for Edinburgh West (Christine Jardine) pointed out, the Labour party seems to particularly want to talk about the past, so let me once more remind the House what the coalition Government inherited: unsustainable public finances, an economy in deep malaise and a fundamental lack of public trust in the financial system. Over the years that followed, we worked to bring the national finances back to strength and to inspire confidence in the UK economy, and those efforts paid off. Before coronavirus hit, the economy had expanded every year since 2010, growing faster than France, Italy and Japan. We had succeeded in reducing the Budget deficit, and by the end of 2019 over 3.8 million more people were in work compared with 2010, with 85% of that growth being in high-skilled occupations and youth unemployment nearly halving.
Over the course of the debate, we have had a number of excellent contributions. In particular, I would like to pay tribute to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), who correctly identified how the Leader of the Opposition, in so many areas, is simply following the Government in our agenda on levelling up. He rightly reminded the House that the last Labour Government were borrowing £1 in every £4 they spent. My hon. Friend the Member for Grantham and Stamford (Gareth Davies) spoke about how the Conservative Government had delivered, before covid, the lowest levels of unemployment since the 1970s, and about the benefit of reducing the deficit in good times to be stronger in the bad times.
My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) noted that the financial resilience now is due to the difficult decisions taken over the last decade, and also the fact that, from a progressive perspective, the top 1% pay a greater share of tax than under the previous Labour Government. My hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) emphasised our bold plans to build back better, and the opportunity this offers for areas such as Teesside. My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) highlighted how the deficit has been reduced over the last decade, ahead of the pandemic, enabling us to enter that from a position of strength—steps every one of which were opposed by those on the Benches opposite.
My hon. Friend the Member for Ashfield (Lee Anderson) talked about the practical difference that this Government are making in constituencies such as his, such as the £6.2 million funding from the future high streets fund or the £1.5 million from the towns fund, in contrast to the waste on schemes such as PFI that he had seen in areas like Ashfield. My hon. Friend the Member for Ynys Môn (Virginia Crosbie) spoke about the covid support in her constituency and what a material difference that has made. My hon. Friend the Member for Heywood and Middleton (Chris Clarkson) highlighted the gap between the briefing last week for the speech from the Leader of the Opposition, with language akin to Beveridge reports and the lacklustre content contained therein.
My hon. Friend the Member for Hertford and Stortford (Julie Marson) correctly identified the resilience from decisions over the last decade that has enabled the package of covid support, praised by the IMF and others, that the Chancellor has been able to deliver. My hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) spoke about the increased prosperity in constituencies such as his, and his pride in what the Government are delivering. My hon. Friend the Member for Broadland (Jerome Mayhew) identified the importance of the reduction in the deficit by more than 80% since Labour was last in power, and how that enabled the package of support announced by my right hon. Friend the Chancellor. That is particularly important to the levelling up agenda, on which he spoke so powerfully.
My hon. Friend the Member for North East Derbyshire (Lee Rowley) highlighted how, over the last decade, the economy has been turned around from that inherited from the previous Labour Government and the fixation of those on the Benches opposite on simply spending more. My hon. Friend the Member for Stourbridge (Suzanne Webb) spoke about the unprecedented economic response, particularly the importance of supporting jobs and the work in her constituency to that effect, with the Chancellor’s £30 billion plan for jobs being a key component of that.
My hon. Friend the Member for Bury South (Christian Wakeford) spoke about the nine years of economic growth and the practical support through tax cuts that have been delivered, as well as schemes such as the national living wage introduced by those on these Benches. He contrasted that with the poor delivery of Labour local authorities. My hon. Friend the Member for Darlington (Peter Gibson) spoke about how the Government support has helped businesses in his constituency, and indeed how it helped him over the last decade in his own experience of business, as well as about how important that is to the levelling up agenda on which he secured election, as did many of my colleagues.
My hon. Friend the Member for Wakefield (Imran Ahmad Khan) highlighted the economic legacy that was left by the Labour party after its time in government and contrasted that with the growth in the economy and the repairing of public finances that we have seen over the previous decade.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) highlighted the flaws in the policy proposals of the Labour party and how little substance there is in the proposals brought forward in the debate.
A range of contributions have made clear the importance of the resilience that comes from reducing the deficit from more than 10% when Labour was in power to less than 2% and how that has made possible the package of measures that the Chancellor has been able to bring forward. It is the actions of the Government over the past decade to restore the public finances that have enabled the Government to respond with more than £280 billion of economic support—one of the largest and most comprehensive support packages in the world. Schemes such as the furlough scheme and the self-employed income support scheme, the increase in the universal credit offer, the guaranteed loans for businesses, the grants, the tax breaks and the support to businesses on cash flow are a consequence of difficult decisions taken over the preceding decade.
I would also remind the House, and the hon. Member for Oxford East (Anneliese Dodds), that this Government’s proud record of public spending long before this crisis has enabled our public services to weather the storm of the pandemic. We have made a legally binding commitment to put an extra £34 billion into the NHS by 2023-24, with the core health budget growing by £6.3 billion next year, allowing us to deliver 50,000 more nurses and 50 million more GP appointments.
We have said that we will provide up to £15.8 billion to the police over the next financial year. That is £636 million more than in 2021 and includes more than £400 million to continue our commitment to recruit 20,000 extra police officers, on which my right hon. Friend the Home Secretary has made such excellent progress.
We are increasing the schools budget next year by £2.2 billion and are on our way to delivering an extra £7.1 billion by 2022-23. We are investing in providing lifelong learning as well.
The motion suggests that Labour wants to focus on the past. Let us look at what past policies it wants to focus on. During his leadership, the Leader of the Opposition has said that he wants to renationalise huge swathes of the economy. He has been clear that he wants to remove the 50% turnout measure for industrial ballots, allowing disruption of workplaces with minimum support. He has described the economic policies of the previous Labour leader as
“the only platform going forward”,
which is slightly at odds with his message that the Opposition are under new management.
This is a Government with a record of real economic achievement. We have succeeded in providing better public services and supporting millions of people on low incomes, while significantly reducing the deficit in the pre-covid years. We are succeeding at safeguarding the UK economy, while protecting public health, when faced with the greatest challenge since the second world war. We will succeed in securing the UK’s recovery from coronavirus and in creating an even stronger, greener, more equal economy, which this country and its people so richly deserve.
Question put.
Public Service Pensions Consultation
Steve Barclay Excerpts(3 years, 2 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
The Government published a consultation document (CP 253, HCWS380) in July 2020 outlining proposals regarding public service pensions. I have today laid in Parliament the Government’s response to the consultation: “Public service pension schemes: changes to the transitional arrangements to the 2015 schemes. Government response to consultation” (CP 373).
The main public service pension schemes were reformed in 2015 to make them fairer—especially for lower earners—and more affordable for the taxpayer. Public service pensions continue to be among the best in the workplace, providing a generous level of pension provision for public servants. Following negotiations with trade unions and other member representative bodies, the Government agreed that those closer to retirement should be either fully or partially protected from the changes and allowed to remain in their legacy schemes, known as “transitional protection”. In December 2018 this transitional protection was found by the Court of Appeal to discriminate unlawfully against younger judges and firefighters who were members of the legacy schemes before 1 April 2012 but did not benefit from transitional protection. The reformed schemes themselves are not discriminatory. As set out in the July 2019 written statement (HCWS1725), the Government accepted that the ruling reads across to other public service pension schemes, affecting around 3 million public servants.
In July 2020 I launched a consultation, seeking views on proposals to address this. More than 3,000 responses to the consultation were received, and the Treasury also conducted engagement sessions with a wide range of stakeholders. I am grateful for the many responses to the consultation we received from public servants, employers, administrators, financial advisers, trade unions and member representative bodies. They were insightful and crucial for further developing the Government’s proposals, understanding the impacts of the proposals, and coming to informed decisions.
Having considered the responses to the consultation, the Government are today announcing that they will implement the deferred choice underpin (DCU). This will give eligible scheme members a choice at the point their pension becomes payable as to whether they wish to receive benefits from their legacy scheme or benefits equivalent to those that would have been available under their reformed schemes in relation to their service between 1 April 2015 and 31 March 2022. In the meantime, eligible members will be deemed to have been members of their legacy schemes for any period of service between those dates.
In implementing the DCU, rather than an immediate choice exercise, we have recognised that members will have more certainty around their personal circumstances at the point they need to make their choice. This approach considerably reduces the need for members to make assumptions around their future career, their retirement, health and dependants, which would increase the risk of members, particularly younger members, making an incorrect decision. I strongly believe that the DCU is the correct approach, given its key advantage of providing members with greater certainty about their choice of pension benefits.
I am also confirming that the legacy schemes will close on 31 March 2022. From 1 April 2022, all those who remain in service will do so as members of the reformed schemes that were introduced in 2015. Benefits built up in the legacy schemes will be protected.
The reasons for closing the legacy schemes and moving to the reformed schemes are as valid now as they were when the reforms were introduced: the schemes should continue to provide guaranteed pension benefits to public servants, but do so on a fairer basis, and in a way that ensures that they are affordable and sustainable into the future. Public service pensions continue to reward public servants generously for their dedicated service.
The Government will bring forward new primary legislation, when parliamentary time allows, to provide requisite powers to deliver these changes to public service pension schemes.
Cost control mechanism and 2020 valuations update
Alongside the launch of the consultation in July 2020,1 announced that the pause to the cost control mechanism—which was introduced as a consequence of the uncertainty regarding the value of schemes to members resulting from the court judgments—would be lifted, and the cost control element of the 2016 valuations process completed. I also announced that the Government Actuary (GA) would proceed with the review to assess whether the mechanism is operating as intended.
As I previously set out, the increased value of schemes to members as a result of the McCloud remedy will be taken into account in the completion of the 2016 valuations. Given that this will lead to higher costs than would otherwise have been expected, early estimates indicate that sortie schemes could breach the ceiling. If normal statutory procedure were followed, any ceiling breaches would lead to a reduction in member benefits in order to bring costs back to target. The GA review is ongoing, and I have decided that it would be inappropriate to reduce member benefits based on a mechanism that may not be working as intended.
This means any ceiling breaches that do occur during the completion of the 2016 valuations will therefore not be implemented, and benefit levels will not be reduced. However, I have also decided that should any floor breaches occur, they will be honoured, and member benefits increased in order to bring costs back to target. These decisions apply only to the cost control element of the 2016 valuations. Future cost control policy for future valuations will be set out once the GA’s review of the mechanism has concluded and any recommendations have been fully considered by the Government.
Changes in the employer contribution rates resulting from the 2020 valuations process were due to be implemented from April 2023 for the majority of unfunded public service pension schemes. These valuations have already begun, and require intensive work across schemes, Departments and the Government Actuary’s Department (GAD) over several years.
Due to interactions with wider pension policies, in particular the implementation of the McCloud remedy reforms, completion of the 2016 valuation process and the review of the cost control mechanism, work would need to be undertaken in unprecedentedly short timescales to amend employer contribution rates in April 2023.
Any changes to employer contribution rates resulting from the 2020 valuations will therefore be delayed from April 2023 to April 2024. This is an exceptional but necessary decision taken in light of the wider public service pensions landscape.
Today’s announcements set out the steps the Government will take to ensure that members of public service pension schemes are treated equally—taking an approach which is fair for members as well as other taxpayers.
Copies of the Government’s response document to the consultation (CP 373) are available in the Vote Office and Printed Paper Office, and it is published on gov.uk.
[HCWS757]
Oral Answers to Questions
Steve Barclay Excerpts(3 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Bryant (Rhondda) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
Treasury Ministers regularly speak to their ministerial colleagues on all matters of public spending. Remediation of coal sites is a devolved policy and responsibility lies with the devolved Administration through their Barnett funding.
Chris Bryant [V]
Well, that was a depressing start, because the truth is that 40% of all the disused coal tips in the whole United Kingdom are in Wales, which is much higher than the Barnett formula would normally allow for. Ninety per cent. of all the disused coal tips in England and Wales are in the poorest communities, so if the Government really stick to this policy of “It’s down to the local authority, which has to find the funding for this”, they are going to see the poorest communities in Britain pay for the legacy of an industry that made this country rich. I urge the Minister, please, to think again about how we can make sure that communities are safe and that the money and the funding are there to make sure that the coal slides, which are likely to come more frequently, do not provide long-term financial and economic problems for those communities.
Steve Barclay
I am a little surprised by the hon. Gentleman’s response because the last time that he raised this issue at Treasury questions, the UK Government responded extremely constructively, with £31 million of financial support, including £22 million to address the flooding of coal sites and £9 million for coal tip repairs, which I thought he might at least have welcomed. Notwithstanding that, at the request of the Welsh Government, the Coal Authority is supporting work to undertake a safety review of all the small tips in Wales, regardless of ownership, but he should also recognise that it is a devolved matter.
Tracey Crouch (Chatham and Aylesford) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
Sport and wellbeing is of major importance to this Government as we manage the effects of the pandemic. That is why we announced the £300 million sport winter survival package to protect major spectator sports, why we have supported clubs through covid business support schemes, such as the furlough scheme, and why we have introduced the £100 million national leisure recovery fund to support publicly owned leisure facilities through this crisis.
Tracey Crouch [V]
The Chief Secretary shares my passion and enthusiasm for sport, and I know that he appreciates the consequences of good physical and mental health on the wellbeing of individuals, but he may also be aware that poor physical health and wellbeing cost the Treasury tens of billions of pounds per annum. Given that covid-19 has had a negative impact on both, does he agree that our recovery strategy should put sport, physical activity and wellbeing at its heart, and will he consider the merits of a wellbeing budget that looks at shifting the focus away from GDP as the only measure of economic growth?
Steve Barclay
I agree with my hon. Friend that sport and wellbeing should be at the heart of our recovery plans and pay tribute to the work that she has done not just on football but on sport and loneliness in championing these issues. There are lessons from other countries that we can look at as well. One of the areas that I am very keen to work with her on are the opportunities around social prescribing, where the role of sport and wellbeing—in terms of how we treat people with regard to mental health and recovery from covid—has a lot to offer, and I know that she will continue to champion that.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
David Linden (Glasgow East) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
I have frequent discussions with the Scottish Government’s Finance Minister, and may I take this opportunity to add my congratulations on the announcement yesterday of her engagement?
Stuart C. McDonald [V]
I think every Member will join me in congratulating Scotland’s Finance Minister, Kate Forbes, on her happy news. A decade of UK austerity delivered unprecedented declines in living standards and incomes, especially to those already struggling. Now even the OECD says that making cuts instead of investment after the financial crisis was the wrong approach. With the Scottish Budget set for Thursday, will the Minister confirm that this time the UK Government will invest to stimulate economic recovery, or will more Tory cuts put Scotland’s recovery at risk?
Steve Barclay
It is a little odd, in a year when Scotland has received £44 billion through the Barnett formula, to be talking of cuts. The hon. Gentleman refers to the Scottish Budget, and he will be aware that there are opportunities with the powers that the Scottish Government have, whether that is to exercise their flexibilities on elements of universal credit, to top up benefits and create new ones, or to introduce new tax powers. The Scottish Parliament has powers, and we wait to see how the Scottish Government use them.
David Linden
In asking the public to stay at home, protect the NHS and save lives, there must be an understanding that in doing so consumers are running up higher electricity and gas bills. Does the Minister understand that 2.1 million people are behind in their energy bills at the moment, and that one way to help them would be to reduce VAT temporarily on home energy bills?
Steve Barclay
The hon. Gentleman makes a fair point; there are household costs. That is why my right hon. Friend the Chancellor, through the package of measures, has supported the incomes of the poorest. The distributional analysis from the Treasury shows that the poorest working households have benefited most from the measures introduced by my right hon. Friend. The best way of supporting those families is through schemes that the UK, through its broad shoulders, is able to offer, such as the furlough scheme and the self-employed income support scheme, which have supported so many jobs across Scotland.
Alison Thewliss (Glasgow Central) (SNP) [V]
The Chancellor’s chaotic stop-start approach to furlough last autumn undoubtedly cost jobs. Failing to continue the £20 universal credit uplift and extend it to legacy benefits is set to plunge struggling families into hardship, and now the Conservatives are signalling tax rises and a return to austerity. To what extent does the Minister believe that that approach has contributed to 20 consecutive polls in favour of Scottish independence?
Steve Barclay
There is a factual error in the hon. Lady’s question, in saying that there was a stop-start approach to furlough—
Steve Barclay
It continued throughout; that is just a statement of fact. In terms of the wider package, I would refer the hon. Lady to the fact that the UK Government have provided £280 billion-worth of support and that bodies such as the International Monetary Fund have said that the UK’s economic response has been one of the best examples of co-ordinated action globally. We are able to do that because we are working as one United Kingdom acting together and using the broad shoulders of the UK.
Lucy Powell (Manchester Central) (Lab/Co-op)
Mr David Jones (Clwyd West) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
As healthcare is devolved, it is for the Welsh Government to ensure that the NHS in Wales has enough funding, using the over £20 billion of funding they receive from the UK Government through the Barnett formula.
Mr Jones [V]
The covid-19 vaccination programme in Wales is unfortunately lagging behind England, but despite that, the Welsh First Minister has announced that he intends to slow the release of vaccine to avoid, as he puts it, vaccinators
“standing around with nothing to do”.
Can my right hon. Friend confirm that there are no financial constraints that he is aware of that would justify this perverse and irrational policy decision or prevent the Welsh Government from deploying the vaccine as quickly in Wales as in any part of the country?
Steve Barclay
I am happy to confirm to my right hon. Friend that there are not financial constraints. The UK Government have guaranteed that the Welsh Government will receive at least £5.2 billion in additional resource to deliver their coronavirus response, including the vaccine deployment activities.
Graham Stringer (Blackley and Broughton) (Lab)
Craig Tracey (North Warwickshire) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
The Government have committed more than £10 billion to support local authorities in dealing with covid in this financial year and the next, including an unprecedented guarantee to compensate them for their income losses as a result of the pandemic.
Craig Tracey [V]
I welcome the considerable support that has already been given to local councils during the pandemic. However, I recently had discussions with leaders of North Warwickshire Borough Council, which is an incredibly well-run council, and they are still finding a shortfall of about half a million pounds against an annual budget of £10 million, due to a mix of lost revenue and providing additional services to residents, such as extra home waste collection services. What more can be done to ensure that we give councils the full backing they need to continue providing services?
Steve Barclay
North Warwickshire has received more than £1 million to meet its expenditure pressures this year, exceeding the expenditure pressures that it has reported to the Ministry of Housing, Communities and Local Government. I urge my hon. Friend to express any further concerns to MHCLG at the earliest opportunity. As he recognises, a comprehensive package of support has already been provided, and that support continues.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Lilian Greenwood (Nottingham South) (Lab) [V]
The Chief Secretary to the Treasury (Steve Barclay)
The hon. Lady is right to draw attention to the commitment the Government have made to infrastructure, including in the forthcoming integration infrastructure plan, but the levelling up is not just about rail, as the Chancellor said; it is also about the £4 billion levelling up fund and, most importantly, about the review of the Green Book. As Lord O’Neill and others have commented, that ensures that a whole range of projects better address the levelling up alongside the significant investment in rail and other transport infrastructure.
Sarah Atherton (Wrexham) (Con)
James Sunderland (Bracknell) (Con)
Given the current imperative to forge new trade deals worldwide, and also to make the new EU trade deal work, what incentives are being considered by the Treasury to both attract new companies to the UK and retain those that are already here?
Steve Barclay
As my right hon. Friend the Chancellor set out a moment ago, the Office for Investment, led by Lord Grimstone, is focused on exactly that issue, working in tandem with the Build Back Better Business Council, which the Prime Minister and the Chancellor chair.
Mr Speaker
Order. I now suspend the House for three minutes to enable the necessary arrangements to be made for the next business.
Public Service Pension Scheme Indexation and Revaluation 2021
Steve Barclay Excerpts(3 years, 3 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
Public service pensions continue to be among the very best available. Scheme Police Fire Civil Service NHS Teachers LGPS Armed Forces Judicial Revaluation for active member 1.75 % 2.4 % 0.5% 2% 2.1% 0.5% 2.4% 0.5%
Legislation governing public service pensions requires them to be increased annually by the same percentage as additional pensions (state earnings related pension and state second pension). Public service pensions will therefore be increased from 12 April 2021 by 0.5%, in line with the annual increase in the consumer prices index up to September 2020, except for those public service pensions which have been in payment for less than a year, which will receive a pro-rata increase. This will ensure that public service pensions take account of increases in the cost of living and their purchasing power is maintained.
Separately, in the career average public service pension schemes introduced in 2014 and 2015, pensions in accrual are revalued annually in relation to either prices or earnings depending on the terms specified in their scheme regulations. The Public Service Pensions Act 2013 requires HMT to specify a measure of prices and of earnings to be used for revaluation by these schemes.
The prices measure is the consumer prices index up to September 2020. Public service schemes which rely on a measure of prices, therefore, will use the figure of 0.5% for the prices element of revaluation.
The earnings measure is the whole economy year-on-year change in average weekly earnings (non-seasonally adjusted and including bonuses and arrears) up to September 2020. Public service schemes which rely on a measure of earnings, therefore, will use the figure of 2.4% for the earnings element of revaluation.
Revaluation is one part of the amount of pension that members earn in a year and needs to be considered in conjunction with the amount of in-year accrual. Typically, schemes with lower revaluation will have faster accrual and therefore members will earn more pension per year. The following list shows how the main public service schemes will be affected by revaluation:
[HCWS699]
Oral Answers to Questions
Steve Barclay Excerpts(3 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ronnie Cowan (Inverclyde) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
We have supported those on the lowest incomes throughout this crisis by investing more than £7 billion in the welfare system, and we are focused on helping people to get into work by making up to £30 billion available through our plans for jobs.
Ronnie Cowan [V]
Councils throughout England, Wales, Northern Ireland and Scotland have asked for support to run basic-income pilots, designed to increase our knowledge of the pros and cons of basic income. Five hundred and twenty elected politicians from across the UK sent a letter to the Chancellor on this subject and got a frankly derisory response. Does the Chancellor honestly believe that he knows everything there is to know about a basic income and would not learn from such pilots? If he does not, will he back the basic-income pilots and let us learn together and make evidence-based policy?
Steve Barclay
I am happy to learn from the 2017 Work and Pensions Committee report that said it was
“difficult to see how”—
a universal basic income—
“would substantially alleviate poverty”,
or from the OECD, which said that a universal basic income could “increase poverty” and negatively affect the poorest. If the hon. Gentleman is putting forward this proposal, he should set out what the specific amount is. I note that to date the SNP has refused to do that.
Stephen Flynn (Aberdeen South) (SNP)
The Chief Secretary to the Treasury (Steve Barclay)
This year, the Government have put in place an unprecedented package of support to protect incomes and jobs right across the UK. Analysis published earlier this year shows that our interventions significantly protected people’s incomes, with the least well-off in society supported the most.
Owen Thompson
How are those who have been excluded from support so far seeing their household incomes protected when they are getting no support from this Government at all? What plans does the Minister have to meet members of the ExcludedUK group to make sure that those who have had no support at all can actually survive Christmas?
Steve Barclay
As my right hon. Friend the Chancellor set out a moment ago, the Financial Secretary to the Treasury will be meeting that group, but we have also targeted the support, including on those who are majority self-employed. Through that targeting, we have been able to confirm an additional £2.4 billion of support for the Scottish Government.
Stephen Flynn
In his spending review statement last week, the Chancellor failed even to mention Brexit, but the Office for Budget Responsibility was not quite so shy; indeed, it painted a particularly bleak picture. So can the Minister clarify this: does he accept the OBR’s findings, and if so, does he therefore agree that the Scotland’s economic future will be detrimentally impacted by any Brexit on the watch of this Tory Government?
Steve Barclay
What economic analysis has always shown is that Scotland’s trade with the rest of the United Kingdom is much more important than its trade with Europe. However, Government Members have always been clear that we seek a deal. The asks that the negotiating team have put forward are extremely reasonable, and Lord Frost and the team continue to work to that effect.
The Chief Secretary to the Treasury (Steve Barclay)
The £20 per week increase to universal credit and working tax credit is benefiting claimants by a total of £6.1 billion this year and is just one part of the wide-ranging package of Government support during this crisis.
Stephen Timms
The Joseph Rowntree Foundation points out that raising social security benefits not only helps hard-pressed families, but boosts the economy because the increase is likely to be spent. Does the Chief Secretary recognise that raising legacy benefits in line with the £20 a week increase he has referred to that has already been introduced in universal credit would boost the economy while also addressing the current unfair discrepancy between them?
Steve Barclay
I recognise that the right hon. Gentleman has, as Chair of the Work and Pensions Committee, raised this issue on a number of occasions, and he will know that the uplift continues until the end of March; the benefit to which he refers continues until then. The Government are not ruling anything out for the future, but it is right that we wait for more clarity on the national economic picture before making any further decisions.
David Johnston (Wantage) (Con)
Alison Thewliss (Glasgow Central) (SNP)
Yesterday, Scotland’s First Minister announced her intention to award a £500 thank you payment to Scottish health and social care staff in recognition of all they have done throughout the pandemic. Powers over tax allowances, exemptions and national insurance are reserved to the UK Government, so will the Chancellor do the right thing and ensure that this festive gift of good will is not clawed back by Her Majesty’s Revenue and Customs?
The Chief Secretary to the Treasury (Steve Barclay)
As the hon. Lady should know, the income tax on these payments is actually paid to Scotland, not to Westminster. The Scottish Government have the power and the funding to gross up the payment if they wish. The UK Government have provided over £8.2 billion extra funding for the Scottish Government this year to support people, businesses and public services.
Dr Neil Hudson (Penrith and The Border) (Con) [V]
Tommy Sheppard (Edinburgh East) (SNP) [V]
Steve Barclay
First, the approach of the United Kingdom Government to these Scottish payments is exactly the same as applied recently in Wales. To further reinforce the point that I made a moment ago, while decisions on whether to exempt these payments are reserved, the Scottish Government will keep all the income tax receipts from these payments, so if they wish NHS and care workers to receive £500 net of tax, which is what they say is their wish, they can simply increase the value of the payments going to them. That is the point of substance. That is the point they do not want to engage on.
Sir Edward Leigh (Gainsborough) (Con)
Steve Barclay
As my right hon. Friend the Chancellor set out earlier, and as the Office for Budget Responsibility set out last week, the total package of support comes to over £280 billion. In the spending review last week we also signalled further support as part of our covid response, with an additional £55 billion next year. Of course my right hon. Friend continues to keep under review the specific support to the charity sector, but as he set out in his earlier response, a comprehensive package of support has already been allocated. We will of course keep that under review.
Julian Sturdy (York Outer) (Con)
My right hon. Friend will know that pubs in tier 2 areas such as York will be hit particularly hard by the Government’s requirement to serve alcohol only with a meal. Given that pubs were already struggling prior to the pandemic, does he agree that now, more than ever, we need a fundamental reassessment of the way we tax beer and pubs?
Steve Barclay
As the Chancellor set out in the Budget, we are undertaking a comprehensive alcohol duty review, which will provide an opportunity to look at this issue in depth. My hon. Friend will also be aware that in six of the last seven Budgets the Government have cut or frozen beer duty, meaning that it is now at its lowest level for 30 years, but as part of our wider support package we will obviously keep that under review.