Tenth Report - Autumn Budget and Spending Review 2021

Select Committee
Treasury Committee HC 825 27 January 2022
Report Status Government responded
Conclusions & Recommendations 24 items (6 recs)
Source View on Parliament website
Government Response (AI assessment · 24 of 24 classified)
Accepted 3
Acknowledged 19
Not Addressed 1
Rejected 1
Government response
Seventh Special Report - Autumn Budget and Spending Review 2021: Government response to the Committee’s Tenth Report · published 2 Mar 2022
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Recommendations & Conclusions

24 results
1 Conclusion Acknowledged
Para 16
The Chancellor’s fiscal rules are reasonable in the context of the pandemic and its effects.
Conclusion
The Chancellor’s fiscal rules are reasonable in the context of the pandemic and its effects. The Chancellor has set his primary fiscal rule to target the overall stock of Public Sector Net Debt, with a secondary target to run a … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
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2 Conclusion Acknowledged
Para 17
According to the Office for Budget Responsibility, the Chancellor has between a 55 and 60...
Conclusion
According to the Office for Budget Responsibility, the Chancellor has between a 55 and 60 per cent chance of meeting his fiscal rules. He has given himself less room to meet his rules than his predecessors. The headroom may prove … Read more
Government Response Summary
The government acknowledges the Committee's conclusions on the government’s fiscal strategy and states the Treasury continues to monitor the risks of higher inflation and interest rates closely, and the Charter for Budget Responsibility now contains a new focus on assessing the affordability of public debt.
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3 Recommendation Acknowledged
Para 18
By setting himself rolling targets the Chancellor has given himself the flexibility to respond to...
Recommendation
By setting himself rolling targets the Chancellor has given himself the flexibility to respond to any deteriorations in the forecast at future fiscal events. However, the Chancellor should not use a rolling target as a mechanism to allow himself to … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
HM Treasury
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4 Conclusion Acknowledged
It is disappointing that the Government has pushed back its target to spend £22 billion...
Conclusion
It is disappointing that the Government has pushed back its target to spend £22 billion per year on Research and Development by two years from 2024–25 to 2026–
Government Response Summary
The government notes the committee's conclusions on R&D spending ambitions and highlights existing investment plans.
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27 Recommendation Acknowledged
Para 23
However, the new commitment would still represent a significant increase and bring public UK Research...
Recommendation
However, the new commitment would still represent a significant increase and bring public UK Research and Development spending above the OECD average, and above Germany, France and the US. While the target for R&D spending remains historically high, there is … Read more
Government Response Summary
The government notes the committee's conclusions on R&D spending ambitions and highlights existing investment plans.
HM Treasury
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5 Conclusion Acknowledged
Para 37
Due to the increase in Government debt, the proportion of gilts that are index linked,...
Conclusion
Due to the increase in Government debt, the proportion of gilts that are index linked, as well as the proportion of UK Government debt that has been financed through the issuance of Bank of England reserves, the public finances are … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
HM Treasury
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6 Conclusion Acknowledged
Para 38
The OBR states that its central forecast for the path of inflation could be too...
Conclusion
The OBR states that its central forecast for the path of inflation could be too low. Since the Budget, inflation has already significantly exceeded the level forecast by the OBR in October. The Bank of England raised interest rates to … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
HM Treasury
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7 Conclusion Acknowledged
The OBR forecast states that the policy mix chosen by the Chancellor at this Budget...
Conclusion
The OBR forecast states that the policy mix chosen by the Chancellor at this Budget will act as a boost to inflation, and it identified in particular the increase 44 Autumn Budget and Spending Review 2021 in employer National Insurance … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
HM Treasury
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8 Conclusion Not Addressed
Para 54
While some departments which had been significantly disrupted by the pandemic, such as the Department...
Conclusion
While some departments which had been significantly disrupted by the pandemic, such as the Department of Health and Social Care and the Department for Transport, received large increases, the Department for Education, which was also affected by the pandemic, did … Read more
Government Response Summary
The government states they are exceeding commitments to replace EU funding and that spending power for the Department of Levelling Up, Housing and Communities is not falling.
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9 Conclusion Acknowledged
Para 66
It was against the backdrop of the Covid pandemic that the Chancellor announced a large...
Conclusion
It was against the backdrop of the Covid pandemic that the Chancellor announced a large increase in departmental spending at this Spending Review, with real-terms increases for all departments. However, the Chancellor also declared his intention to cut taxes later … Read more
Government Response Summary
The government thanks the committee for their conclusions and states that the Treasury continues to monitor the risks of higher inflation and interest rates closely.
HM Treasury
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10 Conclusion Acknowledged
Para 67
It is understandable that total departmental spending is rising at present, and that the UK’s...
Conclusion
It is understandable that total departmental spending is rising at present, and that the UK’s tax burden will rise to levels not seen during peace time, given that the country is still in the midst of a global pandemic, which … Read more
Government Response Summary
The Treasury continues to monitor the risks of higher inflation and interest rates closely, and the Charter for Budget Responsibility now contains a new focus on assessing the affordability of public debt.
HM Treasury
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11 Conclusion Accepted
Para 77
The Spending Review described how levelling up was being incorporated into many aspects of government...
Conclusion
The Spending Review described how levelling up was being incorporated into many aspects of government policy. We await more specific detail on how levelling up will be measured and achieved. Rebadging existing programmes may not have the impact the Government … Read more
Government Response Summary
The government claims to be exceeding commitments to replace EU funding in full and refutes the claim that the spending power for the Department of Levelling Up, Housing and Communities is falling.
HM Treasury
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12 Conclusion Accepted
Para 78
The Government stated that the UK Shared Prosperity Fund will be the successor to the...
Conclusion
The Government stated that the UK Shared Prosperity Fund will be the successor to the EU Structural Investment Funds. However, the Government is only providing to this new fund 60 per cent of the money provided by the EU fund. … Read more
Government Response Summary
The government claims to be exceeding commitments to replace EU funding in full and refutes the claim that the spending power for the Department of Levelling Up, Housing and Communities is falling.
HM Treasury
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13 Conclusion Accepted
Significant elements of the Government’s levelling up agenda will be delivered through the Department for...
Conclusion
Significant elements of the Government’s levelling up agenda will be delivered through the Department for Levelling Up, Housing and Communities (DLUHC). However, once the increases in social care funding are excluded, the spending power for this department’s activities are being … Read more
Government Response Summary
The government claims to be exceeding commitments to replace EU funding in full and refutes the claim that the spending power for the Department of Levelling Up, Housing and Communities is falling.
HM Treasury
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14 Conclusion Acknowledged
Para 105
Compared to the existing adult social care framework in England of thresholds and the absence...
Conclusion
Compared to the existing adult social care framework in England of thresholds and the absence of any lifetime spending caps, the Government’s new policy proposals are more generous. All individuals will now have a lifetime cap on contributions where previously … Read more
Government Response Summary
The government thanked the Committee for welcoming the social care charging reforms, noting the new £86,000 cap and that roughly two thirds will receive some state support for care costs.
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15 Conclusion Acknowledged
Para 106
Compared to the Dilnot proposals the Government’s measures are more generous with regard to those...
Conclusion
Compared to the Dilnot proposals the Government’s measures are more generous with regard to those who receive care in their own home. In addition, the cap on how much a care home can charge for weekly “living costs” has been … Read more
Government Response Summary
The government thanks the Committee for welcoming their social care charging reforms and states that the new £86,000 cap will end people’s worries that they may face unpredictable care costs.
HM Treasury
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16 Conclusion Acknowledged
Para 107
However, when compared to the Dilnot Review’s recommendations that had been legislated for but which...
Conclusion
However, when compared to the Dilnot Review’s recommendations that had been legislated for but which have not yet been commenced, the Government’s proposals are less generous in how they treat the means tested contribution made by local authorities. As a … Read more
Government Response Summary
The government thanks the Committee for welcoming the social care charging reforms, stating the new £86,000 cap will end worries about unpredictable care costs and that it is highly unlikely anybody within the means test would deplete their assets to anywhere near the theoretical maximum level.
HM Treasury
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17 Recommendation Acknowledged
We welcome the reduction in the Universal Credit taper rate.
Recommendation
We welcome the reduction in the Universal Credit taper rate. It will provide a stronger incentive for many to take on additional work. The additional money will be welcome for many households. However, the taper rate reduction will be of … Read more
Government Response Summary
The government acknowledges the Committee's support for the reduction in the Universal Credit taper rate and comments on the cost of living, stating they are providing total support worth over £20 billion across this financial year and next.
HM Treasury
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18 Recommendation Acknowledged
Para 120
The Government should wherever possible announce major changes to the rates of existing taxes and...
Recommendation
The Government should wherever possible announce major changes to the rates of existing taxes and the introduction of new taxes at a Budget or other fiscal event such as a Spring Statement. This allows Parliament to consider the measures announced … Read more
Government Response Summary
The government notes the committee’s concern and states that it usually announces changes to the tax system at fiscal events, but the Health and Social Care Levy was developed and announced at speed.
HM Treasury
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19 Recommendation Rejected
Para 121
For both social care announcements, the House was asked to vote on new government policies...
Recommendation
For both social care announcements, the House was asked to vote on new government policies that came with significant distributional impacts for households, without the usual distributional analysis that would be provided alongside a Budget. That was highly unsatisfactory. For … Read more
Government Response Summary
The government states that distributional analysis is more appropriate alongside fiscal events rather than individual policy announcements, and that they did publish analysis that took account of the Health and Social Care Levy in October 2021.
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20 Conclusion Acknowledged
Para 135
We are deeply concerned that the rate of the National Living Wage was disclosed to...
Conclusion
We are deeply concerned that the rate of the National Living Wage was disclosed to ITV in an unauthorised fashion prior to the Budget, and we agree with the Treasury that this could have caused confusion in the market as … Read more
Government Response Summary
The government acknowledges the Committee's concern regarding the leak of the National Living Wage announcement and states it will conduct a review of handling arrangements ahead of future announcements.
HM Treasury
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21 Conclusion Acknowledged
Para 136
The rate at which the National Living Wage is set will clearly affect some companies...
Conclusion
The rate at which the National Living Wage is set will clearly affect some companies and sectors which have large numbers of staff at the minimum wage more than it affects others who do not. Some of those firms will … Read more
Government Response Summary
The government notes the Committee's concern regarding the announcement of the National Living Wage and will conduct a review of handling arrangements ahead of future announcements.
HM Treasury
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22 Conclusion Acknowledged
Para 137
The Committee acknowledges that certain Budget measures might be released prior to the Budget, in...
Conclusion
The Committee acknowledges that certain Budget measures might be released prior to the Budget, in line with the Treasury’s “Macpherson principles”. However, under no circumstances should market sensitive policies be able to enter the public domain in a disorderly fashion. Read more
Government Response Summary
The government acknowledges the Committee's concern regarding the leak of the National Living Wage announcement and states it will conduct a review of handling arrangements ahead of future announcements.
HM Treasury
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23 Recommendation Acknowledged
The Permanent Secretary to the Treasury has written to us stating the Government will review...
Recommendation
The Permanent Secretary to the Treasury has written to us stating the Government will review the arrangements for such policies ahead of future announcements. Given the potential opportunity for disruption that this unauthorised leak could have caused, the Government should … Read more
Government Response Summary
The government acknowledges the Committee's concern regarding the leak of the National Living Wage announcement and states it will conduct a review of handling arrangements ahead of future announcements.
HM Treasury
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