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Marked PC: Chancellor on Finance Bill 2016
#1
Good morning/afternoon/evening and thank you all for coming to this press conference. It's no secret that the Government's budget has been introduced in Parliament and is currently under debate and I am sure you all have questions. I'll make a brief statement and then open up the floor.

This budget is all about providing a strong and solid foundation for future economic growth and for ensuring that we can spread the benefits of the economic recovery to as many Britons as we can. We're on track to still meet the 2015 Spending Review's plan to eliminate our annual need to borrow by 2019 and start paying down our outstanding debt after that date which shows that businesses, investors, and working Britons all can have confidence that this Government fully intends to keep to its larger promise of fiscal responsibility and inspire confidence in the choices that this Government is making.

In terms of spreading the benefits, we're providing a meaningful tax burden reduction worth more than £250 annually to each taxpayer by raising thresholds at which the income tax kicks in; in the aggregate, this is going to mean £5 billion nationally available to expand consumption and economic growth. And we're also honouring our Triple Lock commitment on pensions, meaning that 11.5 million Britons are going to see a real increase in their pension benefits- again putting money into the hands of those best equipped to spend it: the people.

For those that work for the UK: our police, our NHS staff, our teachers, our civil servants, and our military, we are providing a wage increase in real terms that will outpace inflation and the cost of living. The Prime Minister has already pointed out what this, coupled with our tax changes, means: in every case, it's hundreds of pounds in more take-home pay than any of these public servants earned last year.

We're investing more in workers and families: we're strengthening funding to adult skills and further education to ensure these pounds are protected from the cuts of the 2015 Spending Review. Even as the UK has built more houses in any year since the the financial crisis began in 2008, we're expanding the funding with nearly £1 billion for new affordable home starts, ensuring that we can get to the level we need to be. We're also doubling our funding for homelessness and rough sleeping programs to bring everyone in from the cold- or the warmth as it may be. We're expanding payments for maternity and for guardianship, expanding investments in secondary education in particularly though hiring teachers. For the youngest among us, we're expanding vouchers to help pay down the cost of childcare and boosting free childcare funding by more than 6%- higher than inflation and population growth- to ensure we see better outcomes starting at the earliest age. 

We're making near-billion-pound investments in the NHS, helping to hire 2,000 new doctors and 5,000 new nurses and support staff before the end of 2016- beyond the hirings planned for in the 2015 Spending Review- to help better provide services to those who need it most. And our expansion of NHS infrastructure funding will allow us to tread down new paths towards reducing wait times such as through triage centers and expand quality of care that we're providing. We're making NHS trusts charitable for rates purposes, dramatically decreasing the levels of tax that they're subject to and ensuring that more funding is available to these organizations to provide care in their immediate areas; to balance this out we've increased funding to local governments to make up for the tax decrease. 

At the same time we're working to use our powers and authorities to provide better health outcomes in other ways. We've adopted a sugary drinks tax on sodas, energy and sports drinks, and a limited subset of juices very high in sugars that will not only fund our NHS expansions but also help individuals understand the costs of their choices. 

We're also investing in economic growth: with £50 million for HS3 and with £500 million for tidal energy in the North and in Scotland we'll be creating jobs and focusing our view on the needs of the North of England and of Scotland through our investments. 

I know you all have heard about the UK taking a leadership role in defending human rights, particularly in Syria, and about how this Government is committed to fighting against terror. We recognize that this costs money- so while we continue to honour our commitment to spend 0.7% of GNI on foreign aid, we're protecting the size of our armed forces from cuts- reversing the draw-downs in the 2015 Spending Review - and making sure that these brave men and women have the tools they need- through a £350 million expansion to military hardware purchasing- to seek out and to bring justice to those that are committing terror, that are gassing their own people, or that are otherwise destabilizing a world we've worked hard to make peaceful. 

All of this adds up to a budget designed to have a positive impact on every Briton, and I think that is something that we have achieved. The CBI certainly thinks so, and we're seeing economic confidence rising in the country. The country is with us: we're building that foundation for future growth, ensuring we can continue to put Britons to work and that everyone has the opportunity to benefit.

But now I leave it to you all- and I'm happy to answer any questions you have. Who's first?
Lincoln "Link" Pritchett MP
Chancellor of the Exchequer
Beckenham | Conservative Party
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#2
The Guardian: what about the real and growing crisis in social care? Are we going to have to wait until the next budget?

Financial Times: you are going to need to make billions more cuts over the next few years to stick to your plans. Where are they going to fall?

Economist: if the UK votes to leave the EU, do you expect to have to cut spending even further to deal with any fiscal consequences?
Steve
Acting Acting Head Av | Parliament | Prime Minister's Office | Cabinet Office | Treasury
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Thanks given by: Link Pritchett (CON)
#3
Quote:The Guardian: what about the real and growing crisis in social care? Are we going to have to wait until the next budget?

This Government takes the social care issues very seriously, and we're looking to do more than just providing funding through the normal budgeting process to address this. We are committed to a fundamental reform to ensure that the social care system in this country not only provides to those that are truly in need but that also is sustainable and that includes a measure of individual responsibility over care. 

We recognize completely there is a problem- and it's not one that more money alone will fix. This Government is developing plans now that we hope to be able to outline in more detail in the near future. But this Government is not deaf when it comes to the needs of those who need and require access to social care. 

Quote:Financial Times: you are going to need to make billions more cuts over the next few years to stick to your plans. Where are they going to fall?

A lot of what we need to do will be largely dependent on the impact that this budget has on our economy. So long as we continue to see robust and consistent economic growth as we have, I don't think that the cuts are going to be dangerously large in real terms. Even if we stick straight to the 2015 Spending Review, we will continue to invest greater amounts in health, in social security, in transport, in support to Wales, Scotland, and Northern Ireland on an annual basis than we do at present. 

At the same time, I think it's clear that this Government does not see the 2015 Spending Review as some sort of holy writ that must be followed under penalty of death. We recognize that there need to be investments in critical areas- just as we recognize there need to be fundamental changes to our economy. And I don't think there's anything that we're afraid of looking at, afraid of costing out, afraid of trying in order to support our commitment to the people of the UK that we presented in the last election. It's a bit premature to say that yes indeed we will eliminate programme X or that we will eliminate billions of pounds from department Y. All of this will need to be looked at. But I can say that right now, the Government remains committed to our goal of eliminating borrowing come 2019. 


Quote:Economist: if the UK votes to leave the EU, do you expect to have to cut spending even further to deal with any fiscal consequences?

In terms of the true financial impact of a Leave vote, we will certainly need to re-examine our priorities and how we respond to them through future budgets. There are a lot of factors at play: while the UK would benefit from no longer being required to make a financial contribution to the EU, the potential changes to our economy, to economic uncertainty, and to investment in the UK could very well eliminate the benefit and drive us into further negative territories. I've no doubt that we'll see fuller econometric analyses of the relative strengths of each of these factors in the coming weeks and months. 

While it is not my position nor the Government's to endorse a certain position, from my own personal perspective I think that the potential losses outweigh the gains to not having to provide the EU with funding on an annual basis. And so if our goal in the event of a Leave vote is to continue towards a balanced budget as was laid forward in the 2015 Spending Review, we'll either need to find new sources of revenue- or yes, continue to make cuts.
Lincoln "Link" Pritchett MP
Chancellor of the Exchequer
Beckenham | Conservative Party
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#4
The Times

This Budget sticks rigidly to the Osborne plan for deficit reduction at a time when the economy is growing slightly faster and their is looming uncertainty vis a vis the Brexit, in short this was the perfect time to build in some flexibility for later where we may not be able to cut the deficit as much for fear of adversely affecting the economy. Why have the Government decided not to take this approach?

The Telegraph

This Budget goes against the grain for conservative thought and raises Inheritance Tax instead of lowering it, why have you abandoned your base in such a drastic way?

The Independent

No cuts to Stamp Duty, a pittance for new affordable housing, and a real terms freeze in funding for rental and social housing repairs and maintenance. Why is this Government so indifferent to young people's needs and concerns when it comes to the Housing Market and the broader Budget?
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#5
Quote:The Times

This Budget sticks rigidly to the Osborne plan for deficit reduction at a time when the economy is growing slightly faster and their is looming uncertainty vis a vis the Brexit, in short this was the perfect time to build in some flexibility for later where we may not be able to cut the deficit as much for fear of adversely affecting the economy. Why have the Government decided not to take this approach?


The reason that we wanted to stick to the goal of deficit elimination by 2019 is precisely because we don't know what the future holds. Our economy is growing, absolutely, and we're adding jobs. By all measures things are set to continue down the path towards improvement. But economics tells us that this time, right now, is when you want to cut back on expenses and increase what you try to save because you can afford to. Say we do have some sort of crisis in the near future- whether it's caused by Brexit or any one of a number of other causes. The Government is going to need to borrow in order to prevent disastrous cuts to services that we provide. The more we cut now, the easier and cheaper it will be to borrow in the future. The more we raise revenues and reduce our deficit and overall debt position now, the more able we will be to intervene in the market to prop up our national economy. 

The example that we're trying to avoid- and Osborne himself pointed this out in the 2015 Spending Review- is to be like Greece. If we keep borrowing and borrowing now, we're going to find it impossible to borrow when we actually need to. If we don't enact fiscally responsible measures now when we can afford to do so, our only option will be to have to cut back when times are bad or when we're in the crisis. This is the idea behind the 2015 Spending Review, and it's something that this Government is also aware of now.  


Quote:The Telegraph

This Budget goes against the grain for conservative thought and raises Inheritance Tax instead of lowering it, why have you abandoned your base in such a drastic way?

I don't know that I'd call this drastic. The Conservatives put forward a proposal to raise the inheritance tax thresholds to allow for families to pass housing on to their descendants without incurring the rigorous bite of the inheritance tax, and it is one that we have to accept will cost us money depending on how it's implemented. The Government's idea here was not to abandon our base or to otherwise vilify anyone, but rather to accept that there are fiscal costs to various proposals. Raising the rate now will allow us to move forward with original plans to raise the inheritance tax threshold and provide targeted relief without making our budget situation any more dire. 


Quote:The Independent

No cuts to Stamp Duty, a pittance for new affordable housing, and a real terms freeze in funding for rental and social housing repairs and maintenance. Why is this Government so indifferent to young people's needs and concerns when it comes to the Housing Market and the broader Budget?

This Government definitely takes the needs and concerns of young people seriously. Looking at housing more narrowly, this Government is on the verge of eliminate tenancy fees and placing a cap on deposits to make it so that available housing is easier for people- particularly young people- to afford. Looking more broadly, though, as you note, this budget is very important for young people. The unemployment rate for young people in this country is just under 15%, which is nearly three times as high as the unemployment rate nationally. It's harder right now for younger people to find jobs- the kind of jobs that help ensure access to housing as well as to the benefits that our economy can bring. And that's why it is this Government's goal to ensure that our budget is one in which that rate can go down. That our budget is one where investors and businesses can feel confident in the direction of our economy that they will open up hiring- and helping to bring jobs to hundreds of thousands of young people who are out of school and who are looking opportunities to make their own. 

When businesses and investors have confidence, every one wins. Every one can end up reaping the benefits of more jobs and of better paying jobs. That's what we're working for- and when we get that, a lot of the problems will start to disappear. Young people will be in less debt. They'll have a stronger source of income off which to live. Of course there is more to do on housing, and this Government doesn't see this particular budget as the end all and be all. But we what do see is a foundation, buoyed by our smart investments in energy, in construction, and in job-promoting programs that will really bring a better future for Britain's youth than they could have expected just six years ago.
Lincoln "Link" Pritchett MP
Chancellor of the Exchequer
Beckenham | Conservative Party
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#6
Conservatives: +7

The opening spiel was very good, it laid out your accomplishments and spoke very plainly about the bits you wanted to talk about, and then the questions happened. Now Steve is not an easy man to go up against in questions and some of your answers were a touch weak, especially on Social Care. Everyone and their mother knows that Social Care needs money and reform, if you want to change that you need to spin it consistently. You subtly sidestep the question about tomorrow's cuts and you manage to avoid the Osborne punishment budget trap Steve laid for you which was good. Then we entered my questions where the Times asked you about making more cuts now to be flexible, I guess you misunderstood that one or spun it for some reason because you didn't deal with the issue the question raised leaving a very unhappy Times journalist, but the stuff you say is the standard Tory line which has worked well up to now. You had a good answer about Inheritance Tax which satisfies everyone, particularly the upper middle class who will presumably be lifted out of the tax by the threshold rise. Finally the question on young people was a bit tepid in your response, you get caught up in problems and spin lines without actually doing too much addressing the issues young people face, indeed you barely mentioned any mitigating action until the end of the answer. All in all a decent Press Conference where the opening spiel helped to raise you up where some answers may have let you down just a touch.
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