The Government has committed to providing National Health Service staff with a pay uplift in 2021/22, in order to recognise the unique impact of the pandemic. The level of pay award has not yet been set and we are looking to the independent pay review bodies for a recommendation.

We have submitted our written evidence to the review bodies, which sets out what is currently affordable and also provides information on recruitment and retention in the NHS. In reaching their recommendations the review bodies will consider evidence from a range of parties, including NHS unions. They will also consider factors such as the economic context including inflation, recruitment and retention, affordability and value for the taxpayer. We have asked the review bodies to report in the spring and will carefully consider their recommendations when we receive them.

No decision has been made on changes to dental patient charges for the 2021/22 financial year.

The Chancellor has regular discussions on macroeconomic policy with European and G7 counterparts. They all recognise the significant challenges ahead of us in the months to come. The G7 has an important role to play in steering the global economy, and as Chair of the G7 Finance Track, the Chancellor has discussed with colleagues how best to shape and respond to the phases of the global recovery from Covid-19. This includes the short- and medium-term economic challenges relating to both fiscal and monetary policy. The Chancellor will continue to work with colleagues over the coming months to learn from each other’s policy interventions, to recognise and manage spillover effects, and to support continued coordination on policy responses.

As highlighted in the Budget, while borrowing costs are affordable now, interest rates and inflation may not stay low forever. A sustained 1 percentage point increase in both interest rates and inflation would increase debt interest spending by £27.8bn in 2025-26.

It is important to take action as the economy durably recovers to limit the UK’s exposure to this risk and to build fiscal resilience. The Office for Budget Responsibility’s March 2021 forecast shows that the medium-term outlook for the public finances has returned to a more sustainable path, supported by the fiscal repair measures set out in the recent Budget.

Treasury Ministers have regular discussions with counterparts in the devolved administrations on matters of mutual interest.

The Chancellor has regular discussions on macroeconomic policy with European and G7 counterparts. They all recognise the significant challenges ahead of us in the months to come. The G7 has an important role to play in steering the global economy, and as Chair of the G7 Finance Track, the Chancellor has discussed with colleagues how best to shape and respond to the phases of the global recovery from Covid-19. This includes the short- and medium-term economic challenges relating to both fiscal and monetary policy. The Chancellor will continue to work with colleagues over the coming months to learn from each other’s policy interventions, to recognise and manage spillover effects, and to support continued coordination on policy responses.

As highlighted in the Budget, while borrowing costs are affordable now, interest rates and inflation may not stay low forever. A sustained 1 percentage point increase in both interest rates and inflation would increase debt interest spending by £27.8bn in 2025-26.

It is important to take action as the economy durably recovers to limit the UK’s exposure to this risk and to build fiscal resilience. The Office for Budget Responsibility’s March 2021 forecast shows that the medium-term outlook for the public finances has returned to a more sustainable path, supported by the fiscal repair measures set out in the recent Budget.

Treasury Ministers have regular discussions with counterparts in the devolved administrations on matters of mutual interest.

The Chancellor has regular discussions on macroeconomic policy with European and G7 counterparts. They all recognise the significant challenges ahead of us in the months to come. The G7 has an important role to play in steering the global economy, and as Chair of the G7 Finance Track, the Chancellor has discussed with colleagues how best to shape and respond to the phases of the global recovery from Covid-19. This includes the short- and medium-term economic challenges relating to both fiscal and monetary policy. The Chancellor will continue to work with colleagues over the coming months to learn from each other’s policy interventions, to recognise and manage spillover effects, and to support continued coordination on policy responses.

As highlighted in the Budget, while borrowing costs are affordable now, interest rates and inflation may not stay low forever. A sustained 1 percentage point increase in both interest rates and inflation would increase debt interest spending by £27.8bn in 2025-26.

It is important to take action as the economy durably recovers to limit the UK’s exposure to this risk and to build fiscal resilience. The Office for Budget Responsibility’s March 2021 forecast shows that the medium-term outlook for the public finances has returned to a more sustainable path, supported by the fiscal repair measures set out in the recent Budget.

Treasury Ministers have regular discussions with counterparts in the devolved administrations on matters of mutual interest.

As set out at Budget 2021, the government has maintained the Budget 2020 assumption of 2.1% real terms increases per year for core resource DEL spending after 2021-22, reflecting the latest OBR deflators. For capital DEL spending, the government has maintained the Budget 2020 assumption consistent with delivering over £600 billion in gross public sector investment over the next five years, the highest sustained levels of public sector net investment (PSNI) as a proportion of GDP since the late 1970s.

Specific allocations beyond 2021-22 are a matter for the Spending Review later this year, where the government will set future departmental resource DEL and capital DEL budgets as well as devolved administrations’ block grants. However, the government has already committed to a historic long-term settlement for the NHS with a cash increase of £33.9 billion a year by 2023-24. Further details on the Spending Review will be set out in due course.

In November 2020 my right hon. Friend the Chancellor of the Exchequer set out, as part of the 2020 Spending Review, the rationale behind a public sector pay pause this year. As outlined in the Secretary of State for Defence's recent letter to the Chair of the Armed Forces' Pay Review Body, covering Pay Round 2021/22, and as detailed in HM Treasury's earlier Economic Evidence to the Pay Review Bodies 2020/21, the pay pause recognises that public sector pay has been shielded from the pandemic's economic effects. It also serves to protect public sector jobs at this time of crisis whilst ensuring fairness between the public and private sectors. As such, no consideration has been given to the effect of a pay pause on average median pay; the household income of Service personnel; or a comparison with projected rates of inflation.

The means test threshold is reviewed on an annual basis. The next review is due in January 2022.

The remit of the MPC is set by the Chancellor and is reaffirmed yearly through a letter to the Governor of the Bank of England. It was updated at Spring Budget 2021. The remit re-confirms the inflation target for the MPC as 2 per cent as measured by the 12-month increase in the Consumer Prices Index (CPI). This reflects the primacy of price stability and the forward-looking inflation target in the monetary policy framework. The Government’s commitment to price stability remains absolute.

The MPC’s remit already provides flexibility around the inflation target, allowing inflation to deviate temporarily in circumstances where attempts to hit the target may cause undesirable volatility in output or exacerbate financial stability risks.

My Lords, as a party treasurer, I know that in 2000 the cost of a second-class stamp was 19p and it is now 66p. Therefore, does the Minister agree that the rules need to reflect reality? Given that all parties were fined after the 2015 election, there is clearly a need to simplify the rules. Perhaps he might point out to the Liberal Democrats that election spending is not necessarily the only issue: late filing of accounts six months after the 2019 election was also reprehensible.

My Lords, I certainly agree that any consideration of electoral law and, indeed, electoral practice needs to reflect on the position of smaller parties. The Government have been considering that specifically in relation to the May elections.

My Lords, as we come out of the Covid-19 pandemic, it is important for all political parties to look to new priorities for recovery and for meeting the new imperatives of sustainable development. Does the Minister agree that any increase in political funding limits should not unduly disadvantage smaller parties committed to new and necessary forward thinking?

My Lords, we think it important to engage with the political parties, and we do so. Obviously, the reporting of donations has to be and is transparent; I strongly agree with the noble Lord on that. That is the situation that obtains presently. So far as his broader question is concerned, I reiterate that cross-party discussion of these matters is important and we appreciate the input of the Labour Party on them.

My Lords, have the Government considered introducing a mechanism to allow for the uprating of local and national spending

limits for elections and donation-reporting thresholds at arm’s length from Ministers, which would provide protection for the Government and reassurance to others?

My Lords, in our judgment, it cannot be right that the limits for parliamentary by-elections have not been updated in more than 20 years. By updating for inflation, as is currently under consideration, the limits would remain in line with the original intent of Parliament in 2000 when they were introduced.

My Lords, why is £12,000 per constituency with an average of 70,000 electors not sufficient? Why is more money needed? What is it going to be spent on—or is it just that inflation has reached such levels under this Conservative Government that money is absolutely essential?

My Lords, the noble Lord touches on an important point in relation to digital campaigning. We have said that we will introduce a digital imprints regime and we published a consultation on the proposed regime in August 2020 that closed in November. We are taking forward a programme of work on electoral integrity that will ensure that it is fit for the modern age. It will address some of the issues to which he referred.