BBC Question Time, factchecked
Northern Ireland and the Barnett formula
“If the DUP gets this hard-headed negotiated, 2.5 billion, 2 billion, 2.5 billion that they are asking for, the Barnett Formula says that the other devolved powers are going to have to have their share, too. That's about 3 billion for Wales, about 8 or 9 billion for Scotland.”
Gina Miller, 22 June 2017
It’s not clear how any deal which results in new funding for projects in Northern Ireland will affect the rest of the UK.
The Barnett formula aims to make changes to funding for services in England have the same pound-per-person effect on the money which goes to Scotland, Wales and Northern Ireland for those services.
It’s not set out in law, and in practice the Treasury decides how to apply it. It can also be bypassed if the Treasury decides certain spending is outside the formula. If the devolved governments disagree they can argue the case.
The formula itself is basically: any change to UK government department budget multiplied by the percentage of devolved services in that area multiplied by the percentage population in that country.
So, if the Barnett formula is used the result would depend on which departments are affected. It only applies changes in the fixed budget of a department to the ‘block grant’ paid to the devolved governments. It doesn’t decide all funding.
How any additional funding for Northern Ireland might affect the rest of the UK will be decided by political negotiation.
Fire safety regulations: no change in 20 years?
“The building regulations have not been changed for 20 years by successive Governments.”
BBC Question Time audience member, 22 June 2017
It’s unclear what the audience member means to refer to here.
All newly constructed or refurbished buildings must comply with the 2010 building regulations. These replaced older regulations from 2000, which had been amended a number of times. The government at the time said the 2010 regulations involved few substantial changes.
The fire safety guidance under these regulations is a separate publication—Document B—which was most recently updated with amendments from 2013, and has been updated several times in the past decade.
The government planned to update this document last year, in response to recommendations made to it following a fire at Lakanal House in London in 2009, in which six people died. It hasn’t been revised yet.
We’ve written about this in more detail here.
The UK public debt is rising
“The Tories have not balanced the books, because our debt has gone from £1 trillion to £1.7 trillion”.
Gina Miller, 22 June 2017
That’s right. The government still runs a deficit, spending more than its income. As a result, government debt continues to go up.
Government debt was £1 trillion in 2009/10, and was just above £1.7 trillion in 2016/17. Forecasts suggest it will be over 1.8 trillion this year.
The government set targets to do with eliminating the deficit in 2010 (which it didn’t meet) and in 2015 (which it abandoned after the EU referendum).
The deficit has fallen by nearly three quarters between 2009/10 and 2016/17, when compared to the size of the economy.
Corporation tax: rates down, receipts up
“And the corporation tax yield has gone shooting up since the Government reduced the rates of corporation tax”
David Lidington, 22 June 2017
Corporation tax receipts have been increasing and the main rate has been falling in the last few years. But receipts could well have been higher if the rates hadn’t been cut.
As we’ve pointed out before, successive policy costings from the Office for Budget Responsibility since 2010 have suggested that the government would have collected more in tax if it hadn’t lowered the rates. According to the Institute for Fiscal Studies: “Cuts to corporation tax rates announced between 2010 and 2016 are estimated to reduce revenues by at least £16.5 billion a year in the short to medium run.”
These are the best figures we have, but they’re also far from certain. Receipts depend on how big profits are, and these are hard to estimate. Cutting rates can also be beneficial to economic growth in the longer term, which in turn can mean bigger future receipts than would otherwise have happened.
So why have receipts been going up in spite of rates going down? The IFS points to several factors. Profits have been growing, so there’s been more to tax. Policy measures have also led to increased income, for example through changes to reduce tax avoidance.
The most recent “shooting up” of tax receipts last year was due in particular to the growth in companies’ profits and the introduction of a Bank Surcharge, according to HM Revenue and Customs.