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Contingencies Fund Bill

Volume 802: debated on Wednesday 25 March 2020

Second Reading (and remaining stages)

Moved by

My Lords, I bring this Bill to the House to ensure that the Government can continue to take the necessary steps to mitigate and limit the effects of the Covid-19 pandemic in the United Kingdom. The Government have already taken a series of extraordinary steps, making it clear that they will do whatever it takes to support public services, businesses, jobs and fellow citizens.

The Bill is simply about cash flow. Parliament provides authority to the Government to spend resources, capital and cash through the supply estimates process. The supply and appropriation Bill usually receives Royal Assent in July, allowing departments to access the cash to carry out their functions. Until that point, departments’ cash is provided by the vote on account, which is also voted through Parliament. This gives departments roughly 45% of their previous year’s allocation to carry them through until the voting of the supply and appropriation Bill in July.

It has become clear that this is not a usual year, and the cash included in the vote on account simply does not include the necessary cash for certain departments. Additional departmental spending is needed and it is clear that we must act now. Parliament has already recognised that in certain circumstances the Government need to act ahead of the usual process. That is why Parliament has historically approved the Government having access to a contingencies fund. This is currently limited to 2% of the previous year’s cash spend. For 2021, this amounts to £10.6 billion. This would usually be adequate, but in these extraordinary times, through this Bill, the Government are asking Parliament temporarily to raise the limit to 50% of last year’s cash spend.

It is worth being absolutely clear: the normal supply estimates procedures will still go ahead in the usual way, allowing full repayment of any advances that were required. This is an essential Bill to maintain cash flow in an extraordinary moment in the history of the United Kingdom. The Bill is only a short one, but it is vital in allowing the Treasury to provide cash advances to enable the delivery of the range of measures and support announced by the Chancellor of the Exchequer. It ensures that the Government can continue to take the steps necessary to fight the threat of Covid-19. I beg to move.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

Sitting suspended.